Looking for long term correction
As we near the end of the month, we can start to look at the monthly chart. RSI is still in the low 90's and currently forming a reversal candle and it is highly likely it will print one with 8 trading days left given the developments on the weekly and daily charts.
Looking at the weekly chart, we have bearish divergence from the all time high. The last two weeks have lower than average bull volume on the bounce with upper wicks formed on both weeks.
Lastly, looking at the daily chart, we never confirmed a daily trend change and closed today below the 20 period moving average with a reversal candle to the downside. Bearish divergence on the daily is playing out right now and volume is very weak on the bounce with every day since our recent low having below average volume to the upside. The bulls appear to have run out of momentum. The gap below still was never filled, but once this trades to that price it is likely that is not the final destination. I believe we are looking for weeks/months of correction to cool off the monthly RSI.
Looking at the weekly chart, we have bearish divergence from the all time high. The last two weeks have lower than average bull volume on the bounce with upper wicks formed on both weeks.
Lastly, looking at the daily chart, we never confirmed a daily trend change and closed today below the 20 period moving average with a reversal candle to the downside. Bearish divergence on the daily is playing out right now and volume is very weak on the bounce with every day since our recent low having below average volume to the upside. The bulls appear to have run out of momentum. The gap below still was never filled, but once this trades to that price it is likely that is not the final destination. I believe we are looking for weeks/months of correction to cool off the monthly RSI.
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