ZF1! - Inside bar formed & looking for a false break-out

23 Mei 2018

Price continues to consolidate with the 5 year notes. On the daily chart we can see a large mother bar with 2 child bars. We are currently watching a 3rd bar form which looks like it may want to break out to the upside. If this happens it may be setting up for a very bearish pattern called an inside bar fake-out or false break-out. That is when you have an inside bar pattern form and finally breakout one direction only to have the market immediately pull back into the inside bar. This fakes a lot of traders to trade with the break out and the pullback then traps and squeezes them. Price then breaks out the other direction and the squeeze helps accelerate and feed the move. In a strong bearish trending market I am only looking for opportunities to get short. If price breaks out to the upside I will be watching for a pullback and for the inside bar false break-out pattern on the daily chart.