The market only moves from narrow to wide states and repeats. Currently, the market is in state 4 out of the 5 states.
State 1: Narrow state before the move higher ( Narrow )
State 2: The trending move higher ( Trending )
State 3: The expanded move away from the mean ( Wide )
State 4: The reversion back down to the mean ( Trending )
State 5: The narrow state again prepping for the next move higher ( Narrow )
The past 6 times the market has been in its pullback state 4 phase, the hourly 21ema has been at a 34-53 degree angle declining
The hourly chart is in positive position due to it being above the 200sma and trending bullish
State 1: Narrow state before the move higher ( Narrow )
State 2: The trending move higher ( Trending )
State 3: The expanded move away from the mean ( Wide )
State 4: The reversion back down to the mean ( Trending )
State 5: The narrow state again prepping for the next move higher ( Narrow )
The past 6 times the market has been in its pullback state 4 phase, the hourly 21ema has been at a 34-53 degree angle declining
The hourly chart is in positive position due to it being above the 200sma and trending bullish
Note
The 5 minute 200sma is one and the same as the hourly 21ema. They are both declining meaning short term bearishness. It is looking for support for another bounce higher.Note
Will it reject at the 200sma or will it pop above it first before falling again?I don't know where the low will be at and I quite frankly don't care. I will trade in the direction of the 5 minute 21ema day by day.
I will be looking for possible shorts in the short term
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.