Let's compare and check, how the rules work in this Russel Chart:
Price missed to reach the "next line". We can expect a pullback farther then from where price came.
If the U-MLH/L-MLH is broken, price is likely to go to the next line, which is the Warning Line
Here Price is at the upper WL1 the upper Extreme = Price is extended, stretched. We can expect at least a pullback, or even a move to another extreme, the Lower-Medianline-Parallel (L-MLH).
Rule Nr. 1
Price moves back to balance, to the Centerline in over 80% of all occurrences.
If price breaks the CL or any other Line of the Pitchfork, then we can expect a Test/Retest.
Here we are with the naked truth, that we can trust the ForkTrading Rules.
If we know that we can lean on hard written rules, we are able to develop a serious trading method out of it. We can research the so beloved "Setups". And we don't have to fear stops anymore too!
What's next with the Russel?
We have the first Test of the Centerline.
As far as I see, there is no major Swing broken, just pierced!
(...remember my Swing/Pivot rules? Watch the stair stepping blue lines below the pivots.
And if you don't know the rules by now, you should go back an learn them if you are already a Free ForkTrading Member (...if not, subscribe below...).
This means, that there ist no confirmation of a turn in trend, even if it seems that the markets are extremely extended up in these price levels here.
Because we can't predict the future, but act on facts, this is what I do:
1. don't let me fool to believe that the trend has turned to the south already. There is no confirmation so fahr, period! (It doesn't mean that it could be the case in the coming days and weeks either, but not now.)
2. If the market lose steam and pulls back a little, I expect a Re-Test of the Centerline.
3. If price moves above the Centerline, then this could be a tell that the Bulls are in control. I would expect another Test of the U-MLH!
So, I sit on my hands and wait until the market is telling me more information.
This is a sneak-peak into the rules and the world of the Pitchforks, and how great they work in step with the ruleset.
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