After a downtrend we have a trading ring situation so we will have two possibilities:
• A strong breakout with a green candle with a high volume then a very strong buy signal.
• A breakout with a red candle then a very strong sell signal.
Personally, I recommend the first hypothesis.
I got long here. if price beaks the low it will be a change in behavior thats been going for a few months. a 20 pip stop on a 240 chart is cheap risk and gets me below the recent low and below the major down CME_MINI:MCDM2021 swing. if price fails and cracks the major swing , we could double that move to the downside. if it hold here, I see a try for new highs.
after a long trading range, the market dropped. Then a pullback trying to reach the previous support was entamed.
if the market has a strong green volume, it is obvious that we will reach the previous tops of the market. If else, the support (yellow) will be broken and the market would begin a descend.
So let's look at the volumes and see what algotraders will decide...
