A couple of observations on the bigger picture as I look at the monthly bar: (a) we have stopped 1-timeframing up (b) Oct was an Inside month (c) we broke to the downside out of a 2 month balance - the trend has clearly changed to the downside - so if we continue lower - the next monthly reference becomes the 1342 area.
We have been 1-timeframing down on a Weekly basis for the last several weeks - there is no change until that stops or the market comes into Balance. Notice that price has re-entered the lower Balance between 1313-1369. If we find acceptance here the destination becomes the lower end of this balance. I have also highlighted the 1342 area which is both a weekly and monthly reference.
Wednesday delivered a Trend down day - on average volume. Notice that the POC did not migrate lower as we auctioned lower implying that short term trading money is overly short. My main reference for Thursday is the Spike - the top of the Spike is resistance - notice that the overnight high could not take out the Spike high.
- A price opening and trading above the downward spike would be considered positive since the price probe or spike was rejected leaving a buying tail.
- Opening within a spike shows price acceptance and keeps the break intact;
- Opening and trading below a downward spike reveals that price has not auctioned (probed) low enough to cut off the selling allowing for two-sided trade. The auction is not over.
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