Posted by timebandit on 22nd of Jan 2022 at 07:22 am
I showed this chart a week or two ago when the 9 ema of $CPCE
was at the horizontal dotted yellow line. I mentioned that the 9
ema has turned down from this level the last year and a half (with
some breakthrough attempts). I also noted, however, that the upper
Bollinger Band was now well above that level, opening up territory
to move up into.
Well, here we are now at that upper band. This usually signals a
bounce in the market, but the band has flared upward. It is not a
very significant obstacle in that configuration. It will take a
bounce in the market and drop in this 9 ema to bring that upper
band back down.
The 9 ema has also gone above the red line signalling a
significant correction. The last time it was above that line was in
May 2020.
That said,if you look left to 2019, you will see that the 9 ema
was above this line and the sky had not fallen. And if you look at
the second snapshot, showing this chart during the years from 2006
through 2009, you will see the 9 ema spent a lot of time above the
first red line, even during initial stages of uptrends. It barely
spent any time below the horizontal dotted yellow line. I suspect
the $CPCE has been distorted artificially lower in recent years due
to QE. Assuming the Fed tapers/drains liquidity as it says it will,
this should normalize. We are not to that point yet, however. And
until we get there, the 9 ema of $CPCE probably needs to be treated
as a more sensitive indicator than in the past.
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I showed this chart a
Posted by timebandit on 22nd of Jan 2022 at 07:22 am
I showed this chart a week or two ago when the 9 ema of $CPCE was at the horizontal dotted yellow line. I mentioned that the 9 ema has turned down from this level the last year and a half (with some breakthrough attempts). I also noted, however, that the upper Bollinger Band was now well above that level, opening up territory to move up into.
Well, here we are now at that upper band. This usually signals a bounce in the market, but the band has flared upward. It is not a very significant obstacle in that configuration. It will take a bounce in the market and drop in this 9 ema to bring that upper band back down.
The 9 ema has also gone above the red line signalling a significant correction. The last time it was above that line was in May 2020.
That said,if you look left to 2019, you will see that the 9 ema was above this line and the sky had not fallen. And if you look at the second snapshot, showing this chart during the years from 2006 through 2009, you will see the 9 ema spent a lot of time above the first red line, even during initial stages of uptrends. It barely spent any time below the horizontal dotted yellow line. I suspect the $CPCE has been distorted artificially lower in recent years due to QE. Assuming the Fed tapers/drains liquidity as it says it will, this should normalize. We are not to that point yet, however. And until we get there, the 9 ema of $CPCE probably needs to be treated as a more sensitive indicator than in the past.