$SOXLB 7-day new low, current price 101.2, previous low 102.33.
After a new low, three common scenarios are:
① It rebounds to the previous low, then gets pushed back down: the decline continues
② It moves sideways near the previous low: consolidation; watch for direction
③ It quickly reclaims and holds above the previous low: a bear trap
It’s currently below the previous low, so first watch to see whether it follows scenario ① or ②.
After a new low, three common scenarios are:
① It rebounds to the previous low, then gets pushed back down: the decline continues
② It moves sideways near the previous low: consolidation; watch for direction
③ It quickly reclaims and holds above the previous low: a bear trap
It’s currently below the previous low, so first watch to see whether it follows scenario ① or ②.