In all cases, short-sellers helped contribute to the upside action with their collective stop-losses that triggered at each new high. The Alternate – yet equally valid – thesis would call for long/bullish trading tactics on an breakout above 1,880 which could set-up a one-way pathway straight to 1,900.
Here’s the hourly chart for additional short-term planning:
I drew horizontal lines from each short-term new high to call your attention to similar recent scenarios.
There was at least a “pop” or impulsive move up after price broke above the prior highs, again triggering both stop-losses from the bears/short-sellers which combined with bulls/buyers putting on new breakout positions or else adding to existing positions.
That’s simply what we’re planning for at the moment – a logical downside price pathway to trigger a sell signal here and under 1,870 (which opens a “dominant thesis” play toward 1,860 then 1,850’s confluence) or an alternate breakout thesis that throws all the divergences out the window and suggests a straight-up impulsive moment toward 1,900.
As traders, we’re not here to predict the future, but to set-up an unbiased, objective game-plan that allows us to adapt in real-time to what actually happens in price – not what logically should happen.
This article is brought to you courtesy of Corey Rosenbloom from Afraid to Trade.