In this modest journal I intend to post charts of incomplete patterns with several potential outcomes. The following chart of NDX Daily suggests: A triangle could form. A downtrending pennant could form, subsequently a bull flag could form. When one can successfully predict the outcome of a pattern formation in progress great profits can be achieved.
Or, since this is mean-reverting . . . The lines come from the weekly chart. Something else to consider, though this is probably too easy:
I'm not really into predicting like that. I just trade my time frame until it makes sense to go the other way. So I don't know. Right now, I am short. What do you think will form?
Predicting what will form is much easier vs predicting how a complete pattern will proceed. My bet is a triangle attempt will form, meaning, a HL will plot, if that "breaks" then a downtrend channel to complete the missing 4th pivot. Eventually, I expect NDX to make all time highs but even before we breakout I expect to be loaded with profits, so I can escape any breakout games, breakout trading is far from my game. Will they come via Triangle breakout to the upside? Will they come via Bull Flag Pennant breakout ? Will they come via Bull Flag Pennant breakdown and eventually morph into an inverse head and shoulder with the fakedown being a head? I don't know those answers yet, but land ANY of those predictions and you got yourself a killer risk reward trade allowing you to be wrong much more often than right, and make ample rewards.
NQ Futures 24 hours 240min Timeframe Possible Formations - Downtrend Channel - Pennant - If it breaksdown, inverse head and shoulder
I'll point out that price overnight reached and penetrated the "mean" line that I drew in my post above. This has its own implications. But you seem not to have any interest in Auction Market Theory. Sorry to intrude.
NQ Futures 24 hours 240min Timeframe The 4th pivot did not offer exact support in the move down as a lot of games and stop hunts are executed in these key areas. However there is a potential backtest of an old downtrend line that could act as support for a failed breakdown of the formation, should it decide to go down further. Will update as new data plots within the upcoming days.
NQ Futures 24 hours 240min Timeframe Update Pennant Pivot remains support. Possible Formations: Pennant Completion Bull Flag Completion Inverse Head and Shoulder should pennant break down Areas of Interest for next week: Potential Resistance lines in dashed-red Potential Support line in dashed-blue Future Areas to examine in blue