Mystery Chart (06-03-2020)

Steve Strazza
June 3, 2020

From the desk of Steve Strazza @Sstrazza

New Mystery Chart!

For those new to the exercise, we take a chart of interest and remove the x/y-axes and any other labels that would help identify it. The chart can be any security in any asset class on any timeframe on an absolute or relative basis. Maybe it’s a custom index or inverted, who knows!

We do all this to put aside the biases we have associated with this specific security/the market and come to a conclusion based solely on price.

You can guess what it is if you must, but the real value comes from sharing what you would do right now. Buy, Sell, or Do Nothing?

Here’s this week’s chart.

We're looking at a long-term downtrend that just resolved higher from a short-term continuation pattern and is now trading back above key prior lows.

Click on chart to enlarge view.

JC just wrote a post about how consolidations are resolving higher all over the place right now. We can definitely add this chart to his list.

When a bearish continuation pattern resolves higher, instead of lower - with the direction of the underlying trend, we really want to pay attention as the market is sending us a strong bullish message.

Not only did price just break higher from a bearish continuation pattern, but it did so from fresh all-time lows. The resulting bear trap turned into a powerful 40% rally off the low of the failed move.

Price has reclaimed its prior lows and momentum has transitioned back into a bullish regime, confirming the recent strength.

So, are you buying this move, fading it, or waiting to see how the recent gains digest themself?

We want to hear from you. Let us know what you think!

Tweet me your thoughts @Sstrazza or email me at Strazza@Allstarcharts.com and check back on Thursday to find out why this chart is relevant.

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Allstarcharts Team

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