Point and Figure
We have confirmed a column of 10 O's. That leaves yesterday's long pole of 29 X's unresolved. A 50% retrace of that long pole would put us below $3,762. We are still in the range between 3,240 to 4,454.
Here are the recent long pole of O's, from the big wedge breaking down, which have not resolved 50%: 10/31/2018: 23 O's, resolves if price moves above $6,901. 11/15/2018: 19 O's, resolves if price moves above $5,885. 11/20/2018: 29 O's, resolves if price moves above $4,920. It could be a while before we see all 3 resolved, but I would be cautious shorting until at least the third is resolved with a price move above $4,920.
In my last post, I pointed out a break of a steep upward channel, I pointed out we were in a fairly large long pole (over-extended upward), and at the top of our PNF range. I recommended short hedging the confirmed break down of the 2-hour timeframe channel with a target of 3,875. We will reassess that target below.
Following break from upward channel, touchdown on parallel trendline has occured
Although it wicked to 3,902 and into my green box on the chart, we've missed my conservative target for the break down from channel of 3,875. Really impossible to tell if we will get some more downside here (mean reversion) or if we will continue up. In normal circumstances I lean towards 62% mean reversion but right now higher timeframe (3-day) still looks very bullish coming off of bull div on the 3-day RSI with no signs of bullish momentum slowing. So this could be all the relief bears get.
TLDR, continue holding your long on the 3-day timeframe. If you shorted the 2-hour timeframe you'll need to decide to close around here at a small gain or to hold it and see if we move down to the lower area of support at 3,650 (this is stronger support area where we have a throwback, 62% fib, and bottom of the volume profile node). I don't think there is a right or a wrong answer, but I lean towards closing the short here.