Is the Stock market going to the highs again ?
A couple of months ago, I was already sharing my views in seminars that I was expecting the stock market to correct drastically. After a parabolic rise, prices are not sustainable and it will collapsed, and it did at the end of January 2018. (Have a look at my old post here)
The fall happened (~10% correction) and found support in the form of a Bullish Shark, The S&P bounced nicely to form a lower highs, now unable to reach the same highs.
The Bullish Shark pattern being a prelude to a Bearish 5-0 pattern, we should expect some bearishness to both the S&P and Nasdaq. Both eventually completed a bearish 5-0 pattern. See charts below :
Hence I am expecting more bearishness to come for Stocks. A good trade will be to go short if Nasdaq & S&P can form some Bearish continuous pattern such as a bear flag or a pennant.
The Nikkei 225 could be following the bearishness of its US counterpart. Any break below the rising wedge on the H4 would confirm the bearish move.
Looking at the currency pairs, AUDUSD and EURUSD showed us the risk off (down) situation the last 2 trading days, similar to the fall seen on the stock indices. Potential support at the bullish patterns coming up.
AUDUSD PRZ at around 0.7612 and EURUSD PRZ at around 1.2215. Hope to see a reaction at these levels to go long.
Trade well everyone. Let's monitor these charts closely next week. Cheers