Calling all Range Traders...
Updated
Good Evening Traders,
I hope you're doing well today. I wanted to give a quick update and clarification. As you can see in the chart above I had created 2 boxes. These are ranges I believe we will continue to stay in until the price discovery is more certain and market decides whether we're in a Bear or a Bull Market. Now, it's rarely talked about, because a lot of traders and investors see things in black and white, bull or bear, up or down; when really there's another direction and classification that I'd like to speak about. It has other names, but I call it a Ranging Market; this is when the market trades in ranges rather than trends; trends being uptrends (bull - HH & HL's) or downtrends (bear - LL & LH's).
What is a Ranging Market?
Ranging Market's are opposite of Trending Markets (bull or bear), ones in which the price continues to move between higher prices and lower prices; the price action is range bound and moves mostly sideways. The range of prices can be small or large.
If it's small price movement, it's typically referred to as chop, consolidation, or more plainly, 'sideways action'. Most only consider it for a short period, such as hours or days, but in reality they can last weeks or months.
Now why the brief lesson on ranging vs trending markets? I believe we're in one, and they require a change to both analysis and trading techniques; we can skip the latter.Assuming I'm correct, which I could be wrong, knowing that we're in a Ranging Market (for likely a week or 2 more) should dampen the idea that a big breakout to the up or downside is right around the corner and any wave analysis may need some adjustments as well.
With all that said, the above chart, which is still just a continuation of my January chart, shows the levels I believe we're still ranging. Let the 200MA be your guide.
As the chart above shows, the H&S top (mid-candle right where the arrow down is on the left) that resulted in the 1st Lower Low (LL) shown, then moves up to hit a double top budding up against the 200MA resistance, then dropping to a recent Lowest Low around 410, bounced with high Relative Volume up... Went just above the trendline, pops back down quickly forming a double bottom... another weekly run up to the 200MA with a little more bullish confidence, moving just over the 200 to hit a fib/resistance for what looks like another bounce (although it is still hugging the 200MA, so we could see another try by the bulls, otherwise) toward the trendline around 439 or if that breaks 435-432.
Just looking at the PA one might think, well obviously, it's a bear market..20% pullback..Going to tank soon...While the Bulls see we just hit a recent lowest low, that must have been the bottom... Neither are what I see. I see a bullish runup to the double bottom almost identical to the breakdown that followed, then a bullish gap-up, bearish gap-down, and yet again another bullish runup... Are we seeing a pattern here?
Anyway, I hope you're doing well, whichever side of the trade you choose to be on.
Comment, like, share, support, follow, etc.
Cheers,
Mike
(UPRIGHT TRADING)
Referenced January chart:
I hope you're doing well today. I wanted to give a quick update and clarification. As you can see in the chart above I had created 2 boxes. These are ranges I believe we will continue to stay in until the price discovery is more certain and market decides whether we're in a Bear or a Bull Market. Now, it's rarely talked about, because a lot of traders and investors see things in black and white, bull or bear, up or down; when really there's another direction and classification that I'd like to speak about. It has other names, but I call it a Ranging Market; this is when the market trades in ranges rather than trends; trends being uptrends (bull - HH & HL's) or downtrends (bear - LL & LH's).
What is a Ranging Market?
Ranging Market's are opposite of Trending Markets (bull or bear), ones in which the price continues to move between higher prices and lower prices; the price action is range bound and moves mostly sideways. The range of prices can be small or large.
If it's small price movement, it's typically referred to as chop, consolidation, or more plainly, 'sideways action'. Most only consider it for a short period, such as hours or days, but in reality they can last weeks or months.
Now why the brief lesson on ranging vs trending markets? I believe we're in one, and they require a change to both analysis and trading techniques; we can skip the latter.Assuming I'm correct, which I could be wrong, knowing that we're in a Ranging Market (for likely a week or 2 more) should dampen the idea that a big breakout to the up or downside is right around the corner and any wave analysis may need some adjustments as well.
With all that said, the above chart, which is still just a continuation of my January chart, shows the levels I believe we're still ranging. Let the 200MA be your guide.
As the chart above shows, the H&S top (mid-candle right where the arrow down is on the left) that resulted in the 1st Lower Low (LL) shown, then moves up to hit a double top budding up against the 200MA resistance, then dropping to a recent Lowest Low around 410, bounced with high Relative Volume up... Went just above the trendline, pops back down quickly forming a double bottom... another weekly run up to the 200MA with a little more bullish confidence, moving just over the 200 to hit a fib/resistance for what looks like another bounce (although it is still hugging the 200MA, so we could see another try by the bulls, otherwise) toward the trendline around 439 or if that breaks 435-432.
Just looking at the PA one might think, well obviously, it's a bear market..20% pullback..Going to tank soon...While the Bulls see we just hit a recent lowest low, that must have been the bottom... Neither are what I see. I see a bullish runup to the double bottom almost identical to the breakdown that followed, then a bullish gap-up, bearish gap-down, and yet again another bullish runup... Are we seeing a pattern here?
Anyway, I hope you're doing well, whichever side of the trade you choose to be on.
Comment, like, share, support, follow, etc.
Cheers,
Mike
(UPRIGHT TRADING)
Referenced January chart:
Note
****bullish runup to the double top (not bottom)I hope adding the zigzags and arrows didn't make things too cluttered, was trying to illustrate this PA.
Site: uprighttrades.com
old site: uprighttrader.com
Scripts: tradingview.com/u/UPRIGHTTrading/
Like & follow for great ideas & indicators!
old site: uprighttrader.com
Scripts: tradingview.com/u/UPRIGHTTrading/
Like & follow for great ideas & indicators!
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