Hey Market Pilot,
I think this week we are all wondering the same thing: Is the big move up the bullish sign we have been waiting for, or is it just a bounce in a downtrend and we should short it?
We don’t quite know that answer yet, but I will give you a few things to be aware of so we can have a little bit of an edge as time goes on and the charts reveal the details.
The first thing I want to note is that the move up we have seen this week and last, has not confirmed long on the higher time frames. I say that because so far price has moved up over the daily 50 simple moving average (SMA), but hasn’t tested it for support, and the daily Moxie Indicator™ is still below zero. Here are some examples pictured below:
When the Moxie Indicator™ is below zero while price is over the 50 SMA, this is called an Inverse Trampoline and it says, “Don’t go long now, or short it.” So I have to wait for a pullback in order to determine if the lower time frames can find support. It will probably be on the hourly chart, since I don’t see the daily chart confirming anything in the near future.
On the other hand, if this is the start of some sort of bullish trend, then we should see the lower time frames setup into support. The way that may look is opposite of what I described above, and I call it a regular Trampoline Move where price is below the 50 SMA and the Moxie Indicator™ is over zero. Here are examples in the same names on the hourly chart:
As you can see in the screenshots above, the Moxie Indicator™ is well over zero, but price has a long distance to fall just to find possible support at the hourly 50 SMA.
I have a feeling most of these tickers will end up falling below the hourly 50 SMA. At that point, we need to start examining whether price will find support just below the 50 SMA, or if price will keep falling past those levels.
Your Profit Pilot, TG