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Overextention

Follow up on the ES1! overextensionAnyone who has read my recent post will have noticed that we are tracking the increasingly over-expansive market in the CME_MINI:ES1! . If the trend is indeed our friend, then prices should remain moving upwards. Which is what I expect will happen. But in order to go into a strong uptrend, first some levels of support must be tested, or else we risk overexpanding even more. At which point, buying would become extremely dangerous. To avoid this risk, it's better to buy at discounted prices and hoping the price does indeed go ballistic. This is much preferable to buy while price is increasing, as many novice traders do due to FOMO. With a new local maximum in place, we can safely say that a solid support has been created, yet it hasn't been tested. This in combination with the short term MA and the 2nd STD could provide additional support to the area. Making it a safe bet it won't go through. However, if this were to occur, then this would be a sign of a debilitating stock market and could potentially cause a crash. As there is a very large gap between our current supports and the previous ones. Which could lead markets to panic. I don't believe it's time yet, I think we are still missing a strong and not so long-lived final wave before we lose momentum and then crash.
CME_MINI:ES1!Long
by DarkMessiah777
Wave exhaustionThe main purpose of analyzing waves is to understand when the current wave is exhausted aka overextended aka overbought aka oversold. What is every1 seem to miss is that exhaustion is not based exclusively on "price gone too far", but also on "too much time passed" and "not much volume was traded" as well. That's one of the main reasons why your comparative analysis, divergences on so called "indicators" do not work properly. It simply can't. These methods do not gain time & volume information from the data. When you analyze order flow on any resolution, be it 1 minute, 5 years or tick chart, you're interested in 2 waves: current wave and *the very last (previous) wave in the same direction . * including the imaginary waves Don't forget to turn in log scale when it's needed! You compare these 2 as the current wave develops and keep updating the answer to the binary question, "which of these two waves is weaker". Strength of a wave = it's ability to continue. Every wave starts strong and goes weaker and weaker, the factors are: 1) Time. Horizontal size of a wave (in bars), more time (more bars) - weaker ; 2) Range. Vertical size of a wave, higher range - weake r; 3) Volume, or inferred volume. You sum up all the volume within a wave, or sum up all the bar sizes within a wave. Less volume - weaker .* * in order not to sum up anything within a wave yourself, here you can turn in volume/range bars and simply count em. And from that moment it's like "Best of 3" comparison. 1) Time. Wave A 10 bars, wave B 5 bars. Wave B is stronger; 2) Range. Wave A 546 points, wave B 890 points. Wave A is stronger; 3) Volume. Wave A 10k, wave wave B 8k. Wave A is stronger; So at that point, wave A was stronger = wave B was weaker. This will be giving you a binary answer which wave is weaker. When the current wave becomes weaker than the last wave in the same direction, current wave is considered exhausted. P.S.: wave start in time (first bar of the wave) is the level origin itself or the first bar that touched a level if we talked about a new wave starting from an already positioned level, or about a wave started after clearing a positioned level. The more you'll think about the more it'll make sense. An example. Remember seeing fast price jumps? After some, the price reverses very fast and goes back, after others prices continues in the direction of the jump. In most of the cases the current wave (the jump) gets exhausted in terms of price, but not exhausted in terms of time (the jump was very fast). So in terrms of time and price both waves are 50/50. What is different is volume. If the current wave (the jump) had a huge volume, overall it's still not exhausted, hence it continues. Sounds familiar? Sounds logical? Just the last simple and obvious thing, in most cases you won't need to calculate sum volumes/ranges, usually at the moment of analysis the current wave is already longer and higher than the previous one in the same direction, hence the current wave is already exhausted. Yessir
SP:SPXEducation
by gorx1
1
RUNEUSD Short Reasons to sell Overextension of the RSI on the 4hr Bearish DIV on 1hr and 2hr Last time we saw a move like this was 04 Nov 2020 with a 20% correction happening Strong resistance at $6 Head and shoulders still intact (but subject to change as we are in a bull run and this is a bearish pattern) low success rate in bull runs Could see price revisit $4.80 Reasons to buy Very strong bullish daily candle with a breakout of the descending channel Doji at support level on 25th March Good news came out in regards to ASGARDEX/Multichain going live soon
FTX:RUNEPERPShort
by Kai-FX
BTC ConsolidatingAfter the news, BTC hit new highs. Here we can see how the BTC is consolidating in 1H chart, after a pike without volume, we hope to see a lower right shoulder; which could be very posible as the market is getting overextended.(As we can see with the 20-50-200 SMA's). That would be the most probable thing that could happen. But if the right shoulder happens to be higher than the head, we will likely see a last high large green candle, breaking the new high and then a pullback to the head or to the shoulder line or a downward trend. After all, it is obvious that we all should get involved in cryptos this year. Have an amazing day!!
BITSTAMP:BTCUSD
by Fernando_132
1
Possible transition mid-term from bearish to bullish trendShort term - Short bias Long term - Overextension and possible transition/reversal Price looks a bit overextended on the weekly chart with a strong 2 bar reversal on the daily chart. Momentum on the other hand is still in favor of the bears so another sell at the measured move objective around 1.89000 is clearly justified as long as we stay underneath 1.90000 on a daily closing basis. But I think this pair is due for some bullish correction long term so if we see some strong bullish rejection from the 1.86000 area I am open to buy at this area with stops below the last swing low.
Short
by Sascha_Gogolin