Why did I post these images saying that this was the starting of a leg down?
- The new consolidation level of 1.1849 was crossed over down and since this level printed, price never made it to overbought.
2. Look at that RSI2 sequence of two red numbers and two magenta ones.
This meant 4 hours of heavy selling, which is the move that starts off new a leg down. The previous, 200-pips selling looked like this:
Two red numbers followed by two magentas (end of leg A) – and at the end two red numbers followed by two magentas (end of leg C). The B-s and green verticals had to be ignored in between.
These plots are now part of the RSI2 Basic’s behaviour under embedded overbought conditions.
Furthermore, when I knew that the unemployment numbers were coming out at 13:30 local time, and the 4th number was printing, the danger was ending the sequence. So I was buying.
Yet, the buying aborted the ending sequence so I knew that I had to sell everything off before the hour ended. Since I was already short, I didn’t go short again – but I could have added some, for sure. Others may not have the same indicators, but they are looking at the same clock.
There was also the fact that the Green River gave support two times already – see earlier, so the third time had to be the charm.
If you look back at the last orange image, we have maximum 2 more hours left from the selling, and the clock is about to roll in 2 minutes. I’m looking to see 2 magenta numbers next – two hourly RSI2 HL2 readings below 16. If this hour ends up being up, we’ll get a fresh count, and so the selling shall continue until it manages to fetch itself a symmetrical ending – or bumps its nose into the overdrive line – darn it, it just did!
The first oversold is a buy for a squaring back to the oversold neckline – see the cover level of 1.1765 in brackets.
The second oversold is not a buy until below the projected distance the move generated – currently at 1.1749, and the last consolidation level was at 1.17348
Today you are good till 1.1744 and perhaps change.