Although we are still in a bear market, the bounce from the recent lows gave us some clear signals that the bear market is soon coming to an end!
First and foremost, there is the obvious triangle in which nearly all of 2018 took place. As the triangle closes, a decision is forced upon us, and the bears have proven unable to break through the bottom. So it seems that the only way out is up.
Secondly, and less obvious: there is a trend change in the 21-day moving average. Notice how, instead of forming yet another lower low, it has formed a higher low. This marks a clear change in the trend, and a shift from bearish sentiment to bullish sentiment. I don't think there is enough strength in the market to make a higher high yet: there is not enough stretch in the RSI to take us there without reaching heavily overbought levels, and there is some bearish divergence forming on the shorter time frames. Also, we are still constrained by the giant triangle. This is not yet the setup that will allow us to break free of the giant triangle, and show the bears who is in charge.
Instead, I predict the current push upwards to break around 7.5k, and then one final dive back to the low 6k levels, forming yet another higher low. At this point the bears will be sufficiently weakened, and the top of the triangle will be close enough to be easily broken. Once we break through convincingly, that should signal a clear end of the bear market, and provide some much needed confidence to the bulls.
As that guy from Green Day once said: "Wake me up when September ends"
First and foremost, there is the obvious triangle in which nearly all of 2018 took place. As the triangle closes, a decision is forced upon us, and the bears have proven unable to break through the bottom. So it seems that the only way out is up.
Secondly, and less obvious: there is a trend change in the 21-day moving average. Notice how, instead of forming yet another lower low, it has formed a higher low. This marks a clear change in the trend, and a shift from bearish sentiment to bullish sentiment. I don't think there is enough strength in the market to make a higher high yet: there is not enough stretch in the RSI to take us there without reaching heavily overbought levels, and there is some bearish divergence forming on the shorter time frames. Also, we are still constrained by the giant triangle. This is not yet the setup that will allow us to break free of the giant triangle, and show the bears who is in charge.
Instead, I predict the current push upwards to break around 7.5k, and then one final dive back to the low 6k levels, forming yet another higher low. At this point the bears will be sufficiently weakened, and the top of the triangle will be close enough to be easily broken. Once we break through convincingly, that should signal a clear end of the bear market, and provide some much needed confidence to the bulls.
As that guy from Green Day once said: "Wake me up when September ends"