We left off yesterday in Bear Zone 1 with a Red Tail and a new lower low finishing off the Primary wave structure.
Now the Bulls have done exactly diddly squat with their 9 hours, so we can call Time Up on them and look to ride the Secondary wave structure lower.
The volatility whip that came out of the lower low should had provided the base for a Wave 1 up. It didn’t. The second high expanded the range a bit, but by less than 5 pips, so it is a failure. 9-10 pips would had been a break out.
There is an abyss below, and it is the path of least resistance, so what is the holdup?
The problem is that there is no root. You would need to see a continuation divergence for the kick start of the next wave structure down.
You would ideally want to see a rally falling shy of the marked high whilst RSI2 becoming more overbought and falling shy of the descending Mr. Maroon if possible. Right around the thick green Lower Guard Rail.
In conclusion I would be scaling into shorts from 1.1028 and stop shorting before 1.1031 and would feel utterly dumb if the Market Makers let this rally slide through Mr. Maroon and throw all passengers off board.
If for some reason there would be a lower low first, fade that (refer to the support levels), and add to your shorts upon breaking the low if the perceived higher high (the short entry) would get printed.
The ultimate target would be the 3x stretch limit, the purple haze, from where a Mean reversion would be likely.