The 350 Daily Simple Moving Average Support Theory
Updated
Moving Averages have long interested me. The idea of a dynamic support and resistance level with the ladder up and ladder down effect during new trends has been a fantastic thing to take notice of.
That brings us to the 350 Daily Simple Moving Average because it is not something we come across all the time but rather only a few times here and there over the course of many, many years.
Looking at the life of the STAMP chart which goes back to 2011 we can count the interactions on two hands.
The Major interest here for me is in the approach of the 350 DMA after posting a local Swing High.
This has only happened three times with the current one happening now as the 3rd time.
What got my attention was the bounce and how sloppy the 350 DMA was acting as Support. The bounces from the 350 are between the 236 and the 382 of the local move while the initial push lower was between at 113 and a 127 extension of the retrace.
For the first time - it looks like this.
Now things get a little more interesting when we add in the 200 DMA as a bounce level of Resistance... Like This.
Again, the 350 DMA Support is Sloppy and by no means a beautiful level but rather a zone and in retrospect, the reversal of a local drop for a decent bounce.
The 200 DMA acted as resistance with confluence from the 382 retrace from the 1163 high to the 339 low.
This did go on to paint a lower low when this move finished...
Once again we see the drive down to the 350 DMA with a fairly sloppy support. From there we get a decent bounce just beyond the 236 retrace from the 19,666 high to the 6427 low. The confluence here again was the resistance provided by the 200 DMA. After the bounce we head south and land between the 113 and the 127 extension from the bounce.
Again, like before, this went on to paint a lower low...
That brings us to our current approach.
I will admit that there is very little history and data to support such a theory but that is why a theory is a theory and not a fact or a rule.
Given the 350 DMA interaction, the distance to the 200 DMA and the overwhelming confluence near the 382 fib level that we didn't even get into in this theory but are absolutely out there, I feel this has potential. Maybe not for every trader but possibly just another way to look at current price action and see a reason for further downside as well as a bump in-between.
I am also very aware that the 200 DMA will move and that will affect future resistance levels as well as the retrace top, if achieved will effect the 113/127 extension levels. unfortunately, those things can only be planned for after future events take place.
So what I did for the extension was give a low side 236 bounce and a separate high side 382 bounce. This will just leave a range of possibilities if this does indeed move in the right direction.
That brings us to the 350 Daily Simple Moving Average because it is not something we come across all the time but rather only a few times here and there over the course of many, many years.
Looking at the life of the STAMP chart which goes back to 2011 we can count the interactions on two hands.
The Major interest here for me is in the approach of the 350 DMA after posting a local Swing High.
This has only happened three times with the current one happening now as the 3rd time.
What got my attention was the bounce and how sloppy the 350 DMA was acting as Support. The bounces from the 350 are between the 236 and the 382 of the local move while the initial push lower was between at 113 and a 127 extension of the retrace.
For the first time - it looks like this.
Now things get a little more interesting when we add in the 200 DMA as a bounce level of Resistance... Like This.
Again, the 350 DMA Support is Sloppy and by no means a beautiful level but rather a zone and in retrospect, the reversal of a local drop for a decent bounce.
The 200 DMA acted as resistance with confluence from the 382 retrace from the 1163 high to the 339 low.
This did go on to paint a lower low when this move finished...
Once again we see the drive down to the 350 DMA with a fairly sloppy support. From there we get a decent bounce just beyond the 236 retrace from the 19,666 high to the 6427 low. The confluence here again was the resistance provided by the 200 DMA. After the bounce we head south and land between the 113 and the 127 extension from the bounce.
Again, like before, this went on to paint a lower low...
That brings us to our current approach.
I will admit that there is very little history and data to support such a theory but that is why a theory is a theory and not a fact or a rule.
Given the 350 DMA interaction, the distance to the 200 DMA and the overwhelming confluence near the 382 fib level that we didn't even get into in this theory but are absolutely out there, I feel this has potential. Maybe not for every trader but possibly just another way to look at current price action and see a reason for further downside as well as a bump in-between.
I am also very aware that the 200 DMA will move and that will affect future resistance levels as well as the retrace top, if achieved will effect the 113/127 extension levels. unfortunately, those things can only be planned for after future events take place.
So what I did for the extension was give a low side 236 bounce and a separate high side 382 bounce. This will just leave a range of possibilities if this does indeed move in the right direction.
Note
I had to make some adjustments due to the 6425 lower low
Note
Current updated view.
Note
The 200 DMA is curling downward while the 350 DMA is still heavily sloped upward
The reaction at the Last Major Lower High was a good reversal but we did breach on STAMP. We did not breach on Coinbase.
Note
Target Acquired
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