Given that the JP Macro Trend script integrates DeMarker and momentum indicators and now includes the OBV data, we can refine the analysis and attempt to outline a more informed probabilistic outcome for the short and longer term.
However, it's important to note that probabilities in market analysis are inherently subjective and can vary widely depending on market conditions and the analyst's interpretation.
Short-Term Analysis (1-4 weeks):
Probability Estimate: If all indicators align and confirm the current trend, one might posit a 65-75% probability of the trend continuing in the short term. In the case of divergences or conflicting signals, the probability might be adjusted down to 50-60%.
Longer-Term Analysis (1-6 months):
However, it's important to note that probabilities in market analysis are inherently subjective and can vary widely depending on market conditions and the analyst's interpretation.
Short-Term Analysis (1-4 weeks):
- Bullish Signals: If the price is trending upward, accompanied by rising OBV and the proprietary momentum indicators are in a bullish configuration, the confidence in a continuation of the uptrend might be relatively high.
- Bearish Signals: If there are any bearish divergences such as price making new highs while momentum indicators and OBV fail to confirm, the probability of a price correction or consolidation might increase.
Probability Estimate: If all indicators align and confirm the current trend, one might posit a 65-75% probability of the trend continuing in the short term. In the case of divergences or conflicting signals, the probability might be adjusted down to 50-60%.
Longer-Term Analysis (1-6 months):
- Bullish Scenario: Should the price maintain above significant moving averages, and the OBV continues to show volume backing up the price increases, one could maintain a bullish outlook. Watch for the momentum indicators to remain in a bullish posture without significant divergences.
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- Bearish Scenario: Should the OBV and momentum indicators start to show sustained divergences with price, or if the price falls below key moving averages, one might adopt a cautious stance with a higher probability of a bearish phase.
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- Probability Estimate: With the confirmation of the trend by OBV and proprietary indicators, one might estimate a 60-70% chance of the prevailing trend continuing. Should divergences become apparent, the probability of trend continuation might drop to around 40-50%.
This is on daily timeframe with a view over the coming month(s) (Short term), and the indicator is reporting high momentum, and as a result I do expert more downside probability.