Red And Black, the NVT Roulette: why you should care.
NVT is basically "just another way" to estimate the "fairness" of price within a market.
That's a pretty cude indicator, yet it usually gives some valuable early hints.
As you may notice it drew a rather big red "bell" along last few months.
Mind the fact red here basically means "overpriced", or bubble territory.
What's worth mentioning is that a flip of the indicator from red to black on weekly timeframe -usually- anticipates a double digit % correction.
Which ultimately ends spanning from 1 to multiple weeks.
Below a breakdown of the outcome of the overall 13 historical occurrences of such a "flip".
It basically happened once or twice each and every year, from 2017 onwards.
Swing is calculated from the top of the candle signaling the flip to the bottom of the lowest candle afterwards (excluding following flips).
Legend: Year/month: high-to-low swing % - swing down duration
Pretty interesting figures, isn't it ?
Since NVT is still flash red on weekly, but flipped to black already on daily TF (we cannot say if it's temporary) i'd suggest closely monitoring it, from here onwards.
That's a pretty cude indicator, yet it usually gives some valuable early hints.
As you may notice it drew a rather big red "bell" along last few months.
Mind the fact red here basically means "overpriced", or bubble territory.
What's worth mentioning is that a flip of the indicator from red to black on weekly timeframe -usually- anticipates a double digit % correction.
Which ultimately ends spanning from 1 to multiple weeks.
Below a breakdown of the outcome of the overall 13 historical occurrences of such a "flip".
It basically happened once or twice each and every year, from 2017 onwards.
Swing is calculated from the top of the candle signaling the flip to the bottom of the lowest candle afterwards (excluding following flips).
Legend: Year/month: high-to-low swing % - swing down duration
- 2013/04: -69,84% - 2 weeks
- 2013/11: -70,78% - 19 weeks
- 2014/07: -75,92% - 26 weeks
- 2017/12: -70,64% - 28 weeks
- 2018/07: -30,80% - 3 weeks
- 2018/11: -52,29% - 5 weeks
- 2019/05: -18,29% - 1 week
- 2019/07: -36,09% - 13 weeks
- 2019/10: -37,92% - 8 weeks
- 2020/02: -62,62% - 3 weeks
- 2020/08: -16,97% - 2 weeks
- 2021/04: -27,57% - 1 week
- 2021/05: -51,98% - 7 weeks
Pretty interesting figures, isn't it ?
Since NVT is still flash red on weekly, but flipped to black already on daily TF (we cannot say if it's temporary) i'd suggest closely monitoring it, from here onwards.
Comment:
NVT flipped:
Hence from here onwards odds of a flip will theoretically grow.