This is getting tighter and tighter. Last nights post we were watching to see if bulls could break the pattern bullish or if they'd have yet another lower high. The latter happened as bears defended their key level by $38.
Those not familiar with equilibrium's, I have tried to outline it with the lines drawn from each lower high and higher low (red and green lines from key levels within oval).
Essentially what we see is our initial high at $12,320 and our initial pullback low at $11,187.
From there it's a series of lower highs and higher lows. This creates a coiling or tightening pattern as the bulls and bears defend (bulls defending against lower lows and bears defending against higher highs). As each side defends successfully, the pattern coils tighter and tighter until eventually this pattern will become tight enough that one side caves and we most likely will see a break with significant follow through. Equilibrium patterns are essentially 50/50 patterns so knowing the key levels is very important.
Many will play the symmetrical triangle pattern off of these setups as they are essentially the same idea. Key difference in my opinion is in equilibrium's, we are using specific price points based on prior lower highs or higher lows. Triangles are relying on lines drawn and as is case with this one, many likely bought in bullish last night in the $11,900s only to see minimal follow through from there and just another lower high at $12,050 as the bulls did poke above the triangle but did not break above to a higher high which leaves those playing equilibrium's safe from a premature entry.
One could also play this equilibrium by attempting to load up bullish as we near support (most recent higher low) knowing it's a low risk as they'd set a stop loss just below the prior higher low. Or vice versa with bears who would attempt to play this by entering near resistance (most recent lower high). This is commonly known as bottom fishing (for bull entries) and top fishing (for bear entries). Both offer low risk entries or you wait and play the actual break of the pattern.
So currently we seek for bears to defend their most recent higher low of $11,451 and bulls established another lower high last night at $12,050. Once this pattern breaks (would be shocked if it does not break one direction today or tomorrow), I personally do expect significant follow through and will play the pattern accordingly if bulls get the break their direction. If bears get the break then I'll wait to see follow through and if bears can drive the price ideally below $11,000 to offer up nice oversold opportunities. Long winded explanation today but hopefully it helps some of you!
Just My 2 Sats!
Those not familiar with equilibrium's, I have tried to outline it with the lines drawn from each lower high and higher low (red and green lines from key levels within oval).
Essentially what we see is our initial high at $12,320 and our initial pullback low at $11,187.
From there it's a series of lower highs and higher lows. This creates a coiling or tightening pattern as the bulls and bears defend (bulls defending against lower lows and bears defending against higher highs). As each side defends successfully, the pattern coils tighter and tighter until eventually this pattern will become tight enough that one side caves and we most likely will see a break with significant follow through. Equilibrium patterns are essentially 50/50 patterns so knowing the key levels is very important.
Many will play the symmetrical triangle pattern off of these setups as they are essentially the same idea. Key difference in my opinion is in equilibrium's, we are using specific price points based on prior lower highs or higher lows. Triangles are relying on lines drawn and as is case with this one, many likely bought in bullish last night in the $11,900s only to see minimal follow through from there and just another lower high at $12,050 as the bulls did poke above the triangle but did not break above to a higher high which leaves those playing equilibrium's safe from a premature entry.
One could also play this equilibrium by attempting to load up bullish as we near support (most recent higher low) knowing it's a low risk as they'd set a stop loss just below the prior higher low. Or vice versa with bears who would attempt to play this by entering near resistance (most recent lower high). This is commonly known as bottom fishing (for bull entries) and top fishing (for bear entries). Both offer low risk entries or you wait and play the actual break of the pattern.
So currently we seek for bears to defend their most recent higher low of $11,451 and bulls established another lower high last night at $12,050. Once this pattern breaks (would be shocked if it does not break one direction today or tomorrow), I personally do expect significant follow through and will play the pattern accordingly if bulls get the break their direction. If bears get the break then I'll wait to see follow through and if bears can drive the price ideally below $11,000 to offer up nice oversold opportunities. Long winded explanation today but hopefully it helps some of you!
Just My 2 Sats!
