These two candlesticks tell you what you need to know.

1/30/2023

When your indicators fail (and they will), there’s only one thing to pay attention to…

Price action.

These days, it seems antiquated…

Deferring to an 18th century “technology” from Japan? Really?

(source: tenor.com)

Really…

Every indicator is based on data.

And that’s information that has come and gone…

On the other hand, price action is continuous and present.

But let’s look at a chart where the present is approaching the past…

Here’s Block, Inc. (SQ):

We’re going back at a little more than one quarter on the daily chart.

Options activity continues to jump on SQ which comes as no surprise…

The chart has been basing out for months…

PANIC is for people who don’t have the right trading system…

The volatility has been a windfall for us – 293.2%, 161.7%, and 43.6% on SPX in under a week.

Click here for more details.

Now, at this resolution, the chart appears volatile, swinging between the low $50.00’s and mid $80.00’s.

A wide price range for sure, but not when you consider that in August of 2021 SQ was nearly $300.00.

Still, my focus is on two particular candlesticks, both of which are highlighted in red and blue…

…I’ve dragged their price ranges to the right.

Why? We’re approaching the area where it was rejected and sold off.

And the true area of rejection (red box) is a wide one, roughly ~$83.00-$93.20.

However, this was forecasted ahead of time when looking at the level of breakdown (blue box) which rests between $80.00-$85.00.

SQ failed breaking above these levels on Friday, although it’s sitting in the middle of that exact range.

So, what’s the trade?

If it breaks above this level, I’d look for a move to the last points of interest from buyers at the green dotted lines.

These are the closing prices of the days it finished higher prior to the downtrend… $88.85 and $89.70.

From there, a solid area to take profit would be at the open of the bearish candle that signaled to traders that it was time to cut bait, marked by the red dotted line… $90.87.

A pullback looks to be in the works…

Keep moving,

This material is not an offering, recommendation, or a solicitation of an offer to buy or sell the securities mentioned or discussed, and is to be used for informational purposes only. Any performance results discussed herein represent past performance, not a guarantee of future performance, and are not indicative of any specific investment. Due to the timing of information presented, investment performance may be adjusted after the publication of this report. There can be no assurance that the future performance of any specific investment, investment strategy, or product made reference to directly or indirectly in this communication will be profitable, equal any corresponding indicated historical performance levels or be suitable for your portfolio.

These two candlesticks tell you what you need to know.

The volatility has been a windfall for us – 293.2%, 161.7%, and 43.6% on SPX in under a week.

Click here for more details.

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