THE BIG PICTURE: First thing to notice is that point C is right around a 50% fib level of segment AB. While the highs at point A had a clear cut head and shoulders reversal, recent highs have yet to provide a definitive reversal formation around point C despite developing distribution. The average percentage change of the retracements for segment BC was around 6% and the total move lasted about 38 bars. The time duration resembles a move from 1995-1998. Considering the average retracement of segment BC a down move of 8% would provide another indication of a trend change.
THE TECHNICAL STANDPOINT: Confluence at point C is providing a level of resistance from which risk can be defined. A break and hold below 170 will trigger a long term sell signal that targets a move toward point D as long as the trend line and fib level hold. Switching to the lower time frames for short setups while ignoring long setups puts the trade execution in line with this idea. Movement above and beyond point C will invalidate the bias and risk will be limited.
THE TECHNICAL STANDPOINT: Confluence at point C is providing a level of resistance from which risk can be defined. A break and hold below 170 will trigger a long term sell signal that targets a move toward point D as long as the trend line and fib level hold. Switching to the lower time frames for short setups while ignoring long setups puts the trade execution in line with this idea. Movement above and beyond point C will invalidate the bias and risk will be limited.
