From the desk of Steve Strazza @sstrazza and Louis Sykes @haumicharts
New Mystery Chart!
For those new to this 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.
As you can see, sellers have steadily pushed prices lower for some time now.
After moving sideways, we’re now back to the recent lows. As we like to say – the more times a level is tested, the higher the likelihood it breaks… Will this time be any different, or have sellers lost the control to push prices lower?
Momentum tells a similar story. Even on sharp upward rallies, RSI has continually failed to get into overbought conditions, solidifying the bearish regime.
With that said… it’s also managed to stay out of oversold territory on almost all of the recent tests of support.
So, is this consolidation likely to resolve lower in favor of the underlying trend?
Or are you seeing this differently?
Let us know your thoughts!