US30 Analysis: 19 Nov 2020
A potentially powerful Price action signal formed and completed on US30:
⁃ Using the 4hr timeframe, price formed and completed a W-formation between 09 and 16 Nov
⁃ Normally after such a W-formation we expect a retracement (to the w-formation neckline of around 29601.74, which, in this case, corresponds to the 38.2 Fib level).
⁃ 18-19 Nov: Price actually reaches the neckline (as expected) and went past it bouncing of 29341.56 (61.8 Fib level).
⁃ This fulfills the price action W-formation: we therefore expect price to start trending back up from here onward at the very least reaching the 2 legs of the W-formation resistance (this Gad already commenced at the time of writing). Traders who use price action would have seen this and potentially taken a small BUY trade to rise price towards the top of the legs.
⁃ When price reaches the top of the W-legs, normal price action pattern dictates it should should react with, and potentially go past, this resistance levels (at the top of the legs). This is where patience is required - wait for the market to make a decision for you.
⁃ If price overshoots the 2 legs it would likely go up further. If price reacts and gets rejected (min twice on 4hr timeframe) at this resistance level, this should give us good set-up for 4-15 strategy
Notice:
- The M-formation on H1 immediately afternoon the W-formation on H4. We expect price to the M-formation neckline of around 29623.8, which if you observe is the same price zone for the previous W-formation neckline. That is confluence to watch for price to reach and decide it wants to go up further to the top W-formation leg or retrace back to the bottom of the M-formation legs.
As at the time of posting price is going down further(start of London session) to take out Stop losses before prince going UP in the expected direction (hopefully)
US500: A similar W-formation is about to complete on H4 TF.
Good luck everyone 👍
⁃ Using the 4hr timeframe, price formed and completed a W-formation between 09 and 16 Nov
⁃ Normally after such a W-formation we expect a retracement (to the w-formation neckline of around 29601.74, which, in this case, corresponds to the 38.2 Fib level).
⁃ 18-19 Nov: Price actually reaches the neckline (as expected) and went past it bouncing of 29341.56 (61.8 Fib level).
⁃ This fulfills the price action W-formation: we therefore expect price to start trending back up from here onward at the very least reaching the 2 legs of the W-formation resistance (this Gad already commenced at the time of writing). Traders who use price action would have seen this and potentially taken a small BUY trade to rise price towards the top of the legs.
⁃ When price reaches the top of the W-legs, normal price action pattern dictates it should should react with, and potentially go past, this resistance levels (at the top of the legs). This is where patience is required - wait for the market to make a decision for you.
⁃ If price overshoots the 2 legs it would likely go up further. If price reacts and gets rejected (min twice on 4hr timeframe) at this resistance level, this should give us good set-up for 4-15 strategy
Notice:
- The M-formation on H1 immediately afternoon the W-formation on H4. We expect price to the M-formation neckline of around 29623.8, which if you observe is the same price zone for the previous W-formation neckline. That is confluence to watch for price to reach and decide it wants to go up further to the top W-formation leg or retrace back to the bottom of the M-formation legs.
As at the time of posting price is going down further(start of London session) to take out Stop losses before prince going UP in the expected direction (hopefully)
US500: A similar W-formation is about to complete on H4 TF.
Good luck everyone 👍
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