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Hi Rod,
The purpose of the channel is to provide the straight-line convergence
(using a different data domain) of the most recent pricing action since the
peak. If price breaks support or resistance with conviction, Monday or any
other day, it's an indication the "trend" since the peak has changed. This
allows for the definition of a new trend once the pricing action unfolds.
Am I personally going long Monday? No. I don't want to go against the
current identified downtrend. I believe most will agree it's safer to Short
a downtrending market.
As an example of a new trend forming, see the attached charts of Oil
futures. A extremely well defined resistance channel has been penetrated.
A new resistance trend is not readily apparent though a couple could be
presumed. The Support channel appears to be performing quite well.
Regards,
Brian
Disclaimer: This message and charts are neither trading or investing advice.
Trading or investing in futures is extremely risky and the amount of
potential financial loss is not limited to the monies plegded as margin
capital. Consult a broker or financial advisor for trading or investment
advice.
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