I know, people call all kinds of things Support and Resistance.
But there is one thing that matters above all: the Green River Monster.
Here is the systematic destruction of the support: there is one level below the lower line of the River and there is another one 30 pips lower. Velocity took care of the latter one.
MR. MAROON and the GREEN RIVER are part of my LEMA 30 package. So is the 1H LEMA.
As for the MEDIAN, that the 20% single day sell-off started from can be displayed by my 4H Comfort levels.
That’s two different tools for spotting the obstacle.
Now, how can you be prepared for such a move, how could you have seen it coming from a 110% bullish configuration?
Go back to image 1, and see how the buy stops were cleared away below the Green River with the multiple visits.
The add on point was 40 pips below the GREEN RIVER, which was at about 1.1710 at the time. The above image shows the taxi lines, the total discharge of the daily energy could carry the price to, and the two shaded rectangles below are the oversold (20%) and the deeply oversold (10%) comfort levels. Interesting fact that the taxi line was hit at 1.1851 right before the sell off. The white dots are the cycle support level, the yellow dash is a Market Maker support and the blue dash is Market Maker resistance. The light green channel is something the price have been playing catch up with.
How could you have known where to catch a falling knife? I know you did not know and I know you tried.
The yellow zigzag line is the Projected Lines UFO: the initial swing plus 50%. It put the price exactly at the Fund Manager 30% level, or 1.1555.
I know, it went a smidge lower. Price is currently teeter-tottering at the 1H deeply oversold neckline, and it should fall back despite of the UFO white line pointing at the 1.1650 extension.
This is not all of course. So, when the support was broken (the GREEN RIVER monster got exceeded) the to do list was this:
#1: switch to a 1H chart. Display an RSI2 (HL2).
#2: Wait until a Sign of Strength signal shows up (initial buying). Buy the 15-pip undercut below.
#3: Target? RSI2 95 reading plus the cut above. 11 pips was eeked out.
And you thought oscillators were useless things! You just need to know what to look for.
Currently you have a 120% bearish configuration.
What does this mean? This means that you can sell the second fractal up and aim for a lower low. Cover on an undercut of a Low of a candle with a settled, deeply oversold RSI8 (HL2) reading.
Yes, as you can see, there are tie-off prompts – the “1/2” starting lines, and I’m playing them. 1.1509 would be the next downside-projected reading.