S&P 500 – Projection to the SouthLooking at the market's behavior using the orange median line/fork, one can clearly see how the market reacts when it touches one of the lines.
Median lines/forks are not an oracle. They simply project the highest probable path of the price based on a mathematical calculation inherent to the tool.
If you follow the rule set, money management, and risk management, you have a wonderful framework that offers a significant advantage in trading the markets.
Let’s take a look at the current situation:
The orange fork:
– Price closes outside the fork (1)
– Multiple retests of the L-MLH (textbook behavior) (2)
– Break of the 1/4 line, heading toward the 1st warning line (3)
Next movement pattern according to the median line framework:
– Drop to the white centerline (4)
– Retest of the centerline (5)
– 1/4 line (6)
– Lower median line parallel (7) with a possible retest
– Orange centerline of the pendulum fork (8)
Wishing everyone a wonderful start to the week.
