From the desk of Steven Strazza @Sstrazza
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 the price behavior 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?
In our view, the most prominent theme taking place in markets recently is the overwhelming number of risk assets that are currently at… or near our targets or other logical levels of supply.
This week’s chart does a great job of illustrating just that:
We have a major basing pattern that resolved to the upside, followed by a swift move to our target at the first Fibonacci extension of its prior range.
Once the objective was achieved, momentum has been waning as sellers continue to reject prices at this critical level of resistance.
So this week our question is simple:
Do we want to bet on these kinds of patterns breaking higher, or rolling over?
Or is it still too soon to tell?
Let us know what you are doing!
And as always, check back later in the week to find out why this chart is relevant.