Update Nikkei 225: Still short but changed upper trendline
This is an update from my previous idea. There are a couple of concepts in Technical analysis that I want to share, but let's look at what's changed and what's not changed:
Not Changed:
1. Still a short call.
2. The short position (SL and TP)
What's changed:
1. Changed upper trendline from horizontal to slightly upward slanting.
2. Changed end point of wave 5 (could be changed again)
There is one concept that I want to gel together between traditional TA and EW. Here goes:
1. In traditional TA, if we assume that we have an ascending triangle, the strength of a breakout (upwards) weakens as price nears the apex of the triangle. In fact, a breakdown becomes more likely and will be fiercer if the ascending triangle fails.
2. In EW, as we have seen here, if this is an ending diagonal, the next move will be a sharp down move.
The above 2 points, if we merge them together, became a failed ascending triangle and confirmed an "ending diagonal". Given that both results in sharp decline, we have a convergence of idea for the next move: a sharp downwards move in price.
Not Changed:
1. Still a short call.
2. The short position (SL and TP)
What's changed:
1. Changed upper trendline from horizontal to slightly upward slanting.
2. Changed end point of wave 5 (could be changed again)
There is one concept that I want to gel together between traditional TA and EW. Here goes:
1. In traditional TA, if we assume that we have an ascending triangle, the strength of a breakout (upwards) weakens as price nears the apex of the triangle. In fact, a breakdown becomes more likely and will be fiercer if the ascending triangle fails.
2. In EW, as we have seen here, if this is an ending diagonal, the next move will be a sharp down move.
The above 2 points, if we merge them together, became a failed ascending triangle and confirmed an "ending diagonal". Given that both results in sharp decline, we have a convergence of idea for the next move: a sharp downwards move in price.
Note
Would be stopped out based on the SL I set above. But I still think this is a short. Position your shorts carefully. Nikkei seems to be benefiting from the moves in the US markets.
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