Is this consolidation, or the beginning of a new downtrend?
We've been in the no trade zone (between 38.2 and 61.8) for a month now, ever since price got rejected by the 8/1 Gann. To be honest, I didn't think we would make it above the 4/1 Gann, so I've been staying away from this market.
Now, price action is revealing some weakness at these levels. The 61.8, as you know, is where longer-term holders and professional traders made the decision to sell. Based on the volume in the CM_WVF indicator, there may have been enough selling to breakup the consolidation and threaten a new downtrend. RSI is also seemingly trending downward now. Of course, this volume could mean nothing if enough time passes and supports hold.
Bearish scenario:
If we trade below the 38.2, I'll interpret the chart on the daily time frame as bearish. Breaking $8,500 will be an additional bearish signal. Daily chart will not be full-blown downtrend until the EMA50 crosses below the EMA200. At that point, short selling will be the cyclical trade.
Bullish scenario:
If we trade above the 61.8 and break through the 8/1 Gann, we are bullish until all-time-high.
Now, price action is revealing some weakness at these levels. The 61.8, as you know, is where longer-term holders and professional traders made the decision to sell. Based on the volume in the CM_WVF indicator, there may have been enough selling to breakup the consolidation and threaten a new downtrend. RSI is also seemingly trending downward now. Of course, this volume could mean nothing if enough time passes and supports hold.
Bearish scenario:
If we trade below the 38.2, I'll interpret the chart on the daily time frame as bearish. Breaking $8,500 will be an additional bearish signal. Daily chart will not be full-blown downtrend until the EMA50 crosses below the EMA200. At that point, short selling will be the cyclical trade.
Bullish scenario:
If we trade above the 61.8 and break through the 8/1 Gann, we are bullish until all-time-high.
Comment:
4HR view:
You can see a bearish cross is imminent and price is back-testing the breakdown level. This is still the no trade zone, so no trading goes on in the grey zone ;)
