In this chart, I take a look at the chart from the perspective of measured moves and where likely algo supports and resistances are likely to be found.
I measured out several FIBs from 0 to the previous few tops and from the March 2020 bottom to the previous few tops. When doing this you can see a very clear pattern of similar FIB groups ie; .382s in a range, .5s in a range, .618s in a range, etc. As you can also clearly see during this large move down, the price is generally stepping down to these fibs after having ranged for several days or weeks.
The space between the .5s and .618s is the typical reversal zone in a measured move. When trading you want to look for reduced risk trades. Long-term traders and investors will want to look at entry 1 as a range to build their first position and entry 2 as a zone to double their entry 1 position. (Another option is now starting DCA or dollar-cost averaging) The profit-taking zone is the -.236 which gives us a range of $79K-85K. With a stop of around $24K we have an excellent reduced risk trade set up that is between 3 to 1 and 4 to 1. IF the stop hits, we are likely going to be going much much further down and we all get rekt.
Currently, we have just entered the .5 fib zone. Based on recent PA, I would expect us to range here for at least a few days if not weeks. If we end up bouncing, I expect the .382 to act as resistance. I believe we will eventually end up hitting the golden zone, which is the space between the .618s and the .65s. It may be a choppy ride until we get there. The described trade setup might have a person in the unrealized red for an extended period of time on entry 1 before bottoming at entry 2.
Based on my traditional indicators, it appears that we could be in for a short-term bounce to the .382. The monthly chart is not the most favorable to the bulls imo and suggests more down or a prolonged sideways chop. If this is a hard bounce from the .5 range we should expect to see a pretty aggressive series of measured moves or fib extensions and will become pretty obvious that the .618 won't be hit and you can ladder out of your position on smaller time frame MMs to even further reduce risk and end up with the holy grail free trade.
This trade may take months to play out but could take years. This is not investment advice. This is a setup I will likely take myself but I am currently holding off until we get through the January FOMC meeting and potential Russian-Ukraine war (which I believe is FUD).
I measured out several FIBs from 0 to the previous few tops and from the March 2020 bottom to the previous few tops. When doing this you can see a very clear pattern of similar FIB groups ie; .382s in a range, .5s in a range, .618s in a range, etc. As you can also clearly see during this large move down, the price is generally stepping down to these fibs after having ranged for several days or weeks.
The space between the .5s and .618s is the typical reversal zone in a measured move. When trading you want to look for reduced risk trades. Long-term traders and investors will want to look at entry 1 as a range to build their first position and entry 2 as a zone to double their entry 1 position. (Another option is now starting DCA or dollar-cost averaging) The profit-taking zone is the -.236 which gives us a range of $79K-85K. With a stop of around $24K we have an excellent reduced risk trade set up that is between 3 to 1 and 4 to 1. IF the stop hits, we are likely going to be going much much further down and we all get rekt.
Currently, we have just entered the .5 fib zone. Based on recent PA, I would expect us to range here for at least a few days if not weeks. If we end up bouncing, I expect the .382 to act as resistance. I believe we will eventually end up hitting the golden zone, which is the space between the .618s and the .65s. It may be a choppy ride until we get there. The described trade setup might have a person in the unrealized red for an extended period of time on entry 1 before bottoming at entry 2.
Based on my traditional indicators, it appears that we could be in for a short-term bounce to the .382. The monthly chart is not the most favorable to the bulls imo and suggests more down or a prolonged sideways chop. If this is a hard bounce from the .5 range we should expect to see a pretty aggressive series of measured moves or fib extensions and will become pretty obvious that the .618 won't be hit and you can ladder out of your position on smaller time frame MMs to even further reduce risk and end up with the holy grail free trade.
This trade may take months to play out but could take years. This is not investment advice. This is a setup I will likely take myself but I am currently holding off until we get through the January FOMC meeting and potential Russian-Ukraine war (which I believe is FUD).
