Range-Bound Into The End Of 2019?

Two of our favorite charts for following the US markets are suggesting the markets are range bound headed into the end of 2019. The news may continue to push the price higher as the overall bias has continued to be to the upside. Yet, our Fibonacci predictive modeling system is suggesting the current price trend has begun a “scouting party” type of move which may end in a moderate price correction fairly quickly.

IWM RUSSELL 2K STOCK INDEX CHART

Our Adaptive Fibonacci price modeling system is capable of learning from past price activity and attempts to present key price data and trigger levels that are important for future trending. The GREEN and RED horizontal lines on the right edge of this chart shows where the TRIGGER LEVELS are for the Fibonacci system. The bullish trigger level (GREEN) is 2.5% above the current price levels. The bearish trigger level (RED) is nearly 16% below the current price level. This suggests that price would have to target either of these levels to establish a new price trend, or continue rotating within these levels to setup new minor peaks and valleys in the price – thus creating revised TRIGGER LEVELS.

What we find interesting is the current “scouting party” type of rally that is taking place on the right edge of this chart. This upside price move is above historical resistance (the CYAN LINE) and appears to be an attempt to test the support levels above the $160.50 level.

If the price is successful in establishing support above this level, a new bullish trend may begin. If not, the price will rotate lower and potentially begin a new bearish price trend. Remember, the downside Bearish Trigger level is 16% below the current price – so that the downside move could be quite dramatic.

(Click on image to enlarge)

TRANSPORTATION INDEX WEEKLY CHART

This TRAN Weekly chart highlights a similar range-bound price setup where the bullish and bearish Fibonacci TRIGGER LEVELS are well above/below the current price. The upside Bullish Trigger Level is 4.15% above the current TRAN price level – thus price would have to rally at least 4.5% higher to qualify as a breach of this Bullish Trigger Level and qualify as a potential new bullish trend. The Bearish Trigger Level is near 18.4% below the current price level – thus the price would have to fall 18.5% from current levels to breach this Bearish Trigger Level and to qualify as a new Bearish Trend.

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