Pattern Similarity with 2018 Bear Market Recovery
Updated
What follows is a comparison of the daily chart during the 2018 bear market recovery with the present weekly chart. Markets like to repeat patterns, with similarities and differences:
Repeating Pattern Similarities:
Repeating Pattern Differences:
Should the pattern repeat itself again on the higher time frame, I've outline a rough path that could take us into one of the two red boxes, or even somewhere in between, with:
-- Conservative Targets near previous head and shoulder top lows
-- Aggressive Targets stopping at or near the ascending neckline, and this would coincide with my theory of a lower high double-top, which I think is the more likely scenario (see related idea below)
-- Otherwise the potential to stop somewhere halfway in between either
Chart is long until recovery completes at one of the levels above.
This idea fails immediately if we fail to remain above the wedge here on a re-test on the falling wedge breakout (3-day chart pictured below):
Related Idea - neckline targets coincide with lower-high double-top theory:
Cheers, and thanks for taking the time to read through my ramblings!
-- dudebruhwhoa
Repeating Pattern Similarities:
- Both made a head and shoulders top
- OBV and Volume show similar patterns of behavior in both charts
- The amount of correction prior to recovery is similar
Repeating Pattern Differences:
- 2018's head and shoulders top had a descending (or practically straight) neckline. 2023's head and shoulders top has an ascending neckline
- OBV has dipped more during the present downtrend than before, and Volume peaked earlier during the head/shoulders top this time (Volume is also down more now than it was during 2018 recovery, respectively)
- Signs are pointing to a recovery, but DXY is behaving strangely and market conditions are entirely different than they were in 2018.
- 2023 Recovery may be higher than 2018, if neckline is reached - it could look like a double-top with a lower high (potentially even another HS pattern at the end)
Should the pattern repeat itself again on the higher time frame, I've outline a rough path that could take us into one of the two red boxes, or even somewhere in between, with:
-- Conservative Targets near previous head and shoulder top lows
-- Aggressive Targets stopping at or near the ascending neckline, and this would coincide with my theory of a lower high double-top, which I think is the more likely scenario (see related idea below)
-- Otherwise the potential to stop somewhere halfway in between either
Chart is long until recovery completes at one of the levels above.
This idea fails immediately if we fail to remain above the wedge here on a re-test on the falling wedge breakout (3-day chart pictured below):
Related Idea - neckline targets coincide with lower-high double-top theory:
Cheers, and thanks for taking the time to read through my ramblings!
-- dudebruhwhoa
Note
Update - here's a long-term chart supporting the double-top theory:Note
Updating this covering more scenarios and a wider area of targets:
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