An Explanation of the Symmetrical Triangles and Price TargetsGME is currently in a pattern known as a symmetrical triangle in which, following a move (up or down), there is a battle between bears and bulls to establish dominance on the market. We'll focus on a symmetrical triangle that starts with a move up like GME , but the same applies to a move down, just vice versa. This is visualized on a chart as a move up followed by a series of lower highs and higher lows which form two converging trend lines that form a triangle shape. As far as market psychology goes, this represents a few things. You should know, three parties are usually considered in market psychology analysis of individual securities, but four parties are considered when there is an influx of people who were not previously involved in that market. I think in GME 's case we can say that there are four parties. Those parties can be identified as bulls, bears, undecided, and uninterested. The uninterested party becomes interested, and therefore accounted for in analysis, when there is a lot of attention surrounding a security. The move starts with a lot of volume (which is relative, but mostly can be based on the average volume over a long period) as a result of a shift or reversal in sentiment and newfound attention on that security. The bullish party increases their position as their bullish thesis is proven correct. The bearish party closes their positions (and may even reverse their position to bullish) once their bearish thesis has been proven wrong. The undecided party becomes decidedly bullish. And finally, the uninterested party becomes interested and bullish.
Following the move up, buyers and sellers are going back and forth increasing and decreasing their entry and exit points which creates a series of peaks and troughs. At the first peak, where the triangle starts, there has been bullish sentiment because bears realized they were wrong and the stock is getting attention because of the price increase, so all parties have turned bullish. GME is a tricky case because there probably would have been continued bullish sentiment if there wasn't interference with the market, but even though the price action has been interfered with, the chart still paints a picture of market psychology for us - whether it's unprecedented or not. At some point, the stock will hit the bulls price target and they will start selling their shares for profit (and possibly reversing their position to bearish, but this is less likely in a market that's trending up). At this point, bears take over and start shorting again, bulls become dormant until they see another price they like, undecided parties may stay undecided or move with the trend, and uninterested parties are again no longer interested or are also moving with the trend. This process continues in a series of a total of 5 peaks and troughs (combined) to form a wave (this ties into Elliot Wave principles, but I'm not well versed in that yet). Each peak will be lower and each trough will be higher as buyers and sellers compete for dominance. In other words, moves up should have decidedly more volume than moves down in a symmetrical triangle, because all parties have turned bullish where the opposite is not true for moves down. The overall volume from the beginning to the end of the triangle should also decrease. Symmetrical triangles are intermediate patterns which means they typically last 1 to 3 months. In the event that the patterns continues past 3 months, if the volume profile is still indicative of a continuation, the breakout will likely be more significant.
During this 1-3 month period, the breakout generally occurs between 2/3 and 3/4 of the overall length of the triangle starting from its beginning (the base) to the point where the trend lines converge (the apex). If there is no breakout by the time that 3/4 of the triangle has passed, the continuation pattern weakens and it becomes more likely that the sideways trading will continue. If there is a break out, it's generally on higher volume than the past 10 days and in what's known as a gap up, or an opening price one day that is much higher than the previous days closing price. There are a few types of gap ups, but we'll focus on breakaway gaps because that's what we're dealing with in this instance. A breakaway gap typically occurs when breaking through or out of a prominent support, resistance, or pattern. The breakaway gap indicates the start of a strong trending move, is typically a large gap, and the price tends to follow through in the gap direction over the next few weeks. In order to confirm a gap up, you want to see increased volume and you absolutely do not want to see that gap filled in the following days. We just had a gap up to break out of the symmetrical triangle in GME and we partially filled it, but have not filled it all the way. If the gap is filled it usually indicates prices will go lower. Now that we've broken out of the triangle, the upper resistance line will likely become a prominent support line. So if the breakaway gap is filled we can expect a bounce somewhere around $195. If it's not filled, we can expect to continue moving higher to the price targets set by the symmetrical triangle. There are a few way to set price targets, but two methods are most common. The first is to measure the height of the base of the triangle. Use that same height going up from the breakout point to determine a price target to be met by the apex of the triangle. The second method is to draw a line parallel to the triangle's support line. Your price target will be where that line ends at the apex of the triangle.
The end of the symmetrical triangle is on 11 June and my two price targets are $588.87 and $634.24. I'll post the chart now so you can see that this is a nearly perfect symmetrical triangle continuation pattern that follows every single one of those parameters that I just explained. This is a very high accuracy pattern.
CAT
Another "buy the dip" trading idea! 😁Another “buy the dip” trade, just like our idea on DE. The principle is exactly the same, but with a few more details.
We have a rounded bottom, and the RSI is extremely divergent, indicating a possible rally.
In the 4h chart, the RSI is at 23, and we did break the BB today, but we closed inside it in the end. Like this wasn’t enough, we are above a support at 216 area.
A rally could make it hit the 231, but CAT must do the movement quickly, or it’ll lose momentum. It must not lose the 216 again, or it might keep dropping.
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See you soon,
Melissa.
USDCNY to Fall Towards the Lower End of the Accumulation The USDCNY continues to find itself in a solid downtrend. This is illustrated by the ADX indicator, which has been threading above the 25-point benchmark since late September 2020.
The ADX reached a peak around the time the price action fell to the upper boundary of the last Accumulation range at 6.4700. Afterwards, the price went on to establish a false bullish rebound.
The latter materialised in a Dead Cat Bounce pattern, which typically represents a temporary break in the development of a broader downtrend. The pattern failed to strengthen above the 20-day MA (in red), which is why the USDCNY was then able to break down within the Accumulation range.
That is why the strength of the underlying Markdown - an essential component of the Wyckoff Cycle - appears to be waning down, as underpinned by the ADX indicator after February 2021.
This represents an early signal that the USDCNY is once again getting ready to consolidate in a new range. Before this can happen, however, the price action looks poised to fall to the Accumulation range's lower boundary at 6.2650 once again.
Industrials needs a breatherXLI, the Sultan, was the ultimate DOW mover. He ruled over everyone including hedge fund managers. Tuesdays action to the upside was great but gave it up at the end of the day. Wed and Thursday continued to the downside. On Friday, the Sultan tapped the 8 day EMA and came back up but closed below previous day high. The issue with XLI is the channels are small. If this low channel is to break, look out below cause I'm thinking of a 3 point move down to 102 as support. Based on HON, FDX, and UPS, Sultan's rule might be done for this coming two weeks.
The 'Dead Cat Bounce' ScenarioPrice has been unable to rise clearly over the 40k level.
Good news is that it almost reached 40,500 today before finding resistance to drop below support at 38,500
At this stage it is important to see Higher Lows!
This means that if the price drops below the 36,000 level we run the danger of seeing a further drop / in this case the rise from 30k to 40k levels will simply be classified as one (Dead-Cat-Bounce) and we could be prepared to see a further drop to 30k.
Am I bearish now? No, I am still bullish but I also need to do what the chart commands. Right now we must be careful, if 36,000 is breached under we will be worried/turning into sell positions.
For the time being I have reduced my sell positions and opened some hedge positions (25% sell 75% buy).
Hope it helps,
the FXPROFESSOR
BTC Turns bearish on Daily - ShortBitcoin has dropped below the 20week and 200day moving averages for the first time since April 47th, 2020. With a triple bearish divergence, a break of the pitch fork trend and floating below the 20wk MA..I cannot help, but read this as bearish in the short term until we secure a weekly close back above the 20wk MA. Not sure how much lower we could go, there is no telling. How much longer until we reverse, unsure. Is this the end of the bull run? I don't want to believe so, but you cannot deny the chart. There is aways time to return when the whales give us a bullish sign that things are reversing, but I don't see on the chart right now. I remain bullish in the LONG. This is not financial advice, It is only my opinion.
Dead Cat BounceIn trading, "Dead Cat Bounce" refers to a temporary recovery that occurs after a sharp price decline that is usually followed by a downward trend. It can be defined as the chart phenomenon that occurs during a bearish movement.
Basically, it is an expected correction on a brutal fall in prices. In the market jargon, it is a trap for the bull traders.
Bulls, Stay Alert!
More Bearish Pressure on the NZDCAD The NZDCAD is about to test the strength of the ascending trend line. If it manages to break down below it on the third attempt, this would likely allow the pair to probe breaking even further down south - towards the previous swing low.
Upon completing the last 1-5 Elliott Wave Pattern, the pair is currently developing a corrective ABC pattern. Notice that the AB retracement is taking the form of a Dead Cat Bounce, which confirms the bearish expectations. Moreover, the Bounce peaked below the 50-day MA, which represents yet another selling indication.
Opportunity to Sell GBPNZD's Dead Cat Bounce The GBPNZD pair appears to be forming a new Dead Cat Bounce pattern, which typically signifies likely bearish reversals.
An opportunity to sell around 1.94500 (previous swing high) may emerge, provided that the price rebounds from the 50-day MA (in green) and 100-day MA (in blue) for a second time. It did the same during the establishment of the first Dead Cat Bounce.
If the price breaks down below the support at 1.92000, then the subsequent dropdown will likely test the psychologically significant support level at 1.90000.
New Zealand's CPI numbers and UK's unemployment data, both scheduled for publication on Tuesday, are likely to cause heightened volatility. This could serve as the catalyst for the expected bearish reversal.
$CAT Short-term swingCAT looks bullish again on the daily chart. Looks ready in the indicators as they've turned bullish yet again. Both the RSI and Stoch RSI had a crossover last week. We put in an inside day last week after being below the recent pullback's VWAP and reclaimed demand on the upside. Looking closely at price action to confirm a bullish trend to continue higher or to reverse below the highs' anchored VWAP. It is also looking like a short-term flag that could break out from.
$CAT Daily Head And Shoulders 4/12 (Healthy Pullback)Video breakdown on $CAT going into 4/12-16
CAT has Rejected New highs and set up a head and shoulders. It seems to be sitting on top of its 20 EMA and best respects the 50EMA which is my target if the H&S plays out. More videos on my tradingview page $220 P for 4/16 closed at .34 not a bad risk to reward.
QQQ very clear 5 waves down - The 'A' wave may be finished QQQ 5 waves down - the fib extensions measure out cleanly.
Because it appears there have been 5 waves down this implies it is the A wave of an ABC correction.
Now will watch for the B wave up dead cat bounce, before the c wave finishes it and could bring it lower.
There is another more bearish possible count here but wont post that just yet. If this ABC is the pattern that has started it, could play out something like this.
Many other tickers have this similar 5 wave structure down.
Look at the perfect bounce on this monthly candle level which was the monthly open for september 2020.
Volume climax.
Getting into oversold areas.
VIX never really spiked on this first drop...
Bigger fib extension long setup (yellow and red lines) could take this to the green target at 362 as long as the red line holds.
The more bearish elliott wave count would invalidate the fib setup.
TSLA very clear 5 waves down - The 'A' wave may be finished TSLA very clear 5 waves down and measurement levels are clean.
5 waves down is corrective and has 2 possible outcomes, this being the less bearish of the 2 and i lean towards this more conservative count for now.
It looks like tsla has put in an A wave of an ABC correction, and its very possible the A wave down is done.
Looking for a B wave bounce to start soon.
Other tickers as well as the QQQ have very similar 5 waves down.
Price bounced at the 50% fib of an extension fib setup. The longer term target for this fib setup is 1068 as long as 465 doesnt break.
Trendline Support.
Volume climax at lows.
RSI and Stoch oversold.
Watching for the start of the B wave up. Resistance into recent supply levels would make sense possibly up to 840.
CAT bullish flag rangeAs long as we are in this range CAT will continue its bullish accumulation and could go as far down as testing 100.
There is strong support there which gave us a great impulse up. There are many situations this can create right now.
Short pressure holds at 150...a clear expanding flat setup could be at play or bullish buttery extending
The long term move is UP...lots will be waiting for that breakout of this range! But where will it be??? will we tap 100 first before trying 200?? Ya I think so... we got close but not close enough!
manufacturing in the USA is ramping up. I would assume profits will come to CAT from many sources over the next 10 years.