History Repeating Itself, Part I

18. November 2008
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There was some price action that seems to be repeating itself, but each time looking more “compressed” in time and size. Referencing the lettered arrows in the picture: 

  • Arrow A:  A down move to the 825 level, then the next day a huge rally that wipes out the previous few days fall. Then a few day rally before another fall.
  • Arrow B:  If we compress the action from Arrow “A”, we move down to 825 once again, and within that same day (instead of the next day), a huge rally that wipes out the day’s down move. Then, no rally afterwards (like “A” had), but instead immediately down the next day.
  • Arrow C:  Today’s action. If we compress this action even more, we hit the 865 high sweet spot, go down to this 825 area and then another huge rally that wipes out the day’s fall. This time, a smaller bar than Arrow “B” and less time between B and C, than from A to B. 

 

Could this mean that each test of 825 provided a bounce, but each time, the bounce is getting smaller and smaller, thus we could see a downday tomorrow that finally breaks this 825 level? If we compress this action once again, all we are left with is just one thing... DOWN!

 

Lesson

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