LTC/USD was getting Bollinger Band squeezed
by the consolidation of price between the .5 Fib
retracement area and the .236 retracement area
following the sharp drop in markets in mid May.
Now we see that the price has tried to break downward
out of the squeeze, implying what seems to be a bearish
bias only to bounce up off the .236 area and enter back
into the Bands. We could be witnessing a head fake, one
of John Bollinger's favorite indicators with the Bands,
leading to a sharp upwards movement.
Firstly, we need to be sure the 200 SMA
(purple line) isn't now being flipped from
support to resistance, potentially rejecting price
around $145 indicating we should head further down.
If it does turn to resistance and adds conviction
to the bearish bias, that's a big indication that it
would be most advantageous to stay away from
long positions.
We will see within a week or two if this head fake does
in fact play out and we get a nice walk up the bands with
targets at:
$174.81 (.382 Fib line, middle of range)
and
$221.85 (.5 Fib line, top of range)
Another thing to keep in mind is that we could just keep
squeezing for months after this head fake occurs before
making any truly definitive movements. It will be fun to
watch one way or another.
by the consolidation of price between the .5 Fib
retracement area and the .236 retracement area
following the sharp drop in markets in mid May.
Now we see that the price has tried to break downward
out of the squeeze, implying what seems to be a bearish
bias only to bounce up off the .236 area and enter back
into the Bands. We could be witnessing a head fake, one
of John Bollinger's favorite indicators with the Bands,
leading to a sharp upwards movement.
Firstly, we need to be sure the 200 SMA
(purple line) isn't now being flipped from
support to resistance, potentially rejecting price
around $145 indicating we should head further down.
If it does turn to resistance and adds conviction
to the bearish bias, that's a big indication that it
would be most advantageous to stay away from
long positions.
We will see within a week or two if this head fake does
in fact play out and we get a nice walk up the bands with
targets at:
$174.81 (.382 Fib line, middle of range)
and
$221.85 (.5 Fib line, top of range)
Another thing to keep in mind is that we could just keep
squeezing for months after this head fake occurs before
making any truly definitive movements. It will be fun to
watch one way or another.