Many of you commented last week that the price action reminded you of Feb ’21 when the market rallied (primarily on short covering) only to reverse by the end of the week forming a distinct bearish weekly reversal. Great observations– while the Feb rally to prices just short of the early Nov ’20 highs, last weeks rally stopped on the declining trend line of resistance (Nov ’19 highs and the Feb ’21 high). The reversal was quite sudden (similar to Feb) and left a bearish reversal.
The failure at the trend line was also confirmed by the failure at two standard deviations over the 20 Week SMA in both the Feb run and last weeks. All of this occurred on gaining volume and open interest- not supportive of large future gains in the immediate future.