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Fibonacciretracements

BTC: Don't Catch a Falling CoinPrimary Chart: BTC's Right-Angled Triangle "Don't catch a falling knife" is an oft-quoted aphorism among traders and investors. At its core, it's a warning about the dangers of buying into a downtrend or sharp drop before price has shown evidence of a bottom. Of course, there are profitable trading moves around buying dips in uptrends , and this cautionary phrase is not meant to address that situation. And some expert traders frequently do attempt to catch falling knifes at key supports, with tight stops, and with smaller position size, while acknowledging the low-probability nature of the obvious countertrend play. BTCUSD has experienced a severe ten-month downtrend since its all-time high. Experts have debated far and wide whether cryptocurrencies such as BTC and ETH and others have put in a lasting bottom or whether new lows are ahead. To attempt to catch the bottom in BTC now is as risky as it was back at the end of March 2022 after BTC's first bear-market rally. To buy BTC now, especially blindly and without a trading or investing strategy, is a lower probability bet than waiting in cash (for investors) or positioning on the short side (for traders). This is a time when the saying "don't catch a falling knife" applies. The author acknowledges, however, that fundamentally oriented investors may have reasons apart from technical charts to buy BTC for the very long term that may indeed remain valid. But even some well-known fundamentally driven professional money managers in this decade do not just ignore what the technicals and price trends shown on the charts are saying. BTC's Established Downtrend Since November 10, 2022 BTC has remained in a severe downtrend since November 2021 when it made an all-time high at $69,000. The Primary Chart shows a basic downward trendline where each bear rally has found resistance. Note also how this downward trendline rejected price repeatedly several times in late March and early April 2022. Once again this week, just when many wondered whether BTC was about to prove that its June 2022 low was a lasting one, BTC reversed right at this trendline. This trendline is also shown by the zero line of the Fibonacci channel, drawn on the chart below Supplementary Chart A: Fibonacci Channel for BTC The Primary Chart also shows that price has held above key support at June 2022 lows in recent months, which causes BTC's price action to form a sizeable right-angled triangle . Unlike symmetrical triangles, right-angled triangles imply a breakout direction. Martin Pring, a well-known technical expert, writes: "The symmetrical triangle does not given an indication of the direction in which it is ultimately likely to break. The right-angled triangle does, with its implied slanting level of support or resistance." But one cautionary point Pring makes is that triangle breakouts experience retracement moves frequently. If the original breakout is missed, some savvy traders often move in to catch a backtest if one occurs. Recent Confirmation of BTC's Downtrend BTC has confirmed its downtrend remains viable this week. Price tried to break above the downward trendline shown on the Primary Chart above. But it failed right at this resistance level. BTC has also tried to break and hold above three anchored VWAPs from the past several months. Each VWAP is placed at a key level of support / resistance at a recent swing high or low. The first is the anchored VWAP from May 31, 2022. The second is the VWAP anchored to the June 2022 low., the third is the VWAP anchored to the mid-August 2022 high. Below, Supplementary Chart B shows these three anchored VWAPs. More importantly, BTC's chart shows three failed breakout attempts above the May 31, 2022, VWAP. It shows five failed breakout attempts above the VWAP anchored to the June 2022 low. It shows one failed breakout attempt as to the VWAP anchored to the mid-August 2022 peak. Supplementary Chart B: Three Anchored VWAPS The most recent breakout attempt during the first week of September 2022 was notable for its speed and force. Within a mere six days, BTC's price rose 22.87 percent from the low to high of that swing. Considering that swing, however, most of the gains have been lost in the 3-4 days since its peak on September 13, 2022. BTC has also lost all its key retracements of this 22.87% six-day rally, except for the .786 retracement. Losing the .50 and .618 retracements of this rally, combined with the multiple failed breakouts above the May, June and August anchored VWAPS, provides further evidence to support the downtrend's continuation in the near term. Supplementary Chart C: Fibonacci Retracements of 22.87% Rally in Early September Further, the slope of the 8-day EMA provides a useful gauge of near term trends and momentum. Since the 22.87% rally ending September 13, 2022, the 8-day EMA has decisively begun to slope down again. Price has also crossed below it and found resistance into it. The 8-day EMA has also crossed below the 21-day EMA, a more intermediate-term trend gauge that also has turned down. Supplementary Chart D: Slope of 8-day and 21-day EMAs Attempting to guess where the bottom is and blindly buying, hoping that the price will rise, can sometimes work very well. But it fails more often than it works. A more strategic and prudent approach might be to evaluate some of the most simple trend gauges. Tuning out all the news and other noise about potential bottoms, one could consider the 8 and 21 EMAs on this chart, together with the other technical evidence. They have signaled along with the anchored VWAPs that the path of least resistance is lower for now. Further Evidence from Recent Peak in Momentum The 22.87% six-day rally in early September was impressive. Without seeing the downward trendline, one might suspect that BTC might be attempting to prove its June 2022 lows were final lows. But not only did price peak right at the downward trendline as one might expect, RSI momentum peaked just below the resistance level formed over BTC's entire summer rally since June 2022 lows. Note how RSI peaked at approximately 61.34 on September 12, 2022, the day before price hit the trendline and reversed lower. This is a common spot where RSI can reach during valid downtrends. In other words, RSI in a downtrend can find resistance at an upper range of 50-65. Supplementary Chart E: RSI Peak at Resistance on September 12, 2022 The Fibonacci Channel's Dynamic Support Levels The Fibonacci channel not only provides a clear trend gauge with its zero line, it also provides dynamic levels of support and resistance that run parallel to the predominant trend. The chart below shows the Fibonacci channels parallel lines with annotations pointing to areas of dynamic support where price may reach in the coming weeks. First, the teal line is the .236 retracement, a line immediately below this Fibonacci channel's zero line that runs parallel to it at a .236 proportion of the entire channel. Each of these Fibonacci channel supports are dynamic, which means that they change as time progresses. The teal .236 line would be the first multi-week support to consider around $14,700-$16,500. If this line does not hold, then the next line down, the .382 line (purple) offers support at approximately $10,000 to $13,000 in late September and early October 2022. Supplementary Chart F: Fibonacci Channel Intermediate-Term Support Levels Violation of Short-Term Levels Before the Next Trend Move Before the next downtrend move can occur, however, the June 2022 lows must break. The June 2022 lows lie at $17,592-$17,930. Another key level must also be broken before concluding that June 2022 lows will be tested. This level is $19,223, which is .786 retracement of the entire summery rally for BTC. This 19,223 level also coincides with the other Fibonacci .786 retracement of the early September rally at $19,447.57 (shown in Supplementary Chart C above). Supplementary Chart G: Fibonacci Retracements for Entire Summer Rally in BTC Volatility Compression Suggests Directional Move Ahead Lastly, volatility typically runs in cycles. Volatility compression leads to volatility expansion, and volatility expansion tends to lead to volatility compression. One way to gauge when the next directional move is nearing is to examine volatility. The Bollinger Bands help traders do so. The Bollinger Bands plot a line at a given number of standard deviations above and below a mean. The Bollinger Bands on BTC's chart below are plotted at the default of two standard deviations above and below the mean. The Bollinger Bands on the daily chart of BTC show volatility has compressed despite the 22.87% move in early September and the sharp selloff since. This suggests a significant trend move is approaching rather than completing. Given evidence of BTC's downtrend being well established, consider that the probabilities favor a downward trend move in the coming weeks associated with the end of the volatility-compression and the start of its expansion. Supplementary Chart H: Bollinger Bands and Volatility Compression _____________________________________ Please note that this technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction. BINANCE:BTCUSDT CME:BTC1! BITSTAMP:BTCUSD KRAKEN:BTCUSD
BITSTAMP:BTCUSDShort
by SquishTrade
22
Price Exhaustion Just Before NVDA's Earnings ReportPrimary Chart: Trendlines, VWAPs and Fibonacci Levels Summary: 1. NVDA's bear rally shows signs of exhaustion by breakout to the upside out of its parallel channel. 2. Seasonality remains bullish so that could cause more unexpected moves to the upside before lower. 3. In the intermediate to long term, NVDA likely heads lower. The bear could resume this week. Or it could resume in a few weeks or a month or two. No need to guess, just follow price. 4. Earnings are risky binary events, and price can whipsaw or even move further than the expected move. As a hypothetical example, consider the price path shown on the primary chart, which should not be read as a forecast but a possibility around earnings. 5. In a prior post from mid-September 2022, SquishTrade showed a chart that revealed a path to about $83 for NVDA in the longer term. That target remains viable. That won't happen in a straight line and it likely won't happen in a day or a week. That chart is shown below: This chart is found in the updates to ST's September 12 post linked here: NVDA's countertrend price move shows signs of exhaustion just before earnings reports after market close. NVDA could react in either direction similar to FAANG and other tech stocks' reactions last month. Some tech stocks surprised to the upside with a failure soon afterwards (AAPL), while others fell further than expected (AMZN, GOOGL, META). On November 13 (Sunday), a prior NVDA post was updated with some countertrend targets after the rally that had begun on Thursday, November 10 (post CPI data report in the US). That update can be found here . One of those targets has been reached—see the larger yellow circle on the chart above. That was the major resistance zone of $165-$174 around the Covid-low VWAP and the .786 Fibonacci retracement. While this author provides technical analysis generally, leaving all decisions about trading to each trader's own system and rules, he avoids trading just before earnings. Most traders would be wise to do the same unless they have a strategy or edge specifically for those types of binary events. Some traders choose to trade volatility strategies around earnings—perhaps buying vol a few weeks before and selling it just before earnings, or selling vol just before earnings and closing thereafter. But those are difficult to implement and manage, though some experts appear to have viable strategies for this. Beware the whipsaw move post earnings as well (as happened with AAPL around earnings in late October 2022), a pump and then a dump or a dump and then a pump followed by another dump. The Primary Chart shows a hypothetical example of such a whipsaw—please do not interpret the price path as a forecast, though it could by some luck work out that way. The price path is a hypothetical illustration showing what sorts of moves could occur post earnings. Lastly, please note that although this post is designated as "short," that is the long-term view. The short-term view remains bullish until price reverses. SquishTrade prefers not to fight bear rallies but allow them to unfold until their natural ending. Finding that bear rally top for a good short is everyone's dream, though it's not particularly realistic. But no need to do so—the money can be made more consistently by catching a good piece of the next trend move rather than trying to squeeze every last penny from top to bottom (or bottom to top), which often and inevitably results in capital loss. Thanks for reading. ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
NASDAQ:NVDAShort
by SquishTrade
15
BTC: Bulls Have Only Taken a Pawn from BearsPrimary Chart: Daily Logarithmic Chart with Anchored VWAPs, Fibonacci Levels, and Trendlines BTC bulls seem ecstatic today after BTC broke above an intermediate-term trendline (shown in red on the Primary Chart). While this breakout could retest (or whipsaw), the likely result is that it could be a short-term positive, leading to one of two price paths in the very short term: (1) more sideways action, or (2) more another rally attempt. But calling this a major trend reversal is misleading. It's as though bulls are calling "checkmate" when they have merely taken a pawn from the bears after bears have taken several key chess players (a couple knights and a rook and four pawns since the all-time high). Of course, it could be the start of a major trend reversal—no one knows the future, and nothing is ever guaranteed in markets. But with inflation remaining sticky and failing to cool, with central banks remaining aggressive and hawkish, with the money supply tightening, and interest rates remaining elevated across the curve, does this look like a time when risk assets are set to run to all-time highs again? Common sense says that this is a bear rally just as with equity indices. Sure, bear rallies should be respected, perhaps even traded. They should not be shorted blindly until confirmation is given of exhaustion and reversal lower. The irrationality of markets is analogous to July 2022, when the Fed chair spoke at the presser and market participants misinterpreted the message as a "pivot" only to find out later in August 2022 at the Fed's speech at Jackson Hole that they were badly mistaken. Even if a 50 bps rate hike occurs in December 2022, this should not be viewed as a pivot. It's a slowing of increases in the benchmark rate—not only are rates being held high, they are continuing higher albeit at a less rapid pace. And there is no guarantee that the work already done will quickly bring inflation back towards the 2% target of the US central bank. Yes, a minor DT line from May 2022 was taken out today. It's like a pawn on the chessboard. But there are still many bearish knights, bishops and rooks remaining. A few of the resistance levels above this down TL are shown on the chart. All of them cannot be identified without confusion. But it shouldn't be a surprise if a few more key resistance levels are taken out as price goes higher in the short-term. At some point in the coming months, the higher likelihood is that price will exhaust and the larger trend structure that remains valid should turn price lower again. Here are a few of the levels that lie overhead with which price must content despite breaking a minor down TL today: 1. VWAP from June low = 20,738 (purple) 2. the .50 R of the recent decline = 21,684 3. the .618 R of the recent decline = 22,516 4. long-term Fibonacci level (.382 R) = 22,911 5. the .786 R of the recent decline = 23,702 6. VWAP from 3/29 = 25,708 (teal) 7. Major resistance / supply zone = 25,000 - 26,000 8. Major downward trendline from all-time highs (orange) = $26,500 (and decreasing as each day passes given its slope) 9. VWAP from the all-time high (red) = 33,500 (and decreasing as well) Please also check out this analysis from a few days ago discussing the rally and identifying many of the same resistance levels mentioned in this post. ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
BITSTAMP:BTCUSD
by SquishTrade
26
S&P 500 (SPX) May Stall Next Week in Its Bear RallyPrimary Chart: Fibonacci Levels, Key EMA, and Uptrend Channel off Lows S&P 500 (SPX) has bounced hard off its lows on October 13, 2022, the date the CPI was released. Although price has chopped and whipsawed, it has been steadily working its way higher. But choppy price action is not without a purpose in technical analysis: it can help identify the direction of the larger degree of trend because it typically runs countertrend to the larger-degree trend. Impulsive price action, by contrast, tends to powerfully impel price in the direction of the trend. Because corrective action moves against the trend, it tends to struggle to proceed in that countertrend direction. So the fact that price has been choppy as it moves higher suggests that the larger-degree trend remains downward. This post does not suggest that SPX or any other equity index has seen a final and lasting low. The bear market remains in effect until the larger-degree structure materially changes. That has not happened. SPX may rally, however, into the coming week. In this rally, the levels to be watched on the upside (resistance) include the following: 380 is a major Fibonacci cluster of levels (more precisely, the two levels are 379.92 and 380.05). 375.45 is the prior swing high on October 18, 2022, the highest point so far in the rally off October 13, 2022, lows. 372.41 is a key Fibonacci level at the .382 retracement of the second leg of decline from September 12 to October 13, 2022. 368.42 is a key Fibonacci level and it has also been a key level of resistance where gaps have occurred as well as actual price rejections over the past several weeks. 370.00 is a key options gamma hedging level that may have an effect through Friday, October 21, 2022. 366.47, 366.73 are the levels for the 21-day and 34-day EMAs as of October 20, 2022. Price targets for this bear rally are at first 375 SPY. Only if 375 SPY can be reached and successfully held, then the next higher target comes into effect. The next higher target is 380 SPY, which correlates to about 3810 on SPX, the ticker for the actual S&P 500 index. The VWAP anchored to the major swing high in mid-August 2022 is currently at 383 SPY. But this VWAP is sloped downward, and will likely continue falling, albeit less sharply, over the next few days. This VWAP likely will coincide with the key Fibonacci cluster at 380 sometime next week. This anchored VWAP is shown in orange in the following chart: Supplemental Chart: VWAP Anchored to mid-August 2022 High On Tuesday, price began to pull back from its October 18, 2022, swing high at 375. So the levels to be watched on the downside (support) include the following: 364-365 is an important area of support in the coming day or two at the lower bounds of the parallel channel off the October 2022 lows. This level of support rises over time given that the line is sloped, so the support is dynamic. Given the direction of futures overnight, the 364 SPY level may likely be tagged before further upside can take place. 362.34 is a major Fibonacci retracement level applied to the range from the October 13-18 rally. 359.25 is the .618 Fibonacci retracement level applied to the range from the October 13-18 rally. 356.64 is both major price support from September 30 and October 10-13, 2022, but also a Fibonacci level. Below this level would strongly suggest that the bear rally is finished and new lows will be made. Despite price moving higher and bouncing quite sharply off the October 13, 2022, low, it's important to note that the macroeconomic and monetary policy environment remain negative for equities and risk assets. CPI and PPI in the US, two widely considered measures of inflation, both came in hotter than expected in October 2022. Fed Funds Futures are continuing to price in a 75 basis-point hike at the FOMC meeting that concludes on November 2, 2022. In two other bear markets in the past 22 years, the US central bank was busy cutting rates to stimulate the economy and mitigate recession. Now, by contrast, the Federal Reserve and other central banks around the world are hiking rates to try to negate sticky inflation that has hit levels not seen for decades. Finally, because this is a bear rally, by definition countertrend, price can fail at any time. Any trades are likely lower probability bets given that the primary trend has been powerful since January 4, 2022's all-time high, and especially since the August 16, 2022, peak. ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
AMEX:SPY
by SquishTrade
11
How Many Times Will BTC Get Rejected?Primary Chart: Fibonacci Channel and Fibonacci Retracements for June-August 2022 Rally The bear market cannot be finished even if a bear-market rally happens tomorrow that leads BTC above its 11-month trendline. Dip buyers keep jumping in to "find the bottom." The five stages of a bear market include denial, anger, bargaining, depression, and acceptance . Could crypto and equity markets still be in denial? Or have markets moved to the third stage of bargaining? With all the talk of "double bottoms," in both equities and crypto, perhaps the current stage is "bargaining." Why? By framing the current selloff in this bear market as a "double bottom," market participants show that they are trying to cast the current ugly decline in a positive light. A double bottom, after all, is a pattern that implies a powerful rally after the second bottom, where the rally eventually exceeds the peak between the two bottoms and continues thereafter once confirmed. So all the banter about double bottoms shows that a lot of bullish hopes still have not been crushed. The end of a bear market, by contrast, evidences the fourth and fifth stages of bear-market grief, which is depression and acceptance (capitulation). Given how dip buyers keep swooping in to buy at each low despite the numerous rejections at trendline resistance levels (see the Fibonacci Channel on the Primary Chart), capitulation has not yet occurred. Price action today, September 30, 2022, came very close to the 11-month downward trendline. Price rejected before actually tagging this line. But will it break the 11-month trendline in the coming weeks? Why should this time be any different than the all the other rejections since its all-time high? No one knows for sure, but if 11 months of history is any guide, the odds favor lower prices even if a whipsaw break of the multi-month trendline occurs. Trendlines can break, and technical experts say that a broken trendline does not automatically equate to a trend reversal. Instead, it often leads to either (1) a sideways trend, or (2) a continuation of the trend at a different angle of descent. Many asset classes have now undercut June 2022 lows including major equity indices such as the S&P 500 ( SP:SPX ) and the Nasdaq 100 ( NASDAQ:QQQ ). It seems likely that BTC can fight the tide (breaking June 2022 lows) only so long. Or is something else holding the price sideways for the past two weeks? This author primary relies on technical, rather than fundamental, analysis. So any readers who wish to add a fundamental perspective in the comments (even if it runs contrary to this view) are welcome to do so. Supplementary Chart A: Nasdaq 100 Undercut June 2022 Lows The current consolidation can also be framed as a right-angled triangle. Right-angled triangles do not have to break in the implied direction that the sloping side of the triangle suggests. Price never has to do anything traders or technical analysts say. But right-angled triangles often do break in the direction of the sloping trendline—whether the sloping trendline is the upper edge or lower edge of the triangle. This has lead to their classification as a pattern that does imply a directional move once the consolidation completes. Right-angled descending triangles, such as the one shown in the post below, tend to break to the downside. The triangle shown below is nearing its end, or "apex." This implies that a directional breakout should soon occur giving relief to either the bears or the bulls, or perhaps frustrating them both with a whipsaw move. Supplementary Chart B: Right-Angled Triangle Reasonable downside targets have been discussed thoroughly in the related BTC posts linked below. ________________________________________ Author's Comments: (1) Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate in the comment section. Shared charts are especially helpful to support any opposing or alternative view. (2) This technical-analysis view does not constitute a trade recommendation or trade setup. Instead, it attempts to offer technical commentary that describes and analyzes price levels, trends, price action, or the broader technical environment as of the publication date. Technical-analysis commentary does not equate to trade setups or recommendations. Within a given price environment, traders bear responsibility for their own trading strategy, risk tolerance, and time frame, and for any due diligence associated with such trades. (3) This technical-analysis viewpoint could change at a moment's notice, e.g., when price violates a key level of invalidation for a particular view. Further, proper risk-management techniques are vital to trading success. (4) To the extent countertrend price moves are discussed, consider that countertrend or mean-reversion trading, e.g., trading a rally in a bear market, remains higher risk and lower probability even for the most experienced traders and investors. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified / licensed financial adviser or other financial or investment professional before entering any trade, investment or other transaction.
BITSTAMP:BTCUSDShort
by SquishTrade
15
MATIC Remains Stuck Between a Rock and a Hard Place Primary Chart: MATIC Price Chart Showing Overhead Supply Zones and Fibonacci Retracements MATIC Network Shows Strength in Recent Months Despite Being in a Bear Market As shown in the Primary Chart above, MATIC network's price continues to trade well below all-time highs of $2.92 / USD. No argument can be made that it has overcome its bear market just yet. Further, the flag / parallel channel that contained price for much of the rally off the mid-June lows has been broken to the downside (see Primary Chart above). Even so, MATIC has shown strength in the past two months since its June 2022 lows. Consider the chart below that shows MATIC having broken out above a downward trendline going back to all-time highs. Supplementary Chart A: MATIC's Breakout above Seven-Month Downward Trendline But despite showing strength in recent months, especially as compared to BTC and ETH, MATIC has been trading below major overhead supply zones that reach back over one year to August 14, 2021. The lower of these two supply zones zones was touched several times in late July and mid-August 2022, with a rejection back below it each time. See Primary Chart (above). MATIC also has a demand zone just below its current price. That demand zone is shown as a teal-blue rectangle in Supplementary Chart B below. Supplementary Chart B: MATIC's Demand Zone as Support An argument might be made that intermediate-term trading lows have been established at the June 2022 lows. Such an argument would be based on the measured-move concept, where the two legs of a corrective decline are equal or nearly so. In the Supplementary Chart C below, notice how wave A and C of a major A-B-C decline from all-time highs to the June 2022 lows have equality around the $.48 level. Price traded to this level, and broke below it somewhat, before reclaiming it in a reasonable amount of time. Supplementary Chart C.1: Measured-Move Showing Potential Intermediate-Term Trading Low Note that just because a measured move target has been met does not mean a correction is complete. Consider, for example, Supplementary Chart C.2 below, which is not a forecast or technical-analysis based price projection. It merely shows a manner in which a corrective pattern can continue upward in a bear market, consistent with complex Elliott Wave corrective patterns, and can continue higher for some time before resuming lower to retest or break the lows. Supplementary Chart C.2: Hypothetical Example of Complex Corrective Pattern Continuing Higher from Measured-Move Low Before Retesting Lows Later Despite substantial weakness in equity markets and crypto markets since mid-August 2022, MATIC has not shown sufficient weakness just yet to cause it to fall anywhere near its YTD lows at $.316. In fact, unlike other cryptocurrencies such as BTC and ETH, MATIC has not broken and held below its .382 retracement of the June-August 2022 rally. On the Primary Chart above, note how MATIC has found strong support multiple days right at its .382 retracements. BTC and ETH have not found similar support at their .382 retracement of the recent rally. In fact, BTC has crashed through all its key Fibonacci retracements including the .618 retracement around $20,488.65 and has held below this level (see Supplementary Chart D.2 below). This comaprison shows MATIC's relative strength since the June 2022 lows as compared to BTC and ETH. Supplementary Chart D.1: ETH Has Broken Through Its .382 Retracement and Has Held at .50 Retracement Supplementary Chart D.2: BTC Has Broken Through All Its Key Retracements and Has Held below its .618 Retracement Conclusion: MATIC Network Remains Stuck Between a Rock and a Hard Place So MATIC is stuck in chop between a rock and a hard place. The rock is the substantial overhead resistance, and the hard place is what appears to be just a few supports standing between price and bear-market lows. A weekly Ichimoku Kinko Hyo (Ichimoku) chart shows just how difficult the resistance is despite incredible price strength in recent months. The cloud remains very thick overhead and red colored and even thicker in the near future, signs of formidable resistance in downtrend. The Kijun line (blue) also stands as strong resistance in addition to the other resistances mentioned in this post. This line decisively repelled price in mid-August 2022. Supplementary Chart E: Weekly Ichimoku Kinko Hyo Chart Note the small twist in the Weekly Ichimoku cloud above, however, which suggests a possible weakness in overhead resistance where a rally could theoretically break above the cloud more easily under Ichimoku analysis principles. But the odds of this occurring in the current macroeconomic environment seem bleak at best. Nevertheless, markets do tend to move in unexpected ways, and this twist in the cloud should be monitored in October 2022 to see whether it holds any glimmer of hope for a break back above the weekly cloud. The weekly Kijun must be conquered first, though, and until price can rise above the Weekly Kijun, all talk of a break above the weekly cloud remains premature. The daily cloud offers a little better picture for the trend in the intermediate term. Price remains above a green-colored cloud that slopes upward ever so slightly. But again, this is insufficient to change the bear-market trend, though it is a necessary first step. Even on the daily chart, price has fallen back below the Kijun line at $.90, and price has also pierced back into the cloud itself, a sign of weakness. Resistance seems to arise to current price action from the top edge of the cloud, called the SSA line. Supplementary Chart F: Daily Ichimoku Kinko Hyo Chart Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction. ___________________________________________________________________ BINANCE:MATICUSDT COINBASE:MATICUSD KUCOIN:MATICUSDT BINANCE:MATICUSD KRAKEN:MATICUSD BINANCE:ETHUSDT BITSTAMP:ETHUSD COINBASE:ETHUSD KRAKEN:ETHUSD CME:ETH1! CME:BTC1! BITSTAMP:BTCUSD BINANCE:BTCUSDT BYBIT:BTCUSDT KRAKEN:BTCUSD COINBASE:BTCUSD
M
by SquishTrade
3
SPX Approaches a Confluence of Resistance Levels at 3850Primary Chart: Fibonacci Levels, Symmetrical Triangle Broken in September 2021, Anchored VWAP , and Downtrend Line On September 21, 2022, SPX's had a breakout to the downside from a multi-month symmetrical triangle pattern. This pattern was discussed in a post prior to the breakout. But when price breaks out of technical patterns, price sometimes tends to backtest or retrace back to the very same pattern that led to the breakout. In other words, the breakout occurs with a directional move in earnest only to reverse and retrace back to the pattern or level that price had broken. In the case of SPX's symmetrical triangle, it appears that a retracement to backtest this triangle's trendline can reasonably be expected. The powerful bounce of the YTD low at 3584.13 appears to have begun with two consecutive rally days with very strong breadth readings. Furthermore, important technical levels can often draw price in like a magnet when price starts moving in their vicinity. A confluence of important levels arise in the area around 3850 SPX. Such levels are shown on the Primary Chart above. They include the following: VWAP anchored to the lows of the pandemic crash in March 2020, which currently is at SPX 3856.64 Fibonacci retracement levels at SPX 3851, 3867, 3899, and if price can exceed those levels on a close, 3914.85 major resistance zone that has served as both support and resistance since June 2022 at SPX 3885 to 3920 upward trendline from June 2022 lows that also served as the lower trendline of a symmetrical triangle with price at 3830-3860 over the next 5-8 trading days downward trendline from August 16, 2022, swing highs that run right through this confluence zone in the next week or so 34-day EMA at 3870 as of October 4, 2022, which is shown on Supplementary Chart D at the end of this post A few other Fibonacci levels are shown on the intraday price chart below. They show similar levels to the levels discussed above, with a lower level at SPX 3819.57, which is the 1.272 Fibonacci projection of the first leg of the rally off the September 30, 2022, low, as projected from the start of the second leg of the same rally. This chart also another level at 3859.09, which is the 1.618 Fibonacci projection using the same starting and ending points as the 1.272 projection. Supplementary Chart A: Fibonacci Projections from within Current Rally Off Lows Price may pull back a bit before reaching these targets to consolidate the impressive gains from the past two days. An intraday divergence has already appeared on the 30-minute RSI for SPX. This divergence could easily be erased. Or a further divergences could appear as price pushes a bit higher before consolidating some of the past week's gains. Supplementary Chart B: RSI for SPX on 30-Minute Chart What happens next? Breadth had gotten extremely poor at the lows last month. The percentage of SPX stocks below their 20-day moving average was at similar lows to June 2022 and March 2020. The blue rectangle on the chart below shows how only three negative breadth readings have approached that area in the past 2.5 years: March 2020 lows, June 2022 lows, and September 2022 lows. See Supplementary Chart C. Supplementary Chart C: Extremely Negative Breadth Readings from September 2022 Compared to June 2022 and March 2022 Breadth Readings However, the trend in equity indices remains downward, and until the structure changes, the odds favor trend continuation over trend reversal. But a continuation of the rally makes sense at least in the short term. And the levels discussed can be watched, and as each level is reclaimed, the next level or set of levels can be evaluated. Lastly, the 34-day EMA was discussed earlier in this post but was not shown on the Primary Chart. It appears below. As each day passes, this value could change to some extent. Supplementary Chart D: 34-Day EMA at SPX 3870 as of October 4, 2022 ________________________________________ Author's Comments: (1) Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate in the comment section. Shared charts are especially helpful to support any opposing or alternative view. (2) This technical-analysis view does not constitute a trade recommendation or trade setup. Instead, it attempts to offer technical commentary that describes and analyzes price levels, trends, price action, or the broader technical environment as of the publication date. Technical-analysis commentary does not equate to trade setups or recommendations. Within a given price environment, traders bear responsibility for their own trading strategy, risk tolerance, and time frame, and for any due diligence associated with such trades. (3) This technical-analysis viewpoint could change at a moment's notice, e.g., when price violates a key level of invalidation for a particular view. Further, proper risk-management techniques are vital to trading success. (4) To the extent countertrend price moves are discussed, consider that countertrend or mean-reversion trading, e.g., trading a rally in a bear market, remains higher risk and lower probability even for the most experienced traders and investors. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified / licensed financial adviser or other financial or investment professional before entering any trade, investment or other transaction.
SP:SPX
by SquishTrade
10
BTC Likely to Test June 2022 Lows SoonToday saw volatile, whipsawing price action in both cryptos and equity indices. BTC was no exception. As discussed in an article on September 19, 2022 at the start of this week (see link in the Primary Chart above), the US Federal Reserve Open Market Committee (FOMC) has held their September 2022 meeting on Tuesday and Wednesday this week. This meeting concluded today with a presser at 2:00 p.m. EST in the US. The hawkish monetary policy that has been fostered by the FOMC has put pressure on risk assets for much of this year. Federal Reserve Chair Jerome Powell clearly stated that monetary policy would continue to remain restrictive and tight for quite some time until inflation comes down toward its 2% target. The Federal Reserve, along with other central banks around the globe, have been attempting to tackle sticky inflation. Inflation has been the number one problem in developed countries from a macroeconomic perspective, and it has been running at high levels not seen in decades. Though some argue that inflation may have peaked, and there are good arguments for this conclusion, it remains sticky and well above central banks' targets, which in the US is 2%. The Primary Chart above links to other recent posts on BTC where key levels are discussed in more detail than in this post, especially the downtrend line and key Fibonacci levels. After the FOMC presser, it appears that BTC is heading quickly to test June 2022 lows. BTC failed in its breakout attempts over the summer as to key levels. This is discussed in the prior posts linked in the Primary Chart above. In the most recent post regarding levels to watch this week, .786 retracement of the summer rally was identified as a key one to watch. Price chopped around this level with two failed breakout attempts. These failed breakouts are similar to the failed breakouts as to other key Fibonacci levels as well discussed in the linked recent posts. Supplementary Chart A: Failed Breakouts This Week over .786 Retracement Level Given these failed breakouts, combined with the failure on September 13, 2022, at the major downtrend line resistance, BTC is likely headed to test June 2022 lows soon. First it must violate the lows from earlier this week at 18,271. A successful violation of this level will lead directly to June 2022 lows. After that, some of the Fibonacci Channel lines can be considered as subsequent targets. Please also see the update by @Tradersweekly posted in the link below, which covers volume and some additional resistance levels based on multi-year price peaks. This article is highly recommended for a complementary but slightly different perspective on BTCUSD. ________________________________________ Please note that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for this week. Also note that countertrend trading, e.g., trading a rally in a bear market, is tricky and challenging even for the most experienced traders. Countertrend trades are lower probability trades as well. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
Short
by SquishTrade
2
NDX / QQQ Supports That May Spark the Next Bear RallyPrimary Chart: 11-Month Downtrend Lines, Support at June and September 2022 Lows Forming Right-Angled Triangle, Fibonacci Levels The Nasdaq 100 ( NASDAQ:NDX or NASDAQ:QQQ ) has been in a sharp downtrend nearly all year with intermittent bear rallies that have been sharp and powerful. A week ago, despite price having already fallen significantly from August 16, 2022 peaks, this author identified the likelihood that the downtrend would continue even further to short-term targets at $269-$270. (More aggressive targets in a range from $254 to $267 were also identified in the September 2022 post, but those have not been reached yet.) Now that price has fallen almost exactly to the June 2022 lows, a support line across those lows can be drawn—and this support level intersects with the downward trendlines (there are two alternative downward trendlines on the Primary Chart). When these two support levels intersect with the downward trendlines, a right-angled triangle is formed. This is also known as a descending triangle. Because this is a multi-month triangle, it may not break easily; however, this bear market has broken conventional expectations repeatedly, so anything is possible. But price could make more than one attempt to break the lower edge of the triangle before succeeding. The next chart shows one such possibility. Note that there are many possibilities, and this remains just a single hypothetical price path that reflects the concept that horizontal line of a multi-month right-angled triangle might not break on the first attempt as lesser supports can. Supplementary Chart A: Right-Angled Triangle with Hypothetical Price Path Involving Whipsaw Break Before a Successful Break Later in the Year This hypothetical possibility does not make the chart bullish. It just recognizes that price action can work to confound bears and bulls alike. And it acknowledges that price can reach oversold extremes right at critical multi-month supports, which may require two or more attempts to break. Whipsaws are not uncommon on both intraday and longer-term time frames. Even though the NDX / QQQ remains within a strong downtrend, the sharp rallies this past year have shown that even the bears have to be ready for anything. Bears anticipating a straight line lower can get annihilated. The lower edge of this right-angled triangle is also right at multi-year support identified in the above-referenced post published September 22, 2022. Like a multi-month triangle, multi-year support may not break on the first attempt. Or if it does break in the next week, the first break may end up being a whipsaw break, that leads to price recovering back above the support (and lower edge of the triangle) to rally or chop further until the final break, which could be weeks or months away. Supplementary Chart B: Multi-Year Support Level (Blue Rectangle) The .618 retracement level is another level of interest that could hold and spark another bear rally. This level is the yellow line on the next chart, and it lies at $258 on QQQ. Another Fibonacci level has confluence with the .618 R, and lies just beneath it (teal blue). Supplementary Chart C: Two Circles Identifying Target Zones That Could Spark the Next Bear Rally ________________________________________ Author's Comments: (1) Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate in the comment section. Shared charts are especially helpful to support any opposing or alternative view. (2) This technical-analysis view does not constitute a trade recommendation or trade setup. Instead, it attempts to offer technical commentary that describes and analyzes price levels, trends, price action, or the broader technical environment as of the publication date. Technical-analysis commentary does not equate to trade setups or recommendations. Within a given price environment, traders bear responsibility for their own trading strategy, risk tolerance, and time frame, and for any due diligence associated with such trades. (3) This technical-analysis viewpoint could change at a moment's notice, e.g., when price violates a key level of invalidation for a particular view. Further, proper risk-management techniques are vital to trading success. (4) To the extent countertrend price moves are discussed, consider that countertrend or mean-reversion trading, e.g., trading a rally in a bear market, remains higher risk and lower probability even for the most experienced traders and investors. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified / licensed financial adviser or other financial or investment professional before entering any trade, investment or other transaction.
NASDAQ:QQQ
by SquishTrade
6
NDX / QQQ Resumes Downtrend But Approaches Multi-Year SupportPrimary Chart: Several NDX / QQQ Trendlines and Multi-Year Support Zone at $254-$267 SUMMARY : The downtrend has resumed since the consolidation pause in the days leading up to the FOMC presser on September 21, 2022. Shorter-term targets include June lows at $269-$270, and if June lows are violated, the next target range is $254-$267 on QQQ, which equates to $10,720 to $11,000 on NDX. This target range is supported by Fibonacci projections as well as a multi-year zone of support, which could lead to an interim (temporary) low. Importantly, watch for any undercut of the June 2022 low, and watch for a failed breakout below that level of support—which could lead to another countertrend rally or a period of sideways chop. The bear rally in July and August 2022 had even the bears scratching their heads with their tired paws—"tired" because this year has been anything but an easy ride for bears and bulls alike. In July and August 2022, AAII sentiment even showed some bears took off their furry suit and put on some horns, as the number of bears dropped as price continued to rip higher. But the more steadfast and patient bears were rewarded yet again after the August 16, 2022 peak. In the end, the entire summer's rally was a mirage, a rally that drew in many thinking the worst was finished. This is common in bear markets, with bear rallies in the Nasdaq in 2002 ripping 30-60% higher over weeks, and sometimes months. But now, the Nasdaq 100 NASDAQ:NDX NASDAQ:QQQ has resumed its downtrend decisively since the August 16, 2022, swing high. Every time a multi-day rally has appeared, sellers have pounced to flood the market with supply, sending the NDX / QQQ back on its downward path. The next target from a purely technical perspective appears to be the multi-year zone of support near $254/$255 up to $267 on QQQ, which equates to approximately $10,720 to $11,000 on NDX. This is not far below where price traded today. The Nasdaq 100 closed at 11,501.66 / QQQ at $280.07. This zone of support is also supported by Fibonacci analysis. Fibonacci projections show conservative targets for this leg of the decline around $255.68-$267.53 (Supplementary Chart A), which closely align with the multi-year zone of support (shown on the Primary Chart). Supplementary Chart A: Fibonacci Analysis with Projections Based on Structure of the Current Decline from August 2022 Highs Supplementary Chart B: Fibonacci Channel Showing Potential Target Assuming Bear Market Continues into Next Year The Fibonacci Channel is plotted on a logarithmic chart going back 22 years to 2000 approximately, and the lows in the 2000-2002 bear market. Coincidentally, the $228 price level at the 2.00 line coincides with the longer-term trendline support at about $225-$230 early next year —shown on the Primary Chart as the upward trendline, the lowest trendline on the chart. ________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. Please note further that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for the near term. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. And countertrend or mean-reversion trading, e.g., trading a rally in a bear market, is lower probability and is tricky and challenging even for the most experienced traders. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
NASDAQ:QQQShort
by SquishTrade
8
ETH: The Downtrend Has Resumed, Lows Will Be RetestedPrimary Chart: Bollinger Bands and Fibonacci Channel with Key Support Zones HighLighted Summary: The path of least resistance continues to be downward. Key support levels were broken just above at 1319 and 1455, which are now resistance. Bollinger Bands are widening, signaling a trend move in the coming week. After a whipsaw move to the upper band, price is now persistently walking the lower band. An oversold bounce could occur intraday at any time, but within a few weeks (perhaps days depending on the volatility in markets overall), price may reach a conservative target of $1100-$1126. The more aggressive target is a range from June 2022 lows at $880 up to $1027 . On August 27, 2022, a technical-analysis post on ETH (linked in the above chart on the August 27 price bar) noted that ETH's response to support levels would offer clues as to when the downtrend would resume. The relevant specific support levels shown on that date were $1455 and $1319, which are key Fibonacci retracement levels. Both these levels have now been broken to the downside. The August 27, 2022 post also discussed the following, which were applicable at the time: "Technicals do not provide an answer about whether the intermediate-term or long-term trends have reversed from this year's bear market. They do, however, help see that the near-term path of least resistance is somewhat lower. And they give us price levels and zones to watch to help determine what ETH's next move may be. And such levels may also help traders analyze whether the multi-week uptrend from June 2022 lows will continue further or whether it will be deemed a powerful bear rally within a remarkable downtrend." Now that these two specific technical levels have been violated to the downside, the conclusion that the near-term path of least resistance is lower has now been strengthened and confirmed. The August 27, 2022, post also noted that momentum in the short-term, as measured by RSI and two EMAs, was bearish. This continues to hold true. See the updated RSI chart below (daily). Although ETH had a bit of a rally in the first half of September surrounding its merge, RSI remains bearish. The last major RSI peak occurred on September 10, 2022. Compare this peak with the July 18 and August 13, 2022, peaks in RSI, and one can see that the final rally in September had waning momentum compared to earlier rallies over the summer. Further, momentum remains weak for ETH, and a new low was just made as the prior RSI low from late August 2022 was broken to the downside. But RSI should be watched—if the selling intensifies—for OS levels nearing the extremes from prior tradeable / interim lows this year. Supplementary Chart: RSI for ETH on the Daily Chart Finally, key moving averages such as the 8-day and 21-day EMAs remain bearishly sloped and stacked. This removes the need for talk of reversals and price predictions. As long as the 8-EMA is sloped downward, the path of least resistance continues to be downward. ________________________________________ Please note that this technical-analysis viewpoint is short-term in nature. This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for this week. Also note that countertrend trading, e.g., trading a rally in a bear market, is tricky and challenging even for the most experienced traders. Countertrend trades are lower probability trades as well. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
KRAKEN:ETHUSDShort
by SquishTrade
7
BTC: What to Watch Going into US FOMC Presser This WeekThe US Federal Reserve Open Committee (FOMC) meets Tuesday and Wednesday this week. The hawkish monetary policy that has been fostered by the FOMC has put pressure on risk assets for much of this year. The Federal Reserve, along with other central banks around the globe, have been attempting to tackle sticky inflation that has been running at high levels not seen in decades. Though some argue that inflation may have peaked, it remains sticky and well above central banks' targets, which in the US is 2%. The Primary Chart above shows key levels to watch going into the FOMC presser. The downtrend line in blue, which is the zero line of the Fibonacci Channel, rejected price decisively on September 13, 2022. But with an important trendline such as this one, a retest of the line is not uncommon, similar to what occurred where BTC tested this line from March 28 to April 5, 2022 repeatedly before finally resuming the downtrend. This occurred at the end of BTC's powerful bear rally in March 2022 that coincided with equity indices' rally during that time. The area of resistance that could be tested should price rally or whipsaw higher this week is between $19,900 and $21,416. The Primary Chart uses a yellow-colored ellipsis shape to capture the strong, dynamic resistance levels of this down trendline. The Fibonacci Channel also shows the parallel diagonal lines that run at Fibonacci proportions to this downtrend line, which also should be watched for price support in the coming weeks. The Primary Chart also shows the key Fibonacci retracements of the entire summer rally. BTC has been holding just above its .786 retracement of the mid-June to mid-August 2022 rally. This level lies at $19,246, and price has made a couple attempts to break below it, each of which has failed, suggesting more sideways chop into the FOMC's meeting. The .618 retracement of the summer rally is at $20,521, a level that should also be watched closely. BTC struggled to get above this level in June and July with two failed breakouts. Finally, after getting above this line, BTC began declining and fell back below it after its mid-August 2022 peak. BTC attempted one more rally above it in early September 2022, but this ended up as a failed breakout, another bearish signal along with the downtrend line. In addition to the levels shown on the Primary Chart above, the Supplementary Chart below shows shorter-term Fibonacci levels that also may become relevant this week. Considering that this decline from September 13 to September 19, 2022, may be a completed wave 1 of some larger Elliott Wave structure, it becomes important to consider the retracements as places where the current corrective wave could reverse. These levels are $19,993, $20,526 (coinciding with the other .618 retracement level shown on the Primary Chart at $20,521), $21,058, and $21,815. Supplementary Chart A: Fibonacci Retracements of September 13-19 decline Given the impact interest rates—and tightening financial conditions—have had on risk assets, it may be prudent to also watch interest rates closely. For this purpose, see the 10-year yield chart below. Supplementary Chart B: Current Uptrend in US 10-Year Yield (TNX) and Multi-Year High Reached The 10-year yield has shown no signs of slowing down yet. It continues to push higher, holding its short-term upward trendline from around the start of August 2022 until the present. The longer-term uptrend line has remained in effect for 2.5 years since March 2020. Note also that the 8-day EMA has held as support along with the shorter-term steep upward trendline. Until this line breaks, it is unlikely that crypto assets and equities can make substantial progress toward reversing their current bearish trend structures. For the curious, another chart showing the correlation coefficient between BTCUSD and TNX is shown in the final chart below. This shows that for most of 2022, the relationship between BTC and interest rates has been inverse. Many probably already have known this intuitively while reading news about increasing rates to combat inflation while simultaneously witnessing bear markets across most risk assets this year. This correlation coefficient has at times reached -.64 and -.68, showing fairly high levels of inverse correlation, which means that as yields push higher, BTC has fallen lower. This level has also dropped to lower levels of inverse correlation. Currently, the coefficient is at -.49. Supplementary Chart C: Correlation Coefficient for BTCUSD and TNX (Weekly Chart) ________________________________________ Please note that this technical-analysis viewpoint is short-term in nature . This is not a trade recommendation but a technical-analysis overview and commentary with levels to watch for this week. Also note that countertrend trading, e.g., trading a rally in a bear market, is tricky and challenging even for the most experienced traders. Countertrend trades are lower probability trades as well. This technical-analysis viewpoint could change at a moment's notice should price move beyond a level of invalidation. Further, proper risk-management techniques are vital to trading success. Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction. BITSTAMP:BTCUSD CME:BTC1! BINANCE:BTCUSDT
by SquishTrade
28
BTC in a 4-Hour Squeeze Just Above Make-or-Break Support Levels Primary Chart: BTC's Key Fibonacci and Measured Move Levels along with Key Demand Zone BTC continues to trade just above make-or-break levels as it has for much of this week. It continues to chop up and down, similar to the way equity indices have the past few days. Chop essentially entails price action within a range without any directional follow through. Traders tend to get chopped up because the price action starts to move in both up and down, but each time, follow-through does not happen. The squeeze is a Bollinger Band phenomenon where the bands compress to a narrower range. In other words the standard deviation decreases dramatically, reflecting reduced volatility. Both the 2-hour and 4-hour charts for BTC show that compression typical of a standard-compression squeeze. Because compressed volatility tends to correlate with a subsequent increase in volatility, squeezes help signal when significant directional move may occur. Supplementary Chart A shows the Bollinger Bands squeeze on the 4-hour chart. Supplementary Chart B shows the levels containing this weeks consolidation, where a breakout will signal the start of the directional move implied by the squeeze. Supplementary Chart A: Bollinger Bands Squeeze on 4-Hour Chart BTC's Immediate Resistance Levels at $20,503 to $21,403 On the Primary Chart, note the two major resistance levels above price, which are the green and golden lines. These are Fibonacci-based retracements of the entire rally from June 2022 lows to mid-August 2022 highs. The .618 retracement is the closest resistance level that must be reclaimed before price can resume its corrective rally higher. This .618 retracement is at $20,503. Above that, and the target is $21,403, the .50 retracement, which also coincides with the August 20-26, 2022, consolidation period. Note this 21,400 level also aligns with key lows and highs from both June and July 2022—these price resistance levels are shown on the Primary Chart by the two white parallel lines adjacent to the green .50 retracement line. The .618 retracement level at $20,503 also aligns with the top of this week's consolidation range. See the Supplementary Chart A below, showing the consolidation range from this week by parallel white lines. BTC's Immediate Support Levels Are Close Below at $19,134, $19,233 and $19,555-19,560 The base of this week's current consolidation (see Supplementary Chart B below) serves as the most immediate support level for BTC. While the upper edge of this range marks the most immediate resistance, which coincides with the .618 retracement (the gold line on the Primary Chart), the lower edge of the consolidation is approximately $19,555 to $19,560 as shown in the supplementary chart below. Any breakout from this current consolidation range will help dictate the course of BTC's price action the next couple weeks. A decisive break to the upside is a possibility, especially where traders and investors have been leaning quite bearish, a factor that can often provide some support, ironically, to price—because selling can dry up when everyone that is bearish has sold or shorted, and when price doesn't move downward, short covering can begin to put upward pressure on price. Support also lies at $19,223, which is the .786 retracement of the entire rally from June 2022 lows to August 2022 highs. This level is associated with another Fibonacci level at $19,134, the .618 proportion of the first leg of decline from the August 15, 2022, peak as projected from the start of the second leg of the decline on August 26, 2022. Supplementary Chart B: BTC's Consolidation Range This Week BTC's Measured-Move Zone at $16,238 to $17,443 The measured-move area, which also uses some Fibonacci proportions, shows where BTC could in theory fall assuming the decline continues. This area is a zone between $16,238 and $17,443. This post does not make a prediction about whether the measured-move target will be hit in the near term. Instead, the measured-move levels are identified as merely a possible price path using technical analysis. But before this measured-move target can become a plausible possibility, a downward breakout from this week's consolidation must occur. Furthermore, the .786 retracement at $19,223 must be violated as well as the teal blue rectangle showing the last three-month demand zone (Primary Chart above) before the measured-move target can be considered. CME:BTC1! AMEX:BITO BINANCE:BTCUSDT BITSTAMP:BTCUSD COINBASE:BTCUSD KRAKEN:BTCUSD Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction. _________________________________________________________________________
BITSTAMP:BTCUSD
by SquishTrade
6
SPX H&S Downward Breakout Primary Chart: SPX Head and Shoulders Pattern with Neckline Resistance and Fibonacci Supports SPX formed a Head and Shoulders pattern (H&S) on the daily and intraday charts over the past month. A H&S pattern is actually invalid until it's confirmed with a breakout below the neckline, drawn in dark blue on the primary chart above. In addition, because many traders and market participants see H&S patterns, they have a lower success rate. In any case, a retest of the neckline as a significant chance of occurring in the coming weeks even if the price ultimately continues its decline lower. So watch out for a retest of the breakout point, a common occurrence in choppy unpredictable markets like this year's market. Key levels for this week appear to be SPX 4023, SPX 3981, which are immediate supports that may be reached soon. Whether these supports break or hold (or break and then are reclaimed) will be important especially in the near term. A key level of resistance near term lies just over head at 4062.31. This is a Fibonacci level and it is the .382 retracement of the entire rally off June 2022 lows. Note that this level was tagged Monday, August 29, 2022, and held firm as resistance. In fact, Monday's high was just above this Fibonacci line by about 68 cents. The potential for this decline to be a measured move also exists. A measured move occurs when a price move is corrective in nature and retraces only a portion of the prior move. Whether this move is corrective against the rally off June lows, or whether it is the start of a new impulsive decline back to lows remains unclear—it's the million-dollar question that is debated by everyone on financial media. In any case, examining the corrective measured-move target is a conservative approach to finding a level where SPX may reach to the downside, though nothing is guaranteed in markets. The measured move area is just below 4000. If the first wave of decline has equality with the second wave of decline, the end of the second leg could reach 3997.73. Supplementary Chart A: Measured Move Target Zone between 3941 SPX and 3997 SPX SP:SPX TVC:SPX OANDA:SPX500USD CME_MINI:ES1! AMEX:SPY VANTAGE:SP500 ____________________________________________________ Author's Comment: Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate (respectfully presented) in the comment section. Shared charts are especially helpful to support any opposing or alternative view. This article is intended to present an unbiased, technical view of the security or tradable risk asset discussed. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified financial adviser or other investment / financial professional before entering any trade, investment or other transaction.
TVC:SPX
by SquishTrade
24
BTCUSD's Fibonacci Tea Leaves Provide Some Helpful HintsBTCUSD's Fibonacci Tea Leaves May Provide Some Helpful Levels BTC's Downtrend Since November 10, 2021 BINANCE:BTCUSDT (BTC) has been in a downtrend since its all-time high of $69,000. But it has trended higher in a fairly choppy pattern since its major low on June 18, 2022. Many debates have arisen over whether BTC and other cryptocurrencies have found a lasting bottom that will lead to another bull market. The same questions and arguments arise for equity indices, which have experienced a bear market along with cryptocurrencies. The Debate Whether BTC Has Formed a Lasting Low Many different methods—fundamental and technical—have been explored to solve the question of where BTC's price goes next and whether a rally back to all-time highs has begun or whether another series of price declines lies ahead. One fundamental method some analysts use is called on-chain analysis, but that has likely been the basis for opposing conclusions depending on the biases of the analyst. Glassnode's on-chain analysis has suggested recently that an inflection point may require the capitulation of long-term holders (HODLers). In Forbes this week, Glassnode is quoted as saying: "Bottom formation is often accompanied by shouldering an increasingly large proportion of the unrealized loss." It explained further that "for a bear market to reach an ultimate floor, the share of coins held at a loss should transfer primarily to those who are the least sensitive to price, and with the highest conviction." In any event, this article will not attempt to comment on the validity of any particular fundamental view —the fundamental view provided only for context and newsworthy information. Important Levels from Fibonacci Analysis Fibonacci ratios can be used in a variety of ways in technical analysis. Fibonacci analysis does not have any particular edge over all other forms of analysis, but instead, it is one of many tools that may offer helpful information in analyzing the price activity of a liquid security. No form of technical analysis, including Fibonacci, is infalliable, and none serves as a crystal ball that predicts every price move or wiggle. Simply put, technical analysis does not offer a photographic view of the future of price. If it did, markets could not function effectively or efficiently (unless the photographic view of the future were limited to a select few by cost or other means). But using Fibonacci ratios to analyze price may help identify both time and price areas that can be important to watch. In particular, it helps to see how price interacts with such levels. BTC's Longer-Term Fibonacci Retracement Levels Fibonacci retracements apply the Fibonacci ratios to an identifiable price move between a high and a low or between a low and a high. These ratios are applied to the distance between a selected high and low so that as price retraces a previous move, the ratios can be viewed as either support or resistance. For BTC's major retracement levels, see the horizontal levels on the primary chart above and the horizontal levels on the Supplementary Chart 1 below. The primary chart above shows the retracement levels from the all-time low ($2.22) to the all-time high ($69,000). Retracement levels tend to have greater significance when, as here, they apply over a long period of time and cover price action at the highest degree of trend. (No swing high or low has more significance than an all-time high and all-time low of a security or other asset.) Price appears to have remained stuck below the .618 retracement (R) of BTC's entire price range. This major .618 R level is the horizontal yellow line on the main chart above, and it lies at 26,359.37 . BTC broke through this key level on June 13, 2022. It had tested this level on May 12, 2022, when it held as support the same day (note the long candle shadow piercing the .618 R on May 12, 2022, and the close above this level). The fact that price has remained contained below the .618 R for almost a month and a half has bearish weight, though it's not conclusive. The importance of this level combined with the fact that another important longer-term Fibonacci level lies very near to it (a Fibonacci cluster) suggests that this area may attract price in the near term. It will be important see whether these levels repel price, or whether price can break above them. The next chart shows the Fibonacci cluster described. The .618 R level of BTC's entire range has been drawn on the chart next to the other key level, the .618 projection of the first leg in the bear market as measured from the start of the second leg. This .618 projection lies at 25,950 . Supplementary Chart 1: Fibonacci Cluster with Two Longer-Term Fibonacci Levels Shown in Yellow BTC's Fibonacci Channel Containing Price Since the All-Time High A Fibonacci channel is another approach to Fibonacci. It shows Fibonacci relationships in a more dynamic way. The zero line works as a baseline from which all other Fibonacci levels are then drawn parallel using Fibonacci proportions. The zero line contains price in much the same way as a regular uptrend or downtrend line. The primary chart above shows the Fibonacci channel for BTC's price. It has identified a significant number of support and resistance areas. The most prominent area is the diagonal .618 line which has acted as support a number of times such as in February and March 2022 and in May 2022. The .618 diagonal line also operated as resistance a few times (e.g., December 2021 and mid-January 2022). Note how the .618 diagonal line for the channel held support at the pivotal selloff on May 12, 2022, and on this date, the .618 diagonal line coincided with the .618 R ( horizontal yellow line showing BTC's .618 retracement of its entire price range). Finally, over the past 10 days, it appears that BTC's price has been working to push through the .236 diagonal line (teal). It has pushed above it slightly on several days but closed back below it: note the candle wicks piercing the line with closes below it. Today's push above the .236 diagonal line may end the same way as prior days. But if BTC holds the .236 diagonal line as support, the next level will be the zero diagonal line (blue), which was strong resistance at the end of the rally in late March 2022. Importantly, to even approach the zero diagonal line (blue), BTC's price must push through the major .618 R (horizontal yellow line) unless BTC's price consolidates or pulls back and only later tries to reach the zero diagonal line on August 19-20, 2022 . Why this date? BTC's .618 R (horizontal yellow line) coincides with the zero diagonal line (blue) on August 19-20, 2022. See the blue-filled circle on the main chart above showing where the two levels coincide. August 19, 2022 is significant date for equity indices: it is monthly options expiration, which can sometimes, though not always, serve to shift the direction of equity indices. This will be interesting to track. Tug of War Between BTC's 1.00 Projection Level at 12,173 and the Horizontal Fibonacci Cluster at 25,950 to 26,359 The Fibonacci cluster described above includes the major .618 retracement (horizontal yellow line on the main chart above) as well as the .618 projection (horizontal line shown in Supplementary Chart 1). As noted, the Fibonacci Cluster coincides with the zero diagonal line from the Fibonacci Channel on August 19-20, 2022. This Fibonacci cluster and the zero diagonal line may play tug of war with another key level at 12,173 (see green horizontal line on Supplementary Chart 1 below). This 12,173 level is the Fibonacci 1.00 projection of the first wave of the decline as measured from the start of the second wave of the decline. Each wave of the decline has been labeled on Supplementary Chart 1 below. Perhaps price will tag them both in the coming weeks. Supplementary Chart 1: Fibonacci Cluster with Two Longer-Term Fibonacci Levels Shown in Yellow Fibonacci Time Analysis with Potential Dates for Turning Points Supplementary Chart 2 below shows some Fibonacci time analyses drawn vertically with TradingView's Trend-Based Fib Time tool. The blue circles indicate where the Fibonacci proportions in time identified—or nearly identified, meaning within one to three days—a significant price move. The red circles indicate upcoming dates at Fibonacci proportions in time based on the length of time of the prior price swings. Coincidentally, consider the August 19-20, 2022 date discussed above where a horizontal .618 R of BTC's entire price range coincides with the zero diagonal line of the Fibonacci channel. This falls quite close in time to another Fibonacci time-based level: the 1.272 extension of the time span between March 28, 2022 high and the June 18, 2022 low (shown vertically in teal). Note also how other recent minor price highs in the past month were captured by this Fibonacci time-based tool. Lastly, October 29 to November 1, 2022 also appears that it might have significance. Three golden ratios (.618, 1.618, and 2.618) based on the entire price decline in terms of time, and based on the March 28-June 18, 2022 price decline, fall in this period. It may be worth watching what sort of price moves lead to this level and whether other technical evidence supports a potential reversal there. Supplementary Chart 2: Fibonacci Time Analysis BITSTAMP:BTCUSD COINBASE:BTCUSD KRAKEN:BTCUSD BINANCE:BTCUSDT CME:BTC1!
BITSTAMP:BTCUSD
by SquishTrade
Sunday BTC Report. Should move up slowly.Sunday Night BTC Report. Seems like we are done with the 50% buyer's zone and heading toward the seller's 78.6% zone. We are currently in the seller's 50% zone and have hit the top and then come back down inside but that candle that made that move is only 2 hours old. We should break out and probably nit the next resistance level overnight or sometime in the morning. LASS is all up with momentum and the Stochs are more or less supporting a move up. Let's Goooooo BTC!
COINBASE:BTCUSDLong
by stikytrading
Profitable Patterns: Fibonacci RetracementsLarry Pesavento is a 50 year veteran trader. He began his career trading full time in 1967 while in graduate school getting an MBA in Finance following a BS in Pharmacy. In 1982 he became a member of the Chicago Mercantile Exchange where was a local in the S&Ps currency pits. Following this he worked for a commodity corporation in Princeton New Jersey from 1985 to 1986. ''Pattern One and Two are reaction patterns. The move from point B can be 38%, 50%, 61%, 70.7%, 78%, 100% ( double top or bottom). The only time I use the 38% retracement level to find a trade entry is when the move from A to B is one of tremendous thrust (three to five times normal trading range bars). The market will give you strong clues as to what it will do next if you watch the retracements in new moves. If it reacts only 38% on the first reaction swing, then a high probability exists that the next swing or two will also be 38% reactions.'' - Larry Pesavento, Profitable Patterns for Stock Trading Found this post valuable? Make sure to LIKE and FOLLOW for more!
Education
by MikulovicFOREX