How To Deal With A Market Turn Around
Yes, it happens.
Markets can surprise any of us and the best of our logic will, eventually, have to fail us at turn around trend points of importance.
When markets change, we must adapt and quickly to the one and the only reality of the markets: Price.
Brent Crude Oil is the latest piece of ‘humble pie’ to digest.
Although all the signs were in place for the usual rally top, the last important indicator, the breaking of Brent Crude’s price below $37.50 (which we noted in our previous post) never occurred.
The 45° support line held price at bay from a steep decline. Now, this same angle line has pushed the support up to the $39 level with this price now acting as our early indicator for a price collapse if price closes below the $39 level.
Price surged upwards past the last two month’s highs indicating further strengthening and buying.
The fact that price couldn’t drop below the 45° angle showed that selling had dried up and that this price pull-back wasn’t of the same nature as the previous ones. At that point of ‘non-confirmation’, one had to accept what was being said by the Markets about the real trend of the market; prices were going higher.
Although, we could still be making a top, price must close below $39 now to confirm that the switch in trend to the downside is significant & real. – George