After an almost straight-line growth of the stock market, we have finally had a correction.
What strikes me is that the correction has occurred precisely in the weekly resistance that we shared last week, which , added to some signs in the cryptocurrencies that we will review today, calls for caution on the short term (1-3 weeks)
Remember that it is not about guessing where prices will go but about reacting to the signals that appear, remove fear and managing risk accordingly.
Regarding our indicators, this week we have updated our Trend Rider Algo #1, adding levels to the "BEAR" signals (light Bear, Bear, Strong Bear), if you can't see it yet you just have to remove the indicator, refresh the browser and add it again.
In the weekly chart we can see how Nasdaq is fighting with the trend line and at the same time trying to get above the Rider Band.
As we said before, while this is happening cryptocurrencies had an early correction, preparing for this moment of truth.
Bullish scenario: We need or 2 candles above band. When that happens we could start adding medium-term positions again with less risk.
Bearish scenario: 1 or 2 candles below Rider Band. If this happens prioritize shorts and wait for bounce signals on daily chart for longs.
Meanwhile, as long as Nasdaq is inside Rider Band we can try longs with tight SL on stocks.
Similar to Nasdaq, it had a (slightly slower) recovery and correction last week. The big difference is that Bitcoin hasn't hit the Rider Band yet on the Weekly Chart.
In my opinion, what happens next will depend entirely on the traditional market, if nasdaq manages to position itself above the band Bitcoin will grow rapidly so I continue to bet on positions to the upside but with a tight stop loss.
However, we have a bearish "M" warning signal pending confirmation on the weekly chart, so it is very important to follow up and see if it confirms this Sunday, if that happens we can see a correction of BTC to 17K with higher probabilities.
On the daily chart, We can see how bitcoin is right now in a support zone in addition to having a probable bounce signal active. As long as Bitcoin is in this zone we can try long trades with a tight stop loss on lower timeframes, just make sure to follow the process.
Ideally we want to see a bullish momentum signal next today or tomorrow (orange "M" above bar) to complete our famous Probable Bounce + M signal combination.