From the desk of Steven Strazza @Sstrazza and Grant Hawkridge @granthawkridge
Check out our latest Mystery Chart!
What we do here is take a chart that’s captured our attention, and remove the x and y-axes as well as any other labels that could help identify it.
This chart can be of any security, in any asset class, on any timeframe. Sometimes it’s an absolute price chart, other times it’s on a relative basis.
It might be a ratio, a custom index, or maybe the price is inverted. It could be all three!
The point is, when we aren’t able to recognize what’s in front of us, we put aside any biases we may have and scrutinize it objectively.
While you can try to guess the chart, the point is to make a decision…
So let us know what it is… Buy, Sell, or Do Nothing?
Here’s this week’s chart!
Buyers and sellers have really been battling this one out at the recent lows. Seeing such frequent tests of this key support level within the context of a primary downtrend is by no means bullish price action.
The same is true over the long run as we can see this ugly downtrend illustrated by the lower highs and lower lows moving from left to right on the chart.
So, do we want to make the bet that sellers win out and finally violate this current level of support, pushing price to new lows?
Or do we want to make the bet that there is enough demand at this level for price to rebound upwards?
We can always wait and do nothing until we have more data.
The point of this exercise is to see what you are doing. So what’s it going to be?
Are you buying, selling, or waiting for more information?
And as always, be sure to check back later in the week to find out why this chart is relevant.