Is the Downtrend Nearing its End?Last Friday, on October 13th, a significant white candle with exceptionally high volume was observed, possibly driven by two catalysts:
– Escalating geopolitical conflicts.
– A decrease in CPI, leading to market expectations of a potential halt in rate increases by the Fed.
Trend
– A large white candle with exceptionally high volume touched the upper boundary of the downtrend channel.
– Let's observe if the market can sustain its bullish momentum next week and breach the downtrend channel.
Symmetrical Projection: Breaking the Downtrend “N” Pattern
– The 100% price projection from the initial swing starting at the 2nd lower high has been achieved.
– Furthermore, the price has already surpassed the 100% projection of the pullback, indicating the possible termination of the downtrend pattern.
– After this breach, we can expect either a reversal in the trend or a sideways movement.
Conclusion
– An uptrend is more likely to occur based on the two situations mentioned just now:
A large bullish candle with exceptionally high volume is on the verge of breaking the downtrend channel.
The downtrend N pattern has been disrupted.
Preparation for the Possible Uptrend Scenario
– Instead of simply jumping into the breakout, I will be waiting for a retest before getting on board.
– Potential retest levels: Some key Fibonacci retracement levels from the lowest low (A) to the previous high (B) (assuming the previous high is the initial target price of the upward move).
The 0.236 level: close to the key level at 1969.
The 0.382 level: close to the high of the second pullback of the downtrend.
The 0.5 level
Not Financial Advice
The information contained in this article is not intended as, and should not be understood as financial advice. You should take independent financial advice from a professional who is aware of the facts and circumstances of your individual situation.
