Welcome friends and haters alike — to this spectacular analysis, brought to you by the often imitated, never duplicated, legendary wizard of the markets! Let's jump right in! Looking at the four hour chart for TRX/BTC, we can see that price action is pushing the Bollinger bands to the downside, and trying to reenter the downtrend channel. If you recall from my last post, I said "Yes, a breakout above the downtrend channel has occurred, but there is no follow through. Nothing is happening." When you see weak breakouts like that, they often end up failing. Looking at TRX/BTC, it's toying with the top trendline of the channel, and I'm starting to suspect that if we reenter the downtrend channel, we will get the volatility spike that we've been expecting. For those who may not have seen yesterday's post, or need a refresher, we were talking about the clear volatility squeeze that is occurring in TRX/BTC.
For those of you who don't know what a volatility squeeze is, it is "when volatility falls to low levels and the Bollinger Bands narrow. According to John Bollinger, periods of low volatility are often followed by periods of high volatility. Therefore, a volatility contraction or narrowing of the bands can foreshadow a significant advance or decline. Once the squeeze play is on, a subsequent band break signal is the start of a new move. A new advance starts with a squeeze and subsequent break above the upper band. A new decline starts with a squeeze and subsequent break below the lower band."
A break back into the downtrend channel, will signal a miserable failed breakout attempt, and smart money will probably rush for the exit, prompting a rapid decline. On the downside, there is slight support at 450, but a break below that would send TRX/BTC into a state of freefall, because of a lack of downside support. If the top of the channel is held, the moving averages just overhead, and the 78.6% retrace, should act as heavy resistance.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-MPC loves you-
For those of you who don't know what a volatility squeeze is, it is "when volatility falls to low levels and the Bollinger Bands narrow. According to John Bollinger, periods of low volatility are often followed by periods of high volatility. Therefore, a volatility contraction or narrowing of the bands can foreshadow a significant advance or decline. Once the squeeze play is on, a subsequent band break signal is the start of a new move. A new advance starts with a squeeze and subsequent break above the upper band. A new decline starts with a squeeze and subsequent break below the lower band."
A break back into the downtrend channel, will signal a miserable failed breakout attempt, and smart money will probably rush for the exit, prompting a rapid decline. On the downside, there is slight support at 450, but a break below that would send TRX/BTC into a state of freefall, because of a lack of downside support. If the top of the channel is held, the moving averages just overhead, and the 78.6% retrace, should act as heavy resistance.
This has been your not-so-humble market wizard, droppin' knowledge like bombs in this place! Please follow, comment, like, and share on social media. Good luck trading everyone!
***This information is not a recommendation to buy or sell. It is to be used for educational purposes only.***
-MPC loves you-