ASX200 fails to penetrate - Time to test March lows?After the March lows, price has been retracing as lots of new investors and the government pump ridiculous amounts of money into the markets. The May monthly candle closed today and failed to penetrate the 50% Fibs and the now resistance of the Ascending Channel that has been apparent for the better part of 30 years. What does this exactly mean....?
The long wick to the downside suggests the bears didn't quite think the March prices were low enough while the smaller wick to the upside was the bulls last attempt at taking back the 50% fibs level in order to head back up to test the recent ath. Due to the failure, I think that we head back down to retest the 5500 area, where we could end up making a HL if it holds above 5550. However, if the drop in the market is enough to take out the weak hands of these new investors causing them to panic sell. I think this will send us even lower, additionally, if the government decides to stop feeding the markets this could cause another domino effect similar to the drop in March where over leveraged newbies who may not understand the market are forced to sell and end up driving price down even further to create new lows... Where price will remain and begin to build the base of a slow economic recovery.
Considering all of this is my trade:
Enter Short: 5700
Stop Loss: 5834
TP #1: 5462
TP #2: 5161
TP #3: 4396
