After another volatile week, we’ll look at a pattern forming on the charts that offers clues to the potential direction of the market. We’ll also explore the fractal aspect to this pattern on several time scales.
After a strong post mid-term rally, the market is pausing. Is it recharging or rolling over? We’ll look for clues on the charts as to the path price might take.
Last week we saw to significant drops in the market driven by algorithms after we dropped below key technical levels. Algorithms using technical analysis drive most of the short term trading volume in the markets now, but they don’t do well at identifying when human sentiment will turn. Everyday market participants tell themselves stories to explain the past and their future expectations. This week we’ll look at how these stories create changes in sentiment to answer the question did we just scare up a rally and more important will it last.