harmonics vs traditional TA
Diupdate
In my prior post I drew my shark pattern wrong... what you see here in bright green is the legit shark pattern which has materialized beautifully so far w/ a perfect AB=CD 50% retracement as predicted. Again, SPY keeps painting textbook fib levels on these harmonic patterns.
Now we see whether this rejects into a 5-0 pattern and heads back down to retest channel support. I'm inclined to believe this is the case as there haven't been many buyers above 280 last week or today and the algos have sold the rips above this level each time... I dunno maybe if they change the headlines to "trade deal REALLY REALLY REALLY close" they'll get more interest?
In the event that we DO retest channel support:
1) We bounce off the channel and head higher to test 281 for the third time. Depending on how high we got at the open it'll encounter a PRZ from either a bearish gartley or bat right at resistance. BORING, dip buyers still alive and well and we consolidate in an ascending triangle... booo.
2) The more interesting case is if we fall through channel support. As you can see there is a confluence of the 21DEMA (which I use primarily to dictate trend), the neckline from a potential H&S, and support at 276.35. Right beneath that we've got the 200DMA as well as gap fill support from 275. Traditional TA would suggest we find support and bounce somewhere in this area. But given the existing price structure, I can't find a single bullish harmonic pattern that gives me a PRZ remotely close to this price range.
There are however several different bullish harmonic patterns that can potentially terminate in the 272-273 range. I show a potential bullish deep crab here in light green.
So which school of thought will win out here? I'm leaning harmonics here mostly due to how tightly SPY has traded on fib levels so far for the past week... investors may also see the failure of the channel to act as support as a sign that the rally is over and selling momentum accelerates.
Anyhow this is all moot if the bears can't break this 2 month old channel. And only when the 21DEMA starts to rollover can bears have any possibility of an extended multiday pullback. Until then any dreams of a -2% face-ripping selloff day will remain just that.
Now we see whether this rejects into a 5-0 pattern and heads back down to retest channel support. I'm inclined to believe this is the case as there haven't been many buyers above 280 last week or today and the algos have sold the rips above this level each time... I dunno maybe if they change the headlines to "trade deal REALLY REALLY REALLY close" they'll get more interest?
In the event that we DO retest channel support:
1) We bounce off the channel and head higher to test 281 for the third time. Depending on how high we got at the open it'll encounter a PRZ from either a bearish gartley or bat right at resistance. BORING, dip buyers still alive and well and we consolidate in an ascending triangle... booo.
2) The more interesting case is if we fall through channel support. As you can see there is a confluence of the 21DEMA (which I use primarily to dictate trend), the neckline from a potential H&S, and support at 276.35. Right beneath that we've got the 200DMA as well as gap fill support from 275. Traditional TA would suggest we find support and bounce somewhere in this area. But given the existing price structure, I can't find a single bullish harmonic pattern that gives me a PRZ remotely close to this price range.
There are however several different bullish harmonic patterns that can potentially terminate in the 272-273 range. I show a potential bullish deep crab here in light green.
So which school of thought will win out here? I'm leaning harmonics here mostly due to how tightly SPY has traded on fib levels so far for the past week... investors may also see the failure of the channel to act as support as a sign that the rally is over and selling momentum accelerates.
Anyhow this is all moot if the bears can't break this 2 month old channel. And only when the 21DEMA starts to rollover can bears have any possibility of an extended multiday pullback. Until then any dreams of a -2% face-ripping selloff day will remain just that.
Komentar
Looks like consolidation mode for now... My guess it pops and tries for the 61.8% retracement one more time today. Because you know the dip buyers aren't going away quietly. If shorts can survive today and stay under 280, they'll be rewarded in the next 2 days I think...Komentar
rejected out of PRZ once more... if you're interested in scalp here's a bullish bat intraday setup. Again, perfect fib levels here.
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