- Previously, we said that traders would see if the bulls could create a strong retest of Mar 17 high followed by a breakout above, if the retest lacks follow-through buying, stalling around or below (Mar 17) high area?
- The market retested the Mar 17 high yesterday, closing above the middle of its range and closed as a bull bar with a long tail above.
- The bulls want the market to form a 2 legged sideways to up pullback. It is currently underway.
- They need to create credible buying pressure - consecutive bull bars closing near their highs.
- Traders will see if they can continue to create follow-through buying.
- The next target for the bulls are the 20-day EMA or the January 13 low.
- For today, the bulls want a retest of yesterday's (Mar 19) high followed by another leg up.
- The bears see any pullback as minor. They expect at least a small second leg sideways to down to retest the Mar 13 low after the pullback phase.
- The 9-bar bear microchannel on the daily chart and the 4-bar bear microchannel on the weekly chart increases the odds that the first pullback (current pullback) would be minor and not lead to a reversal up.
- Because of the climactic selloff and parabolic wedge, the market may try to form a minor pullback. The pullback phase is currently underway.
- Traders will see the strength of the pullback. If it is strong (consecutive bull bars closing near their highs), they may look for a retest of the breakout point - Jan 13 low.
- If the pullback lacks follow-through buying (overlapping candlesticks, doji bars, bear bars, long tails above bars), the odds of another leg down AFTER the pullback phase increases.
- For now, traders will see if the bulls can create a strong retest of yesterday's (Mar 19) high followed by a breakout above.
- Or will the retest lacks follow-through buying, stalling around or slightly above yesterday's high area?
- I will update the post again later today.
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Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.