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?
We hope this week’s Mystery Chart is more challenging than prior weeks. Why? Because it’s a complete and total hot mess. Let’s have a look.
Click on chart to enlarge view.
Just when it looked like we were in the clear and had made a sustainable move above prior highs, price plunged lower and violated key lows. At that point, it certainly appeared as if the primary trend was transitioning from bullish to bearish… but before long, we whipsawed higher and trapped short-sellers, resulting in a swift squeeze higher.
Price reacted strongly off the lows, breaking back above the prior range. Although, the breakout was not sustained as prices quickly retraced back beneath their key prior highs.
So, the question that remains is simple…
Do we remain rangebound and chop between these former highs and lows?
Or do buyers have enough left in the tank to reclaim the upper bounds of the current range?
Check back at the end of the week to find out what we think and why this chart is relevant. For now, we want to know what you’d be doing here.
Tweet me your thoughts @Sstrazza or email me at Strazza@Allstarcharts.com.
In the meantime, check out this FREE preview of our new Charting School course to learn more about some of the Technical Analysis concepts we discuss in our posts.