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Hi there!
Question on Slide 20 in video 21D. Al is talking about MTR setups, and points to the following entry (green box):
I added the red line, which is a pretty obvious bear trend line to me. Why would he suggest taking a swing buy there? It seems to me that would be taking a trade against the clear bear trend, and we would want to wait until a break above (my) red line to confirm strength. Am I misreading this somehow?
Thank you!
When the market accelerates downside in a bear trend, it can be seen by the bears as an exhaustion move , attracting profit taking from them, especially if it had reached an important support area. You can see that from the green leg. After that the market can test the previous low. And the test could create either a Higher Low(if the buying pressure is high) or Lower Low. In this case as soon as the market dipped below it stalled, possibly signalling that bears were not interested in selling anymore. The entire picture could be see a bull flag: double bottom after a failed breakout below a bear channel.
Got it, thanks Fred! So you're seeing that red section as an exhaustive mood, implying that the bears are tuckered out and we're likely ready to at least move into a TR. That makes sense to me, I appreciate the insight!
Hi Drew, I think, taking trade after break of trendline you drew is equally good, one can enter on higher low MTR/higher low after DB.
