Least worst case : Price action finds support after a 6% correction to the upper half of the megaphone structure before continuing uptrend. Most probable outcome. Why? read on..
Somewhere in-between: Price action enters the megaphone pattern for a 23% correction.
On the chart a ‘indecision candle’ is printing where neither buyers nor sellers have control of the market. However once the indecision candle is resolved one can expect a powerful and significant move. But which direction?
One chart very few folks will be looking at is the yearly chart (bottom), each candle here represents 1-year of data. The 2020 candle closed as a dragonfly candle (labeled WOW). This is incredible. It has only happened three times before (purple circles):
1900 – a 40% market correction occurred in the following 3 years.
2020 – A Dragonfly candle is printed. A incredible . If 2021 closes as a green candle it will be the signal of the century. I say that because this is unlike any other printed in the history of the index. The length of the tail is unmatched.
A 40% correction should occur as before, right? Not necessarily. Previously candles followed by a correction had below 20. This time is different, really. >80 suggesting there’s lots of momentum still.
1-year chart. Each candle is 1-year of data.
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