Hi Folks
Yesterday was again eventful.
That second gap was filled absolutely perfectly. But good luck if you had a buying order in at 3.02. It filled on the tiniest of volumes. That hinted to me the smell of a rat.
The Sultans of Swing do love orchestrating movements. So in just 2 days the SP moved down from 3.40 to 3.02, filling 2 gaps on the way. The 38.2% retracement FIB lies just below that 2nd filled gap at 2.98.
I have noticed many times in the past that the Sultans are very fond of that 38.2% FIB (not always but often)
In my charting journeys I have noticed many times that after a strong surge upwards which is followed by very strong downwards, sometimes we get a phenomena that I call a " Flash DCB". My first chart shows one of these that happened to PLS last year.
On the chart you can see 5.41 to 4.53 (in 5 days), then followed by a "Flash DCB" (5 days) from 4.53 to 5.15 reaching up beyond the 61% FIB of the downward A-wave. Then 2 days later down to 4.33.
With other stocks I have traded this bounce successfully (getting out at the 50% FIB mark). With one stock on a huge upward movement and then much later on a smaller but similar surge.
The recent PLS action to me suggests that this is something to watch out for.
By no means am I saying this is going to play out, but it's a chance. My odds of it happening are about the same as throwing a 10 or higher, so about 6/36.
Not a strong chance, but still a chance.
So on my second chart I have the bottom of this downward run and the start of the flash DCB at around the 38.2% retracement FIB at 2.98. It may start at 3.02 the bottom of the gap filling.
If we do indeed get that Flash DCB, it will play out quickly. The 61% FIB is around 3.25 , while the 50% FIB is at around 3.20.
Let's see if my 1/6 chance plays out, but DYOR.
Wasted too much time on this trivial chart stuff, it's race day and there is some serious study still to come.
cheers Lies
(20min delay)