Downloading...
Download

Bearishmomentum

BTCUSD: Triple Bottom But Facing Bearish Momentum.BTCUSD update: Triangle and minor support broken as bearish momentum carries this market to retest the 11600 low. Price is now hesitating at what could develop into a triple bottom support. Buying now is still attractive for longer time horizon positions. In my previous BTC report, I highlighted the lower high and what possibilities it implied. The market chose the bearish scenario which now offers more attractive prices for longer term investing. Like I have explained previously, buying fractional positions on lows does not require precision, only the acceptance of the risk. The 10988 to 8656 area is the .618 of the broader bullish structure that I have written about previously. A retest of this zone may be fast since it now offers a reversal zone extension boundary of 9683. I am not a fan of placing and leaving limit orders in the market because of the random nature of such a tactic, but this price area offers one of those rare exceptions. As long as you have a defined investment size, and you are fractionally building a position, leaving a limit order below the market allows you to capture prices that may only be available for a very limited time. The fractional size is what keeps your risk under control, and not a stop order since there is no reference structure at the moment. The most important thing to keep in mind is this: you must be able to accept the possibility that price can go much lower than expected. Bottom picking is random, and is not in our control, but the amount of risk that we take is. The averaging technique is for longer time horizons, and a positive long term outlook on your part. This same tactic can lead to wiping out your account if done on margin or irresponsibly. So, on that note, I have placed a limit order to buy a fractional amount at 13150 (Coinbase). It is long term. No stop or target. (You must make your own adjustments based on which ever exchange you use.) What about the triple bottom at the 11600 area? Price is attempting to reject the support, BUT there is no relevant confirmation of a price reversal. The only attractive factor in this situation is that price has dramatically rejected this area twice before. Again buying into a small increment does not require precision, but if you are looking for a short term trade, waiting for the close of a reversal candle such as a pin bar or inside bar at least offers price stability. Don't forget there is significant short term bearish structure in place that can still lead to lower prices. The lower high at 16350, the lower high at the 15131 and the 13520 resistance level which is now the .382 of the current bearish structure measured from the 16350 high. If price is going to recover, a break of the 13520 level will be the first relevant sign to look for. Buying below this price is not a bad idea for an investment rather than a trade, but lower prices are likely until this change in momentum materializes. (10700 or lower is realistic). In summary, there is no question this market is now in a more attractive price area when it comes to a longer term investment horizon. The market is a harsh teacher. 6 weeks of constant new highs reinforces bad habits and extremely warped expectations, especially from newer participants who have no reference point for what a realistic market is. Now is when the herd of buyers from 18K who expected 30K get shaken out and donate to the traders who have a stronger understanding of financial markets. It's not "different" this time. Euphoric markets are especially driven by the same factors every time: Greed and fear. Those who were not sucked into the euphoria can now capitalize on the fear. Buying a low doesn't guarantee you are buying the bottom because bearish momentum can take prices even lower. Having a process for managing risk and making decisions based on the market's intent is what will facilitate long term trading and investment success. Not "gut" instinct. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
43
BTCUSD: Triangle Confirmed. Which Way To Break?BTCUSD update: Lower high established at 15131 which sets up this market for a possible retest of the 12ks or maybe even lower. It also confirms a broader triangle formation. Lower highs often lead to lower lows. It is not a guarantee, but an increased possibility. The 14400 resistance level continues to be tested, but there is a bearish outside bar that has been established which is a notable sign of weakness. If price continues to follow the bearish scenario, the 11600 and 10700 levels are the nearest reference points that would serve as reasonable targets at least for a retest. What stands in the way is the 13269 to 12581 support zone which is the .618 of the previous bullish swing. It is possible (but less likely) that price can produce a failed low (double bottom variation) within this zone. There is initial buying in this area off of the 13145 level. What makes this scenario less likely is the fact that price is coming from a lower high, but none the less, it doesn't hurt to be aware of the possibility of a momentum reversal in this area. IF the market chooses to unfold this way, it can negate the current short term bearish momentum that appears to be taking hold. Also any push beyond the 15131 high will also cancel out the current bearish momentum as well. Just something to be aware of. The development of the current lower high also confirms a broader price consolidation or triangle. A bullish breakout (which would coincide with the 15131 break) would also negate the lower high formation. The worst place to enter a market is in the middle of a triangle because this is where price action is the most random. If the bullish trend is going to reassert itself, waiting for the triangle breakout out would at least signal further bullish momentum and a reference point to measure risk from. So how is this information useful? We are simply examining possibilities. There is no precision in any financial market. The purpose of having a perspective is to select and highlight the more probable scenarios out of infinite possibilities (reducing randomness). This is why TA is so effective on the shorter time horizons. It also helps us capitalize on the natural "gut instinct" decisions of the herd. In summary, ANYTHING can happen. Expecting absolutes in a financial market is how you set yourself up to donate to the participants who anticipate probabilities and adjust with the order flow. In terms of my plan, I am looking for a good price to buy and this information helps me recognize not only when the reward/risk is most/least attractive, but also when other factors like momentum are in my favor. At the moment, price structure and momentum do not fit my criteria, even for a smaller long term position. The market needs to show its hand, and for me, that means either a retest of the 12K area or below, or a breakout beyond 15131. Those are the events I am waiting for before I can take any other action. Use this information within the confines of YOUR trading plan. If you don't have one, then you really should avoid these markets all together until you organize some kind of decision making process. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
55
BTCUSD: Break Of 14400 Can Lead To 16350 Resistance Retest.BTCUSD update: The 16350 resistance zone stays intact while price retests 13145 which is within a minor support zone. Is this a good retrace to buy? Let's consider the scenarios. First, price has held the 13269 to 12581 support zone which is the .618 area relative to the recent bullish swing. At the moment price action is consolidating just above which can unfold in two formations that are worth considering. When I refer to consolidation I am referring to an inside bar formation, or a series of dojis. In the current configuration, price may be forming a mini symmetrical triangle if the current candle closes the way it looks at the time of this writing. Triangles are continuation patterns and the appearance of one in this position is likely to lead to a continuation of the bearish momentum which can take prices into the minor support area below, or even through it. This scenario could see price retesting the 11600 low for a potential triple bottom formation. I would rather look to buy there than here. The appearance of a small bear flag can also unfold here which is more likely to lead to lower prices rather than higher. These bearish scenarios are contingent on the 14400 minor resistance level staying intact (.382 of current bearish swing). The signal that price is more likely on its way back toward the 16350 to 17876 area is a decisive break above the 14400 level meaning price needs to close above the level and on the high of the period. So in terms of taking a position, this level is a tough call because there is no clear signal or formation calling for a long, but price is fluctuating between a minor support area and resistance level. This is where your risk tolerance and trading plan have to come together to make the trading decision. From the perspective of my trading plan, the reward/risk is attractive since the 13145 low can be used as a reference point, compared to the nearest target which is the 16350 area. The problem is reward/risk is not the only factor that goes into a trade decision. My plan requires some form of confirmation which is missing at the moment and does not offer any special bias in my favor. From the investor perspective, this is a swing low which simply offers a better opportunity than buying at a swing high. If sized appropriately (according to your plan) you won't be seriously affected IF price decides to test the 10K level or lower. That just becomes another buying opportunity. Precision is not required for this method because you are using position sizing without margin to average in. As long as you believe in the long term viability of this coin, and are willing to lose your investment, then this strategy is the less complicated of the two. Keep in mind if you are using another exchange like Coinbase or any other where price is not the same, you have to translate the prices from this chart to your own chart. The formations will be the same, even if the prices are not. In summary, I laid out the details of what to consider while price is fluctuating within an attractive reward/risk area without momentum confirmation. Risk/reward is not the only factor that goes into making a swing trade decision according to MY plan and is why I will not take a swing trade long here. Based on the momentum, I think price can retest lower levels and I am willing to wait for that possibility before taking a longer term position. Again YOU must decide what you are comfortable with, I cannot make that decision for you. If you are depending on the analysis of other people for outright buy and sell decisions, in the long run you will be subject to a random outcome. You might as well flip a coin. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
11
LTCUSD: Head And Shoulders Is Not That Bearish?LTCUSD update: The price action is similar to the other major markets. They are all unfolding into a head and shoulders like formation on a broad time frame. These formations are tricky when they appear within the context of a generally strong market. In this report I will explain the scenarios that would be most attractive for my trading plan. Many who are less experienced at TA do not realize that it is the context that carries more weight than anything else. Context is a combination of broad factors that will likely assert a bias over time, and since it is not explicitly measurable, it is often not considered when facing something like a head and shoulders formation. The context of this market, just like the other major coins, is bullish and has been the entire time. This does not mean it is immune to short term corrections, but it does mean the corrections can be considered buying opportunities when they become relatively extreme. Extreme moves are extreme because they push too far, too fast and do not happen often. The recent extreme was the sell off to the 150 low. The 181 to 138 zone happens to be the .618 area relevant to the broad bullish structure measured from the sub 100 lows. I do not expect price to push that far, even in the face of the head and shoulders that is unfolding at the moment. IF it happens to offer that opportunity, I would certainly be looking to buy in that zone as an investment. The more likely scenario is a retest of the high 190s and low 200s. This is the .618 of the recent bullish swing that has peaked around the 285 area. This minor support happens to overlap the broader support zone that is just below as you can see on the chart. This area would also offer swing trade as well as longer term investment opportunities in my opinion. It is just a matter of waiting for some form of confirmation to appear such as a double bottom or higher low around the specified levels. At the moment, price is not only sitting near a previous peak, but also just below the 285 to 321 resistance zone which is the .618 of the recent bearish swing. Failing here will complete a second right shoulder of the head and shoulders formation which is likely to lead prices to one of the lower support levels. Why invest or buy now when lower prices are likely to follow? A common mistake that people make is they see the head and shoulders as a trend reversal. This is where context carries more weight like I was explaining earlier. As long as the 150 low is not taken out, the broader trend is bullish which makes formations like this one a buying opportunity at predetermined levels. Don't be distracted by the immediate formation and pay more attention to the broader view, especially when looking to hold for a longer time horizon. Other things that I notice that continue to throw people off are all the rumors and news swirling around these coins. When it comes to that information, just remember this: If you did not PAY for the information, or you do not know the source personally, it is likely not going to provide much value in terms of managing a position or portfolio. TA will offer much more valuable information if you learn how to use it properly. In summary, there is a head and shoulders forming on the larger time frames, but that does not mean this market is going back to dramatically lower levels. As long as these markets are not replaced by another technology, the broader bullish context will limit how low a bearish formation like this can go. I view this potential short term bearish scenario as a buying opportunity and will be watching any retest of the support areas below 200 for investment opportunities. This market so far does not offer the same frequency of short term opportunities compared to BTC or ETH, which makes it a good one to buy and hold in my opinion even when the more realistic trading environment returns. Comments and questions welcome.
BITFINEX:LTCUSD
by MarcPMarkets
17
BTCUSD: Back to 10K Before 20K? Watching For Double Bottom.BTCUSD update: In an attempt to reverse higher, price pulls back into the 11600 low while falling from 14200 resistance level. Is price going to retest the 17K area resistance again any time soon? At the moment, price is fluctuating just above the 12310 to 11620 minor support zone which is relative to the .618 of the recent bullish swing measured from the 10700 low. This is a convenient area for price to present a higher low formation. This is also where the criteria of your trading plan must be considered before taking action. Risk is defined by the 11600 and 10700 lows respectively. Managing a swing trade in such an environment is tougher than building a position trade in my opinion, but your choices should be determined by your outlook and your plan. Buying upon a bullish break of 13200 while placing a stop at 11600 is not a very attractive choice, even if the upside potential is greater (at least for me). Keep in mind, the decline from the 20k high may still be in progress. There is actually a .618 support zone that ranges from 8656 to 4953 which is measured from the 560 lows. It is hard to imagine, but it is within reason for price to retest this area before stabilizing and building a renewed bullish effort. Another thing to consider is this: market conditions dictate what strategy would be more effective in ways that are reasonable in terms of risk. Part of being a skilled investor or trader is recognizing and adjusting to the environment in order to keep risk within the range of your tolerance level. For me this means adjusting and managing trade size to control risk. If I have to risk 1K+ points on a swing trade as is the case with this market, I am not going to take a full position upon initial entry. Instead, I can begin with a fraction such as 25% or 10% of the initial position and add to it or subtract from it as the market cooperates or not. This flexibility is what allows you to average into a position and keep risk under control without having to use a hard stop right off the bat (stops are not the only way to control risk). As price cooperates, you can add to your position and manage it from an average price. What I am describing is more of a position trade style, but the wide fluctuations in this market call for that adjustment until intraday ranges consolidate in my opinion. It is the fractional sizing without any margin that makes this strategy effective since it reduces the focus on price precision. If you apply this with margin, you are asking to wipe out your account. If this whole concept is confusing, then do not attempt it at all. Trade markets that are more tame. At this point, IF price can stabilize, it is more likely to consolidate before running to new highs. The first sign would be a failed low around the 10700 followed by a subsequent higher low and then new bullish break of the 14200 level. If managing a trade within this area, the target expectation is still the 16350 to 17900 area for the short term. These scenarios and levels provide reference points for you to determine how much risk you are comfortable taking in terms of a reasonable reward. In summary, I am looking to initiate a position trade around the 10700 lows and add upon any extreme price spike. I do not know if price will make it that far, but if it can, I am willing to start small for a long term trade with the intention to sell some at the predetermined targets that are in place now. As I have been writing about, markets that go up in vertical lines are extremely risky and unrealistic. This deep correction is perfectly normal and offers opportunity for those who have the ability to think beyond the hype and the herd mentality. Now is the time to be considering positions and investments, not at 20K. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
26
BTCUSD: 50% Correction? Good Time To Think Long.BTCUSD update: From 19830 to 10700 in two days, basically a 50% retrace. Instead of worrying about why, my focus is evaluating where and when to buy. The market is a harsh teacher. People who jumped in near the highs expecting this market to go to 30K are now learning about risk. All the coins are retracing 20%+ in a matter of hours. The good news is this type of retrace is normal and healthy and offers opportunity for those who are patiently waiting for a RELATIVELY lower risk area to begin trading or investing. The short term news or reasons behind this are irrelevant while TA will guide more effective timing during extreme price moves. In terms of TA, the 14450 support (.382 of recent bullish structure) was cleared without any hesitation. This is why waiting for reversal patterns is so important when it comes to timing and managing risk for swing trades. The 10700 low is the upper boundary of the .618 support zone that expands as low as the 8650 area. As you can see, price has bounced significantly off this area and is presenting a bullish pin bar at the moment. The question is: when do you buy? This is where your plan comes in. You must first decide what type of trade you are comfortable taking. If you are looking to add to an investment, that is much different than timing for a swing trade. Buying for the long term is not a bad idea nearer the lows. If you are buying while there is no structure in place, price can easily retrace into the 9 or 8K range. Building a position in small increments is more appropriate in the 10700 to 8500 area compared to much higher prices. If you are buying to invest, there is no precision. Managing risk is more of a function of position size relative to what you can afford. If price happens to go to 5K (less likely, BUT it can anything can happen), you have to be OK with that. RISK is high in these markets, and if you can't handle losing everything that you put in, then you should not invest. Embracing the potential loss is what will help you become immune to the fear during extreme moves. The same fear that pushes the less experienced out of their longs. (Do NOT do this type of investing with margin. If you do not understand why, you need to do some homework). Averaging into a market during extreme retraces is better than buying highs, BUT is NOT safe either, if you seek safety, you are in the wrong market. This is for the aggressive investor. As far as timing short term trades (swing trading), waiting for a retest of the low offers the best reward/risk relative to the nearest targets. Compared to averaging in, this method offers defined targets and stops. For this strategy, I would wait for a double bottom or failed low near the 10950 to 8650 zone and use the low of that structure to define the risk for the trade. Waiting for the structure on a smaller time frame (4 Hour, 1 Hour) offers more stability than randomly buying any low. As far as potential targets, the 14200 level (.382 of bearish swing) and the 16350 to 17900 area (.618 zone of bearish swing) offer areas that are proportionate to the current correction and provide realistic profit targets to measure reward from. As long as price stays below the 14200 resistance, it is more likely to retest lows rather than highs. As far as an immediate recovery that new participants have grown accustomed to, I would say the more likely scenario is for the market to go into a broader consolidation after such a retrace which can take a week or two to play out. In summary, maybe now some people have learned why locking in some profits and reducing risk on highs is so important. A 50% cut in two days is extreme and offers a long term buying opportunity for aggressive investors who know how to embrace loss. Otherwise, getting back in for short term moves still requires waiting since there are no reversal structures in place yet. Your plan is what should guide your decision making, not your feelings. Comments and question welcome.
BITFINEX:BTCUSD
by MarcPMarkets
44
BAT BEAR & CYPHER BEAR |H1| SHORTCOINBASE:ETHUSD presents two bearish harmonic patterns in this generally bearish crypto saga :) Fundamentals and Technicals appear to be in conflict in the crypto world hence making it hard for anyone to accurately predict the direction of any crypto market. These are certainly very risky markets and of course just like any other market, there are no absolute entry and exit points, so I will simply follow my harmonic patterns with calculated risk and instincts :) If you choose to indulge, good luck
BITFINEX:ETHUSDShort
by UnknownUnicorn1118164
2
BTCUSD Is The Top In Place?BTCUSD update: A move off the 17171 all time high to 13010 in two days. 5K move in two days is a demonstration of how much risk is involved when buying into this market at such levels. What is even more amazing is this retrace is within proportion of the current price action. In other words, this market is not bearish YET. The nearest relevant support measured from the 5400 low is 12751 which is the .382 of the recent bullish structure. The 5K pullback just missed that level by about 400 points and is now showing a long wick on the current candle. This kind of price action is perfect for day trading long and short for those who have access to reasonable spreads and can short. The futures market should provide that flexibility for the rest of us. Is this market finally going to sell off like everyone keeps saying? The answer is: it is too early to tell. The bearish price action that has appeared may seem dramatic, but it is within the proportion to the way this market is moving and has not even broken the first projected level of 13010. That is why I keep saying this market is for day traders because you take your profit based on targets on smaller time frames. There are two levels to watch for as the market unfolds. The 13010 for a double bottom reversal which can lead to a long signal, and the 15580 to 16273 area (.618 of recent bearish swing) which can lead to a lower high and signal a sell off that can retest the 13k level or lower. There is no question that the market is generally strong, and that means there is a greater chance that the support level holds while the resistance level breaks. I am not buying into this market at all. I prefer to wait for the futures to open tomorrow and next week and see how price action is affected before I take any position in this market. I am more interested in trading the futures than I am of the actual coin because of the flexibility. I am still a firm believer that the futures will bring balance to this market rather than dramatic new highs. As far as shorts go, the current leg is the first sign of weakness. Weakness means there are more sellers than buyers within the current price action and is not to be confused with a trend reversal which takes a lot more time to develop. This is why shorting is more effective on shorter time frame strategies like day trading which are characterized by tighter stops AND targets. The less time you are in this market as a short, the better. If you are looking for shorts, wait for a reversal at the projected resistance level, that is where the reward/risk is the most attractive. And again, if you do not have a well defined plan then you should not trade at all. A more serious correction can take this market back below the 8ks but there is NO structure in place that implies that YET. Remember TA offers clues in regard to what is likely to happen in the immediate future. The more time that is measured takes away from the reliability of the analysis because anything can happen. A piece of news can come out that takes the market by surprise which a chart cannot foresee. Often the market is in a position that news will push in a particular direction faster, so TA may not offer precision, but at least it provides a way to measure the risk and potential. In summary, it will be interesting to see how the behavior of this market changes along side of the upcoming futures markets. There are many opinions but no one knows for sure, not even the people who are responsible for creating the futures contracts for the exchanges. This first leg of selling is normal and is still within the recent bullish structure. If this market is going to correct further, it is more likely to begin that process from a lower high, a double top or a double top variation which can start from a slightly higher high. Emotions are running rampant in this market, do not let yours control you, even a simple plan is better than nothing at all. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
37
ETHUSD Falling Apart Or Buying Opportunity?ETHUSD update: After retesting the .618 resistance zone, this market has broken the 450 support area and is now sitting within a support zone. The big question is: Is this a good time to buy? My first impression of this price action is investors are selling their ETH to buy more BTC because of it's relentless new highs in anticipation of the futures contract starting on Sunday. Markets like BTC are extremely rare, and are great if you are in, but the futures are going to bring it back to reality. I believe the futures are going to attract a lot of volume away from the current exchanges because of their security, flexibility and credibility (something current exchanges are missing). This market is behaving more in line with reality. In reality, prices correct to some degree. And at the moment, this price is sitting within the .618 support zone of the recent bullish swing that failed to make a new high. Aren't support zones a place to buy? They are, except when momentum is bearish which is the case here. In support zones like this, I prefer to see a chart pattern reversal before getting long. On the current time frame or even smaller. Or I would like to see a candle stick reversal off of a retested level like a double bottom.It is not happening here. Just like there are no confirmation for shorts in BTC, there are no confirmations to go long in ETH for a swing trade at the moment. Since the momentum is still bearish, I am expecting price to retest the 385 low, and possibly the bullish reversal zone somewhere above 361. These are the levels where I will be watching for reversal formations to go long for swing trade in anticipation of a retest of the 470 to 488 resistance zone (.618 of previous bearish swing). IF price decides to reverse sooner without a formation then a bullish break of the 435 resistance (.382 of recent bearish swing) is the signal I will need to see. At that point I can look for a shallow retrace, or some other signal to start buying. Confirmation is key, because what happened at 455 can happen again. This is what I am expecting BTC to behave more like once balance returns (and the majority of U.S. investors and traders will be able to short). In summary, buying a pull back in a broader bullish trend is in line with my trading plan, BUT some form of confirmation is required. This process helps to filter out many false starts or buying too early. It is no different from shorting BTC right now which I have been warning against because there are no signs at all. Do you want to see what a market that is setting up for a sell off looks like? The two week double top formation in this market is a prime example. Relative to the current formation, any price action below 385 will be extreme and offer the best reward/risk, just wait for a reversal formation. Usually before the market starts working its way back up, it will show a pattern on a smaller time frame (look at the long tails at the 400 and 385 low that were tested a week ago). When it comes to TA and these markets, there is a huge amount of ignorance which will serve as an advantage as these markets return to reality. Remember TA is most effective for evaluating momentum and reward/risk on smaller time horizons. People who can put this into perspective and recognize its limitations are the ones who have a better chance at achieving consistency. Normalcy does not imply a bear market, just one that does not go up in a straight line. The BTC situation is breeding unrealistic expectations and reinforcing bad habits which will be the mechanisms that offer the more experienced traders opportunities when these markets regain some normalcy. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
41
ETHUSD Perspective And Levels: Lower High Within Triangle?ETHUSD update: This market is in a wide consolidation within a bullish trend which often means prices are poised to go higher, but upon further evaluation there is a lower high in place which is not a bullish sign. I realize no one wants to hear about a mixed market, but I have no choice but to write what I see. Just a quick reminder, I chose to write about my swing trade strategy for these markets. I chose it because it allows me to write realistic and timely analysis that offers perspective. It is not the only strategy or market I trade, but it is the only one that I write about. On top of that, I am very selective with the trade calls. If you are looking for trades and action, there are many other analysts in this community that you can refer to. My analysis provides "perspective and levels" that you can use to make your own judgements on. As far as this market goes, it is in a wide consolidation, while at the same time failing to break beyond the .618 resistance zone that is relative to the most recent bearish swing. On top of that, there is an outside bar (482.70 to 431) which establishes a lower high formation within the resistance zone. These are bearish signs while the overall triangle itself tends to be a trend continuation pattern which is bullish. So which carries more weight? The triangle because the structure is larger in terms of time and is in line with the trend. For a swing trade, buying the breakout is tricky. Why? Because buying into this breakout is buying right into a minor resistance, rather than a reversal formation near a support. A break beyond the previous high of 482.70 will trigger a long signal, but the nearest reasonable target is the 500 to 510 area which is a potential 30 points while the risk is at least 35 to 40 points (446 area which is the .382 of the recent bullish swing). The reward/risk can be adjusted to about 1:1 with some stop adjustment, but for me, the trade entry criteria is not present. I am not going to force a trade, but if you are okay with the risk, and are monitoring this market frequently, then it can be a worthwhile break out. For me to get long at this point, I would rather see price retest the 445 area for a double bottom or failed low formation on a smaller time frame. The reward/risk is much more attractive, and a higher probability for price to follow through. So that is my plan. If price happens to break the 445 and 400 levels, then the 345 extension target (see previous ETH report) may still be in play. Remember, these markets sell fast and shake out weak hands quickly. That scenario will negate the bullish triangle that is present at the moment. In summary, I get many questions about how this market will be affected by the introduction of BTC futures. My initial thought is it will take the spot light away from these markets but not have a dramatic effect on price range, that is my best guess. No one knows how the futures will affect these markets, not even the official experts, we just have to wait and see. This market is in a position to go either way since it is in the middle of the range. The bias is still bullish, but there are clear bearish signs that make for a very conflicting situation. When I evaluate swing trades, I look for more reasons to stay out of a market instead of getting in. I may miss moves, but avoid tons of REAL losses which is what has kept me in this game for so long, while many of my peers that I started with left the business years ago. Something to consider. Comments and questions welcome. (I am trying to catch up on all these, and others have stepped up to address questions and concerns, and have done a great job which is nice to see, if you have a pressing question, a PM will get a faster response).
BITFINEX:ETHUSD
by MarcPMarkets
8
BTCUSD Perspective And Levels: Looks Like 8Ks before 12Ks?BTCUSD update: After making the all time high of 11441, the rug gets pulled and now that this market has attempted to reestablish some stability, it is possible to get a better idea of where price is likely to go next. The outside bar that was painted 3 candles ago (11441 to 9000) is a sign of a top, at least a temporary one. For those who were shorting too early, THIS is an example of what should be in place BEFORE you even think about shorting this market. I also wrote about the symmetrical nature of the zig zag that produced an extension at the 10650 area which was not exact, but as you can see, was within the ball park of the peak. This why I kept repeating, lock in profit while you CAN, not when you have to. This dramatic price action has generated new levels to be aware of and has signaled a change in momentum to bearish. Measuring from the 5400 low, the nearest relevant support is the 9120 area which is now showing signs of a double bottom. Below that, there is the 7650 to 6690 area which is relative to the .618 area. The new resistance zone to watch for a retest is now the 10450 to 10870 area which is relevant to the .618 of the new bearish swing. This kind of price action is where people buy too early and think they just got a good price before the next run to 12k. Based on the current structure, this market is more likely to test the low 8ks or high 7900s before finding any significant stability. Even though there is a double bottom in the low 9ks to 8800 area, it carries much less weight in this bearish context. And relative to the big picture, the low 9ks is an extremely shallow support. The level to now watch for is a failed high within the 10450 to 10870 area. That is the place to experiment with shorts, NOT when this market is making new highs. Price actually tested this area very briefly and rejected it which also adds weight. Typically corrective moves unfold in 3 waves, (a zig zag formation) and at the moment, is possibly setting up for the next leg lower. I cannot short these markets even if I wanted to because I am not treading on margin. I have no problem waiting for a much lower price to buy into after stability reappears. I am writing about this bearish scenario because these are the signs that the market is showing based on structure and price action, and is NOT based on my feelings, opinion or anything else. I am flexible and have the ability to adjust to new information. Which means IF the market happens to break above the 10870 area with conviction, then that will negate this bearish scenario that I am writing about now. As long as it stays below 10450, the bearish scenario is likely to persist. That is what markets do, and it is our job as short term traders to go with the flow, not assert our meaningless opinions to validate our egos. In summary, I have NO intention of getting involved in this market until I see levels and price structure that are in line with my swing trade plan. Since I can't and do not short these markets, I have no choice but to stay out and observe. A break below the 8800 area will signal the next bearish leg is in play and can take this market back to the low 8ks. Do not get fooled by the initial leg of a likely broader sell off. Pay attention to the technical signals, not the news which can easily mislead the less experienced into thinking this is a buying opportunity. This market has gone too far too fast which is extremely abnormal (look at a weekly chart), and the corrective move that is attempting to unfold is actually very healthy and required before this market can continue higher. I do not know how low this market will go, but I do know that it is too early to view the current retrace as a buying opportunity. Be patient, make your plan and let the market come to you. Comments and questions welcome. (I appreciate the community members helping to answer questions here, again if it is a pressing question, PM will get you a faster response).
BITFINEX:BTCUSD
by MarcPMarkets
56
ETHUSD Perspective And Levels: Initial Selling And 345?ETHUSD update: My 516 target was touched before the rug got pulled and is now showing signs of a top. My swing trade was exited at 499 on the way to 500 according to PLAN for a 30+ point profit (in a matter of hours). I have NO intention of getting back in until signs of stability return. The fact that this market went from 516 back to 400 within hours is definitely a reminder of how risky these markets are. This is why it is always MORE important to calculate risk, than it is to anticipate profit. I did not expect my trade to hit it's target in a matter of hours, I figured a day or so, but I knew my risk going into it, and based on the structure and the signs at that moment, the RISK relative to the potential that I evaluated made sense for MY swing trade plan. It was not an emotional play, and I have no fear of missing out as some less experienced trader suggested. I placed my target at the time I entered the trade at 499 simply because I figured 500 will pose some psychological resistance even though I had an extension at 516. I know the limitations of TA and I understand that I am not dealing with absolutes, but instead estimates. At this point, all the markets have developed a similar structure and this can be the initial leg of a more bearish structure. I have NO intention of buying any near by supports until I see clear signs of stability. The signs that imply further weakness include the long wick off of the 516 extension, the decisive break of the consolidation support, and two minor support levels just below it. There are now two resistance levels to watch for and they are the 450 area (previous support) which is now the .382 resistance of the new bearish swing. And the 476 to 492 area which is the .618 resistance relative to the new bear momentum as well. Based on the concept of market symmetry, if this corrective move is going to unfold in a zig zag where the first and third leg are of equal length, then that puts the potential completion of this selling effort at 345. This is not an absolute prediction, but offers some estimate of how far this market can retrace before the selling is more likely to exhaust itself. This is the same type of measurement that I use to generate the extension targets when the market is pushing highs. Since there is a very bullish bias in these markets generally, price may find stability sooner, but I will let the structure appear before I look to evaluate any new longs. One scenario would be a larger time frame double bottom in the 400 area which can take at least a day or two to unfold. In summary, when everyone is celebrating new highs and eating up all the hype, it is easy to forget the risk. These markets are extremely risky and can get the rug pulled from under them at a moments notice. I keep getting messages from traders who seem to have this built in assumption that these markets are normal and that they are stable investments for the future. Stable investments do not move at the rate of 5 to 10% in a day higher or lower. These are extremely speculative markets which are ideal for short term trading strategies because they change so fast. I kept urging people to lock in some profits WHILE YOU CAN, and instead I get, "So how much higher is this going to go?". Selling the top is a lottery ticket, a long shot, low probability. Focus on mitigating risk, and high probability strategies like defining levels and waiting for structure to better confirm trades. If you're only plan is to "just make money" then you should not be in these markets. As far as the current structure, there is likely at least one more selling leg and I have no interest in buying at the moment until stability is clear as defined by MY plan. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
18
BTCUSD Perspective And Levels: Jack Be Nimble. Very.BTCUSD update: It appears Wave B is in play with one more leg expected to retest the high 6ks to low 7ks before the C Wave unfolds taking this market significantly lower. Based on the structure at the moment, the current formation appears to be transitioning into the second leg of Wave B which often looks like a minor retrace of a zig zag formation. A higher low and push to the 6930 to 7330 resistance zone is what I am anticipating as the next move for this market. Like I have been writing about, this is a tricky formation. It does not have to go as high as 6930, it may fail sooner. Or it may go slightly above the 7330 and then fail. There is no way to predict that movement for sure, the best I can do is forecast that as one possibility out of many. The key to using this information is being prepared IF the market chooses this outcome. In terms of day trading, I think there is a good opportunity for longs with a relatively small stop (70 to 100 pts while aiming for a 150 to 200 point target). In terms of swing trades I am open and flexible to go long IF price can retest the 6050 level and show a reversal formation on a smaller time frame (1 hr or 30 min). That support area offers more attractive reward/risk in my opinion for longer time frame strategies (multi day is long for this market). A break below the 6k to 5800 area (.618 of the current bullish swing) will signal that prices are likely going to break the 5400 support and retest the high 4ks (especially if there is a lower high established around the current levels). I keep repeating this because I think it is easy to forget when prices are moving: you must be nimble. That means recognize change and adapt quickly. It is a day trading mindset which has no room for opinions. If you are slow to move, or stubborn, or don't have a clear trading plan with stops and targets predefined, then you really should not be trading this market at all. My plan is simple: Buy the failed low and attempt to capitalize on the retest of the 6900 area. I am flexible, I have no opinions and no ego. To me, it is not about being right, it is about recognizing when variables are lining up that are in line with my plan, and recognizing when they are not and adjusting to that information. It is hard to share this thought process in real time because the market makes its moves when it makes them, and I am not in front of a computer 24 hours a day to write about it. This is why I always say you must learn to think on your own and use analysis like this for context and perspective to help confirm and adjust your own independent interpretation. In summary, the current bullish retrace in this market is not poised to go back to 8k (at least not yet). B Waves often attract a lot of traders thinking they are buying a pullback, but in reality it is setting up for a much broader bearish wave (C Wave). That is the way the structure is unfolding at the moment and it can change. I have written about this situation before only for the market to consolidate and break out to new highs. What makes this situation different from those previous environments is there are 5 clear bullish waves complete which on this magnitude implies a much broader correction or consolidation at least. Don't get stuck on feelings and opinions in this market, it is too fast. TA is your best friend when you need speed, but you have to know it well. An RSI on a 15 minute chart is not going to help you unless you know how to interpret it within the context of the price action going on around it. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
49
BTCUSD Perspective And Levels: Extreme Prices And The Retrace.BTCUSD update: Price decline to 5400 and then sharp retrace leaving behind a possible pin bar on the larger time frames. This is most likely the completion of the A Wave. Keep in mind in markets where emotion runs to extremes, levels are going to be far from precise. The 6030 level was the area where I was looking for a bullish retrace to begin the B Wave counter correction, but price went to 5400 instead. This is not logic driving these markets when prices extend that far that fast and then reverse. More importantly, if the current candle closes with a long tail, it will establish a pin bar. These are reversal candles and when they appear on a large time frame (4 hour and above) they carry a lot of weight. A break of 6469 will signal bullish momentum and most likely the beginning of the B Wave. I have written previously that these are tricky waves because they often fool investors into thinking it is the next leg to a new high. If the B Wave unfolds, it is possible for price to retest the 6950 to 7350 zone which is the .618 resistance of the current bearish swing. How is this information helpful? For one, if price breaks above the 6569 high, this market is likely in retrace mode so that means if you have been shorting, you should stop until the next resistance is reached. Possibly lock in more profit (if you are short from the 7ks) and cut losses if you shorted the lows. Also there will be many day trade opportunities on the long side if the market manages to work its way back up to the low 7ks. Why not go long for a swing trade? The reason is the coming bounce (IF it unfolds) is less likely to reach the low 7ks. In the face of such bearish momentum, it may only go to the .382 resistance at the 6350 area and then continue lower. This price action does not favor swing trade longs. And again this is where smaller time frame strategies like day trading solve that problem because the trade is open for a much smaller period of time. Things change way too fast in this market to be taking low probability trades especially when more time in the market is involved. It is possible for the B Wave to be a small retrace that does not get beyond the .382, either way, the next wave which is the C Wave can take this market to the high 4ks. There is a .618 support zone at the 4789 area which is relative to the recent bullish swing originating from the 2980 low. It is just under the broader support in the 4950 area that I have written about in previous reports. A failed high (B Wave) can lead to these levels in the next week or two if this correction persists. IF price manages to retest the high 4ks, that would be an area to watch for some form of stability. Such as a double bottom that takes a number of days to form. This is the area where I would be interested in buying for a broader move back up if the right structure presents itself. That is my plan. Also now that BCH is in play, (and much stronger in terms of fundamentals) BTC may not be worth holding for the long term anymore. It appears BCH is attracting all the investors. That is a risk that we all face with these coins because technology evolves so fast, a coin can become obsolete relatively quickly. And this is why TA is so valuable, it provides signs that can prepare you for what is more likely to happen next, just like the top of this sell off. News is only a catalyst. In summary, this market is in position for a retest of newly projected resistance levels which offers day trade opportunities on the long side in my opinion, no swing trades. If price establishes a lower high in the coming week, it is likely to retest the 5400 low and possible push into the higher 4ks before finding a more stable support to build a base upon. For those who short, 6350 and 6950 are the levels to watch. Other than that I am staying flat and waiting for the market to offer a more attractive reward/risk situation. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
42
BTCUSD Perspective And Levels: Is This A Good Time To Buy?BTCUSD Update: Price continues lower as it nears the 6040 support. What makes this area especially notable is that fact that it is the previous range resistance from October (5960 to 6150 highs). This is a likely area for price to retrace into a Wave B counter correction. Price appears to be falling like a rock and scaring out the weak hands. Now the 7500 price action doesn't look so appealing any more. My guess is that most people who bought into the 7ks not wanting to miss the train, are now jumping off the train. At the moment, 6841 is the .382 resistance of the recent bearish swing. This level will keep adjusting lower until price stops making new lows. As long as price stays below this level, it is likely to trend lower, even after a minor bullish retrace to test this level. The bullish retrace I am describing would be the Wave B leg of the correction which is counter to bearish momentum at the moment. Wave B is what sucks in many early longs and then fails to make a new high. This Wave is tricky because it is actually possible for it to retest the previous high or go slightly higher before the C Wave asserts itself. The 6040 area and price range just below 6k (high 5900s) is the old resistance of the October consolidation. This is a high probability area for a price bounce and convenient starting point for Wave B. Is this a place for swing trade longs? No, but day trade sure. Again you must be agile and take profits when you can because a bounce to the high 6900s is not unreasonable over a day or two. Why not a swing trade long? There is no justification of stability on this time frame. When markets are this dramatic, swing trades carry a lot more risk because the more time you are in the trade, the more of a chance things can change and go against you. I would rather initiate a long once I see solid signs of reversal on this time frame, like a double bottom. If day trading though, the chances of a reversal pattern appearing just above the 6040 area but on a smaller time frame are much greater. All you need is a small bounce of 100 points, and have a nice trade on your hands. That is where the opportunity is in this market, again if you have the time, experience and agility. If you think you are going to hold it to 7900 from here, that is where the problems arise. I am interested in a long, but not at these levels unless I see a range, or a large time frame reversal. Also keep mind the money that is migrating out of this market is not exactly going into all the alts. It appears BCH is where the order flow spot light is at the moment. That would be a better market to look for longs in upon a retrace. The question is, when this market bounces, will BCH pull back simultaneously? That would offer a swing trade opportunity long since that market has a ton of potential both near term and long term. In summary, unless you are day trading, this market is not in a position that offers attractive reward/risk for swing trade longs. It is too early to begin buying for a multiday or mulitweek hold in my opinion. For the traders who had the courage and conviction to short and stay short, this is a good area to lock in some profit as well (never hurts to reduce risk). The next resistance is the 6840 area and will likely be an attractive level to short again (to be clear, I do not short these markets). If the next bullish retrace is shallow (stays below 6840) and turns lower, the next leg can take this market into the 5ks. I report what I see and propose scenarios based on the price structure that is present at the moment. Things change extremely fast in these markets, and not getting stuck with an opinion and being flexible to whatever the market throws at you is more valuable than trying to figure out "why" everything is the way it is. It just is. Accept it, trade it or not, adjust and move on. That is the active trading mentality. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
21
BTCUSD Perspective And Levels: Is 6K Retest Possible?BTCUSD update: Price declines significantly breaking below the 6900 support and triggering the water fall of sell orders which is perfectly normal. While the double top is confirmed and the bearish momentum in play, this is NOT the time to be buying supports unless you are day trading. In terms of wave count, this is the A Wave which is the first leg of a corrective formation. Often the B Wave is the bullish retrace that establishes a lower high, which is then followed by the C wave which is the deeper and emotional wave the completes the correction. At the moment, the .382 resistance measured from the 7900 high is at the 7000 level. This means as long as price stays below this resistance, this market is likely to continue lower. Keep in mind B Waves often go to the .618 resistance before the C Wave begin. In recent months, these corrections have been tricky. They have been brief, and the bullish trend has continued without much interruption. That can happen here also, but I have no intention of buying into this retrace to find out. At this point, momentum is bearish and I expect supports to break, until one of two things occur: price retests a MAJOR support area and finds enough stability to present a reversal pattern on a larger time frame, or price spends enough time in a consolidation to qualify for stability and potential continuation of the larger bullish trend. (Like the formation that occurred on early October). The projected support that I am looking for to eventually be retested is the 6048 area which is now the .382 of the bullish structure measured from the 3005 low. It also happens to be in line with the old resistance that was part of the previous consolidation earlier in October. That is a reasonable completion point which I do not think will be retested in one single leg. It would be a convenient level for a Wave C to complete and I will be watching for that type of price action. A decisive break below this support, and price may be working its way toward the 4950 area which is now the .382 of the entire bullish structure measured from the sub 100 lows. This level is not that unreasonable in terms of the bigger picture. These are the levels that are within reason BASED on market structure. I know the limits of TA and do not pretend that it provides an absolute forecast of what will happen in the near future, I am flexible and adjust with the market. In my previous report I wrote about looking for opportunities in the alts, but the main ones, ETH and LTC got hammered in this sell off as well which once again demonstrates the inconsistency of the BTC/alt relationship. BTC goes higher, the alts sell, BTC gets hammered, the alts sell too. So instead of playing victim to it, I just look at each market individually and wait for opportunities to appear while putting much less weight on the BTC relationship. And on that note, the big winner is BCH which is now pushing 1k (very nice call by @goldbug1 on that one). Another great market if you are agile, the funny thing is this one was selling off along with this market until today (I'm sure it's news related). In summary, my plan has not changed: Avoid this market, look for opportunities in the alts if the levels and formations make sense in terms of risk on their respective charts. If you have the skill and experience to day trade, there is plenty of opportunities to buy and sell these large intraday moves (600+ points in a day is a lot to work with). This sell off was coming, like I wrote previously, the structure was in place. Anything could have sparked the avalanche of sell orders. Being long term bullish on these markets, I am all for buying pullbacks, but the key is not to buy too early. Right now is too early for a larger time frame type of strategy like swing trading in my opinion. Don't be shaken by the drama pouring out of the media outlets. Stay calm, be flexible and most importantly have some kind of plan. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
36
BTCUSD Perspective And Levels: Just Needs A Push.BTCUSD Update: Interesting turn of events now that Segwit2X was conveniently cancelled. With no incentive for free money, why isn't this market falling apart? It just needs a push. I will explain. I was not aware of the news when I published yesterdays report, but I was aware of the price action. After I found out, I looked up some articles and you really need to consider the sources. There are all kinds of random, uneducated nonsense articles out there that are being published to generate page views to justify higher ad revenue. Knowing that Segwit2X has been cancelled is useful, but everything else? Clearly these are not market technicians writing these articles. Also someone pointed out that interest in this market is at all time highs. The institutions want in, the CME is introducing a futures contract, and it is just a matter of time before the SEC approves an ETF for the mainstream to invest in. In the long run, these are bullish fundamentals for sure, but for the short term? This is a sign of a top. New traders and investors do not understand the contrarian point of view, but it basically says, "The crowd is always wrong at major turning points." All markets work this way, it is a pattern of the herd mentality. We are programmed to think in terms of logic, but markets do not work in obvious and logical ways, they are irrational which is why we must always be open for anything. It is also worth mentioning that when the futures and/or ETFs start trading, it is going to constrain the short term opportunities in this market because futures and securities are regulated. I don't know how the developer community is going to propose and cancel forks in a regulated environment. Here are the facts right now: A double top is present on the larger time frames which is a bearish sign. 5 of 5 Waves are likely complete, another bearish sign. The 7900 level was a price extension coming from a major low, often these levels serve as completion points (wrote about this in my previous reports). If the market is going to retrace to a much deeper level, it is now in position to begin that decline. What is missing is the catalyst. All this market needs is a push which can be some kind of news of government action, etc. I am not one to paint rocks (in contrast to rockets), but retesting the 5700 area is not that unreasonable. A break below that and the 5k level is also very possible. These levels would actually be a normal and healthy retrace if you observe them on the weekly chart. The first thing that needs to happen is the break of 6900 swing low. If that level holds, or does a false break (a fake out) near that area, this market may just be consolidating instead of selling off sharply. Also the alts got a boost on this news. ETH, and a bunch of the cheap ones are all up nicely which shows that the current state of the BTC/alt relationship is inverse. IF this stays intact (it has changed a number of times) then it is reasonable to expect the alts to perform as money migrates out of BTC. At the moment I am looking at the alts like LTC, ETH for possibilities if BTC declines (IN THE SHORT TERM). In summary, you must be open to anything. So many less experienced traders/investors expect TA methods and indicators to offer precision. This is not a lesson in engineering. There is no precision. The goal of analysis is to discover clues and weigh probabilities to see if potential outcomes make sense in terms of risk that we are willing to take. If the market presents an unanticipated scenario, we simply adjust. That's short term speculation. At the moment my plan is to completely avoid this market for any swing trade longs, and look to the alts for opportunities. The way I am interpreting this situation in light of the Segwit2X cancellation is this market is vulnerable to any bearish catalyst of a larger magnitude, like a Chinese government action or something along those lines. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
57
BTCUSD Perspecitve And Levels: The Outside Bar Bearish Reversal.BTCUSD Update: Higher low established at the 6900 area followed by a new upswing that has just spiked to 7900 and formed an outside bar. This is the Wave 5 of 5 that I have been writing about that may have exhausted its potential going into the fork over the next 8 days. Once the incentive is over, the environment will be setup for the beginning of a much larger correction. Especially now that an outside bar is present. I like to describe Elliott Wave as a "road map" that gives us an idea of where we are within a trend. This information helps us to form realistic expectations about what is possible in the near future. (This is why I never paint rockets). Once I can confirm a count of 5 waves within Wave 5, I know that the next wave is most likely going to be a more serious correction because often the market goes into Wave A (the first leg of a corrective series). That is the more straight forward part of using Elliott Wave, but it becomes more challenging when you are trying to figure out how deep the correction can go. That is called the magnitude of the wave. The reason why I am saying that once this 5 of 5 completes, this market is in position for a deep correction is because if you look at this market on a weekly chart, you will see that this entire rally coming from 150 per coin, will be completing 5 large degree waves. The chances of a large magnitude Wave A (aka deep correction) are very likely in this section of the "road map". You can think of this entire structure as a giant Wave 1, and we are about to go into a giant Wave 2 which THEORETICALLY can retest levels below 1k (this can take weeks or months). Now that 7900 has been touched and the market immediately sold back to 6977 within hours is a very bearish sign. Outside bars are considered reversal patterns and for this one to appear at these levels within a Wave 5 of 5 adds to the argument significantly and can begin selling off even before the actual Segwit2X (Buy rumor, sell news). Not only is this price action showing an outside bar, but on larger time frames it appears as a pin bar. A break below today's low and we are in for selling of a larger magnitude. Isn't 7900 is a new high? It is only 300 points higher than the previous high of 7600 which relative to this market is not that much higher. This can be interpreted as a failed high or double top variation and again another reason not only to avoid longs on the swing trade time frame, but also to expect a deeper correction soon. If price breaks below the outside bar, I will NOT be looking for any buying opportunities at the upcoming supports because I expect them to break. A decline to 6750 area will further confirm the initial leg of an A Wave which can be followed be a B Wave (bullish swing, lower high) going into the fork. After that, if this market has not broken higher (beyond 8k), and these current highs are still intact,it will be reasonable to expect a retest of the 6k level or lower in the following weeks. In summary this market is now in position to sell off on a much larger degree. Being in a Wave 5 of 5 along with a blow off top (outside bar) and volume spike, (40k coins vs 10k average) in 4 hours are all bearish reversal signs. There will be plenty of smaller time frame retraces worth 100+ points which again is a day traders market. As far as swing trades go, I am now avoiding all together. Along with this bearish spike, the alts got a bullish spike which may also translate into a bullish reversal that may continue as BTC money stampedes for the exits. If YOU short these markets, now is the time to look for opportunities since structure is now in place. I will not be too surprised if the market begins to sell sooner than the fork, with a lower high forming into the fork day and then failing. Remember I am just estimating based on price structure, as long as price keeps generating bearish signals, I will be staying away from this market. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
58
BTCUSD Perspective And Levels: How Low Can It Go?BTCUSD update: 7030 is touched as price attempts to retrace after the relentless rally. The big question: Is this the beginning of the big correction that everyone has been waiting for? Or just another shallow retrace? I will refer to Elliott Wave in order to get an idea of what is reasonable to expect. After the consolidation breakout which eventually got labeled as a Wave 4, the count for the 5th wave is pretty clear. The current retrace puts us in 4 of 5 which implies there is a chance that we get one more attempt at new highs before the BIG correction. We are now 10 days away from the fork, which makes for plenty of time for a retrace, a reversal and one more push toward 8k. As I wrote about in my previous report, there are extension overlaps in the 7900 to 8k area which makes it a convenient potential peak. So if I were shorting (to be clear I am not), I would not be too aggressive with target expectations on this leg. 6840 is the nearest support which happens to be the .382 of the recent bullish swing measured from the 5632 low. That level may offer a swing trade opportunity long if a smaller time frame reversal pattern can appear there. If that initial support breaks, the next support is the 6640 level, which is the .382 area of the bullish structure measured from the 5114 low ( previous Wave 4 low). IF price actually retests any one of these supports, and a bullish reversal formation shows up on a smaller time frame like the 1 hour, these would present attractive reward/risk opportunities. The key to this is the bullish reversal formation (like a double bottom) which provides a reference point to measure risk from. Without that, we are just bottom fishing. The mistake you want to avoid is jumping in too early. This is an easy mistake to make without any point of reference or too much focus on smaller time frames while attempting to swing trade. For me, the entry process begins with the level, and if price is not at a level that I have defined previously, then I have no reason to do anything else. Once it reaches a level then I move on to the next step which is to evaluate the chart patterns. What if price never makes it to a level and reverses sooner? That can happen, and that is not a trade that I will participate in. I am looking for opportunities that fit within my criteria for my swing trading plan. This keeps my decision making simple and helps to minimize any emotional tendencies like forcing trades because I am afraid to miss the next move up. How do we know this is not the big correction? I am anticipating that it is not because of the fork in 10 days. I believe many of the investors who missed out will see this as an opportunity to get on board the money train before it goes to 10k (which is what all the hype is telling them). That may be enough to get this market to retest the high which will complete Wave 5 of 5. After that, any correction like this and I will be expecting much lower levels. Anything can happen and I could be wrong, but that is what I am going by until the market proves otherwise, In summary, the current retrace is perfectly normal and still very shallow at the moment (relative to this market). This exact price action is why I do not buy at 7500 even though this market still has a chance to run to 8k. I am willing to take a long swing trade at the 6840 level or 6640 level if price action cooperates (and risk can be clearly defined) and hold it only for an attempt of retesting the high. Wave 4's are typically the easiest wave to forecast because 3 waves have to be in place which is the scenario at the moment. Since swing trading means a trade can go on for days, it is a tougher strategy to employ in this market because of how quickly things change. So for now I will wait to see if the market can reach my predefined levels and then evaluate the chart patterns from there. Be patient and be flexible. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
37
BTCUSD Perspective And Levels: Failed High Or Minor Retrace?BTCUSD Update: A push to a new high, but could not sustain the break out. This failed break is a bearish sign which still maintains the possibility of the C Wave to unfold which can take prices to the 5500 area or even the 5360s. Aren't new highs usually a bullish sign? They are, but in this case, not only is price structure presenting a possible double top, but can also be showing the B Wave that I wrote about in my previous BTC report. B Wave corrections are 3 leg waves that can actually take the market to a slightly new high, just like what has happened in this market, and then fall apart which is the C wave. Now keep in mind, I am estimating the near term direction based on the price structure that is in place at the MOMENT. Things change very fast in this market, and the ability to adapt quickly is what makes a good trader good, not getting stuck on an opinion and then complaining that my analysis didn't play out. For the less experienced, TA is not a weather report. This is why I always recommend learning how to make your own decisions, so that when the market changes, you can change with it, instead of fight it. The other factor that is prompting me to expect weakness from this point rather than strength is the area of price failure. The 6200 to 6400 zone is actually an extension based on the recent swing from 6206 to 5362. This zone is where false breakouts are more likely to occur, so if the market is going to break out, it needs to clear this zone, not run up into it, and then sag like it is now. I do not short these markets which I have explained previously, so the best I can do it use these signals as a reason to stay flat. A confirmation that more selling is likely would be a break of the 6k level which is not only psychological, but it is now the .382 of the recent bullish swing. Shorting this market can be rewarding, BUT as I keep writing, you must be on top of it, and you must have a solid plan so that you can recognize when the market is turning back up and get out quickly (definitely not a good idea for less experienced traders). If you are trading without a set of criteria to guide your decisions, then you should not be trading at all in my opinion. What about the higher low at 5632? I wrote about this scenario in my previous BTC report as well. This structure cannot be ignored and certainly challenges the short argument. It is possible that this level is a Wave 2 bottom which makes the current leg a possible Wave 3 of 5. This is where the market must choose. If price manages to stay above the 5960 area, and starts pushing highs, then that would be a confirmation which can take prices into the 6500 area. I don't know if this will happen, but any sharp rally from the current level will confirm this scenario. In summary, for those who are less experienced with TA, it is far from an exact science, and you must not expect a forecast to play out exactly. TA offers tools and methods to isolate potential scenarios from countless possibilities. From that point, we can then evaluate risk and reward and decide if the trade is worth taking in accordance with our plan and risk tolerance. In the case of this market, the risk is still too high to buy for ME and since I do not short, then all I can do is watch. I am interested in buying AFTER price has retested a support zone like the 5500 or 5350 areas (that is IF the market offers that opportunity). If price can reach the lower 5k supports, that would be a convenient area to complete this possible Wave 4, and that is where the lowest risk opportunity is to participate for a Wave 5 back up into the 6500s. Either way, this market will eventually line up with my criteria, and when it does, I will be prepared to act. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
42
BTCUSD Perspective And Levels: The 5330 Target?BTCUSD Update: Price retraced off the 6020 high establishing the lower high formation which is a sign of weakness especially since the .618 resistance area held. Now that the 5690 minor support is taken out, this market is most likely in the C Wave of 4 which can take price to the 5323 level. Like I wrote about in my previous BTC report, lower highs often lead to lower lows. In terms of simple resistance levels, 6020 followed by 5870 are lower highs.The consolidation between 5690 and the 5870 level (which happens to be the lower boundary of the .618 resistance zone of the initial bearish structure) was the confirmation point for continued bearish momentum. A break below this zone further confirms the C Wave of 4 is in play. In terms of Elliott Wave, I wrote about how the market needs to choose between the two scenarios. The first is the bearish C Wave, and the second is the bullish higher low between 5600 and 5500 which would then be a Wave 2 low. At the moment I am leaning more on the bearish C Wave because of the lower highs that are in place. Until bullish price action returns and proves itself (as in forming a higher low in the 5500 area), I will just listen to what the market is saying now. If this is truly the C Wave, then within the wave, the break of the 5690 support is be the beginning of Wave 3 which can complete around the 5530 area (1.0 extension of initial wave) before there is a bounce attempt. After a minor retrace, the Wave 5 of this formation can take prices as low as the 5330 area (1.618 extension of initial wave). For people who wonder why I do not short even though I am writing about bearish scenarios. The answer is I only play one side of these markets and do not use margin. Shorting these coins, especially this one, requires a ton of attention, because things change so fast. If I want to get involved in swing trade shorts, I would rather do it in the forex markets. In summary, this market appears to be following the path of the C Wave of 4 that I wrote about previously. If it continues without any curve ball surprises, then the 5330 level is a likely target. There is plenty of opportunity to short this market on the smaller time frames if that is within your trading plan. My plan is to wait for this Wave 4 correction to complete and get long in anticipation of Wave 5. Either way, as you know, anything can happen in this market and being flexible will serve you well. Price action often signals changes before anything else. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
13
ETHUSD Perspective And Levels: Lower High Or Higher Low?ETHUSD Update: I am still long from 298.84 while watching this market unfold in a tight range. I have placed an order to sell half of my position at 289.50 which will leave me with 15% of my normal position size with a stop at 279. When a trade is not behaving the way it should, then it is time to reduce risk. So here is my plan: If 290 breaks, then I want to see how price behaves in the mid 280s which is the .618 of the recent bullish swing. If price falls below that, then 270 is the next support which held previously (I wrote about the importance of this level in my previous report). If the 280s hold, I will look to add back to my small position, if 279 is taken out, then I will be fully stopped out. IF price breaks below 270, that will open the door for a retest of the 250 level which is also a key support for a number of reasons. It is a 1.0 extension measured from the highs, and it is also within the .618 support zone of the entire bullish structure that led to the 355 swing high. If I get fully stopped out at 279, I will not reenter until I see bigger picture momentum showing clear bullish signs. At the rate this market is moving, that may take a couple of weeks. Keep in mind, the type of trade I am focusing on is a swing trade. There are more frequent opportunities both long and short on the smaller time frames if you are looking for more action, but you must be quick on the trigger and be extremely flexible with your decision making. Being caught with an opinion on the wrong side can be expensive. Right now, I am leaning more on the bearish side because a strong market spends more time messing with highs, rather than lows. A break below 290 will establish a lower high formation and that often leads to further weakness which means the oncoming supports are more likely to break. Not exactly a good environment for longs. In summary, I am more interested in reducing risk at the moment. If price retests the 280s or low 270s and shows significant support and reverses, I can always get back in after some confirmation. Strong markets push resistances, not keep testing supports. I am still holding a small portion long with a stop for half at 289.50 and the other half at 279 to give this market a chance to prove it has strength in the 280s and negate the current bearish environment. Let's see what happens. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
23