Backtests

When a rising channel breaks down, but prices rise up to tag it from below one last time before dropping further, we call that a backtest.  Traditionally, it has represented a last gasp before a significant drop.

Over the past year or two, it’s often been a head fake. Prices often: (1) continue higher on the underside of the broken channel; or, (2) rejoin the broken channel and continue higher as though nothing ever happened.

I’ve seen several instances the past couple of days in the many charts I watch, raising the question: is this one for real?2016-08-10 ES 60 0615

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