The broadening formation I showed you in the last 2 days give us a good suggestion of a volatile market where price make new highs and new lows without a clear direction and keep me stay away from the market, which proved to be the best thing to do now. Some guys asked me about my CCI set up. They thought that my CCI set up is good and try to find some â€œsecretâ€ in it. Of course, CCI is a great indicator, simple but powerful. However, it’s not my â€œsecretâ€ or a â€œholy grailâ€. I don’t use CCI to determine the trend, because I believe that is not the function of the CCI (or any indicators). I use it to find potential momentum, breakout/breakdown, rebounds etc. I depend on chart patterns to determine the trend, bullish, bearish or trendless. So I only trust my CCI when it support or confirm my chart patterns. If not, I don’t trust it. The current situation is one good example when I don’t trust my CCI. On daily chart below we can see that CCI is just crossed the 100 line down. The interpretation is that the pair has a big probability to make a bearish momentum to the downside. But, the broadening formation suggests that we have no clear direction yet and the facts in the last 7 weeks support that conclusion. So, right now I don’t trust my CCI. Of course, I am not saying that the pair won’t go south, but when my indicator conflicting with my chart patterns, I prefer to do nothing.Â Keep stay out from the market and good luck.
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