Last time I wrote about the market going into Neutral and how we’d not really tried down to the 50% Fibs at 3.2336 (Dec 2017 – Jan 2018 move), 3.2233 (2017 move) and the Long MA (currently 3.2212).
Well…we did in Feb! We punched down through all three but only managed consecutive closes under the 50% Fibs. The Long MA held on a closing basis and was even tested as recently as this past Monday and Tuesday (Pipe Bottom) without failing. Though we’ve had some large ranges at the beginning of the month, we’ve calmed down towards the end of Feb as you can see by the narrowing of the MAs. This nicely brings me onto the key feature of the Daily Chart above.
We’ve had the Short, Short/Medium and the Medium MAs all coming together and crossing over simultaneously and then separating away. This would typically be seen as a Bow Tie formation of the MAs. However, this rare Pattern is not ideal.
The order of the MAs coming in and departing is not correct – shortest to longest in and vice versa coming out. Nevertheless, I’m going to ask you to watch this Pattern as typically we have a move in the direction of the MAs expanding outwards in about 15 – 20 working days after crossover…or between the 19th – 26th of March… watch out during that time.
My one concern is the unclear direction of the exiting MAs…I’d typically say it would be Bullish but I’m not certain as yet. With that in mind, I’m maintaining the Neutral bullet point above until the MAs sort themselves out…hopefully by the next time I write.
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