As we can see from the chart, the price is in a clear bullish trend. So far the price was developing within a very narrow upward area. During the upward movement, the price increased by small steps and also by small corrections as I have highlighted in the chart.
In my personal opinion, due to the covid issue, the market still believes in the US economy, and on the other hand, this belief is not so strong. This makes market players maintain a position from slightly positive to neutral in relation to the growth of the US economy. We can observe this market behavior from the upper resistance line that worked very well in the past. We can see a lot of resistance points from the top and also the price looks like it is sliding close to the upper resistance line.
So it will come at a time when the market will believe that everything is overpriced.
The question now is ... Did that moment come? As I see it, perhaps the market is not yet ready for that big downturn.
Despite the slowdown in the US economy, this will not be reflected so quickly. Meanwhile, we may be in a situation where the price has made a deep correction as in September-20. Many traders may disagree with the pattern forecast I am actually making for another uptrend. From the technical perspective, we should not anticipate the patterns but this is in line with my overall idea.
However, this is my personal perspective on observing the US economy.
wouldn't the lower trend line only be valid if there is at least 3 touches?
KlejdiCuni
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@eazywayout, Sometime yes, however I said that it is a different perspective :)
darshan1992
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@eazywayout, I agree with you here. I don't think you can use a trend still in formation as a point for a trendline.
KlejdiCuni
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@darshan1992, I see that no one read the content inside the idea :) These are the last two rows: "Many traders may disagree with the pattern forecast I am actually making for another uptrend. From the technical perspective, we should not anticipate the patterns but this is in line with my overall idea.
darshan1992
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@KlejdiCuni, I did read it. But you have been calling for a bullish reversal 4 times since we turned down at the beginning of this year. Each time you just create a new pattern when the previous one fails. I agreed with some of the previous ones. Maybe you are a perma-bull. Obviously you have very good credibility but I disagree with this pattern.
KlejdiCuni
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@darshan1992, On the daily chart we can not expect aggressive reversals. If you check all the previous waves have a minimum number of days to be completed and if I am not wrong it come to more than one month. Many people make a general mistake that they trade Daily charts as aggreasive trades. Daily charts are only for long term investors. On other hand I am.not perma-bull. Index is very different from the companies. If you see many of the companies inside this index and Nasdaq are suffering losses , however both NQ and ES are just moving high. How is that possible? in my opinion if the companies that are taken in consideration are suffering the index should go down or in range trading as minimum.
Since vaccine was created indexes are way to far from the previous (TOP) higher high...Does it make sense to you? For me not at all. The U.S economy didn't grow at all as all the countries are suffering economic problems. So how is that possible that S&P and NASDAQ are just moving higher? For me all of this is a big pump and it will crash strong one day. So I am keeping the things simple..if it will invalidate what I call invalidation you will have a bad trade...otherwise I will keep trading the bullish wave.
Big failed in this analysis and have to update it again if any changes
KlejdiCuni
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@anupgandhi72, The problem is that many people don't see where failure comes from. This is a daily chart. It is used to forecast and just for general information. It is not used to trade. if you trade it you must have a wide stop loss.