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Bearishmomentum

BTCUSD: Key Support Zone Reached. Where Is The Long Trigger?BTCUSD: Price fluctuating inside a major support zone and hesitating within a minor overlapping support area. This area presents very attractive reward/risk for longs, but can it break lower? Big difference from the vertical markets of a month earlier, but this is reality. This is more in line with how markets trade. The good news is price is within a projected support area with a lot of overlapping levels. Even though it is has not reversed up strongly, it still offers potential since the chances of a bullish reversal are generally high. In my previous report, I wrote about the possible inside bar that was forming and the potential bullish trigger which never materialized. Price broke lower instead which brings it into a very attractive area for ME. The whole point of a trigger is to act as a filter and minimize premature entries. And that is exactly what happened here if you were disciplined enough to wait for the close of the inside bar and outcome. Now price is doing it again. Another inside bar potentially forming, two long tails (IF the current candle closes in this configuration) and all of this is happening within the projected support zone of 10988 to 9989 which is the minor .618 support relative to the recent bullish swing. The long signal would be IF the current candle closes as an inside bar, and the high of the next candle breaks above the current candle high. IF that scenario takes place, again it would serve as an entry for both swing and position trades long because of where this is taking place in terms of the bigger picture (large magnitude support). The more aggressive trade is to start buying early, anticipating that the current levels will hold and probabilities will play out. This scenario is RISKIER because price has not fully reversed yet, and you are betting that it will because of the probability of its general location. And as far as risk goes, for a swing trade, the 9950s serve as the best point of reference. Just because the general probability of reversal is high does not guarantee that it will happen. This is why if you prefer more stability and confirmation that momentum is in your favor, you WAIT for the bullish trigger. Which also means you will not get the better prices that are available now. It is a trade off and you must decide which scenario is more in line with YOUR risk tolerance. Anything is possible and price can also retest the 9683 low and possibly lower since the support zone boundary is at 8656. IF this happens I would be looking for the failed low formation to add to my long position as well. In summary, I am very interested in adding to my position trade at these levels. Since momentum is still bearish, I will take a slightly more conservative route and place a buy stop above the market at the 10980 level. I will not get the best price, but I don't mind giving that up in order to have momentum on my side. This helps to minimize a premature entry as well. If price spikes into the low 9Ks I will also consider adding to my position which is aggressive, but I will temper the risk by keeping my size relatively small. When markets look their worst, that is often a good time to buy which is counter to the herd mentality. The key is to do it in a way where risk is carefully considered and entry scenarios thought out and prepared for in advance and then waiting for confirmation. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
24
ETHUSD: Lower High Can Lead Back To 872 Area?ETHUSD update: Lower high established at the 1160 level which is not far from the 1216 to 1304 resistance zone. This formation is appearing across the main coins and signals further short term weakness. This is the trading environment as I described weeks earlier. Vertical markets breed bad habits and now is when the bad habits become expensive. As I wrote in my previous BTC report, buying into the now minor peak had to be done responsibly and for me that means with fractional sizing and no margin. I also wrote that I prefer to wait for the retest of the supports which is now underway across the board. In this market, a retest of relevant support levels is IF price can make its way back into the 872 to 739 area (.618 support zone relevant to recent bullish structure). That would produce a broad double bottom or possibly a failed low formation and would be a good location to consider a swing trade long according to my plan. The extreme price that I would be open to buying into is the 670 level which is the lower boundary of the reversal zone measured from the 770 low. This zone is based on a proportion of the most recent bullish swing. IF price pulls back that far (anything can happen),I will be looking for reversal candles such as a pin bar or engulfing pattern to enter into a position trade long. I like this area the most because it represents an extreme price which is often where the herd is pushed out of longs or emotionally seduced into shorts. It is also where risk on the long side is the lowest relative to recent price structure. Speaking of shorts, selling into a lower high is not a bad idea, because reward and risk can be clearly quantified. Overall 1160 is the level to define risk from while the nearest target is 872. The current price is not the best entry since reward/risk is around 1:1 or less, but a minor retrace higher can present an opportunity on the swing trade time frame. I do NOT short these markets because I do not use margin, and I intend to participate on the bigger picture which is bullish. For those of you who are comfortable with this side of the market, you must not hesitate to take profits if you have the opportunity because the general environment is bullish and shorts will most likely get squeezed fast. I mention the short side because being aware of both sides of a market is part of having perspective. In summary, lower highs often lead to lower lows and within the context of a bullish bigger picture, a conflicting situation like this can be confusing. This is why a well defined plan and flexibility allow for effective trading around the confusion while the reactionary herd is still looking for the uncommon and unrealistic vertical market environment. My plan, just like in the other markets, is to participate on the long side which is in line with the bigger picture. As this bearish retrace may present a short term opportunity for some, I am waiting for the broader trend to reassert itself and I have levels to anticipate where that change will most likely take place. Either the market confirms my scenario, or I don't participate it is that simple. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
18
ETHUSD: New Lows Into Support Zone. Attractive Investment.ETHUSD update: Dramatic retrace takes this market back to the 872 upper boundary of a larger magnitude support zone much faster than expected. Price is now in an area that offers better opportunity on the long side, but price stability needs to present itself. My long at 1311 got stopped out at 1243 which protected me from 400 more points of pain. What you are seeing here is REALITY. Markets retrace and when the pullbacks are dramatic, it shakes out the weak hands who have no structure, trading plan or risk management. I got stopped out, but like I explained in that report, the stop was wide, so you adjust for that in your sizing. Also the wave count, (as much as the critics keep criticizing TA) served as a helpful hint that a broader correction was likely. I kept writing about that also. The question now is: what to do from here? Is the market going back to 500? What about all the hype and drama? First, this retrace is normal and healthy. As a short term speculator, I don't care what triggered it because the wave count showed it was coming. Now my focus is how to capitalize on the members of the herd who are getting pushed out of their positions by their own ignorance. And that means I am looking to get long again, but only when the signs of stability reappear at the appropriate levels. The first level to note is the 984 level which is the lower boundary of the reversal zone projected from the 1073 low. The fact that price has broken below with such conviction is a bearish sign. It points to the next support zone as a more likely place for the reversal process to unfold which puts the following point into perspective. The 872 to 739 support zone is the .618 area of the recent bullish structure. Price has reacted to the 872 level which was projected weeks ago. Since the momentum is still bearish, it is reasonable for price to fall into this zone before finding stability as well which can come in the form of a double bottom or higher low formation. The reversal process from here is likely to take time and when the market finally starts working its way higher, a reasonable target to LOCK in some profits is projected around the 1216 to 1304 resistance zone which is NOW the .618 area relevant to the current bearish swing. This process can take a few days to a week to unfold. Also for the more aggressive, and longer time horizon investors, this is not a bad area to start accumulating some fractional positions. Without using margin, and placing limit order below the market without any stops, gives you the opportunity to get great prices while keeping your risk low. This averaging technique is effective when you do not use margin and control risk through sizing. As the market goes lower which can easily happen, you only feel a fraction of the pain, rather than magnified pain that comes with the use of margin. As this market finds stability over time, you keep adding small amounts. As long as your long term outlook is bullish, and you manage your risk with careful sizing, you can build a core position while fear forces the herd to unload their coins. So you are looking for an average price, rather than buying it all at one price (high risk). It's like a sale at Macy's. In summary, markets correct. It is a normal process that occurs over and over again and it offers opportunity to those who understand the herd mentality and do not get sucked into the ignorance and hype which are rampant in these markets especially. There are no short term trade setups at the moment, but in terms of the bigger picture, this retrace can be considered a general buying opportunity in my opinion. This is why structuring your trading and investment process is so important. Without a framework to guide your decisions, you are more likely to react rather than anticipate.
BITFINEX:ETHUSD
by MarcPMarkets
22
BTCUSD: Weak Hands Being Shaken Out. Consider Longs.BTCUSD update: Price retests 11600 range low area in a dramatic bearish move, which in my opinion is an attractive area to look for position trade longs because this is where the weak hands are shaken out. The 11600 area is a key level because it has been bought up from that point since mid December which makes it a significant range low. It is also just above the 10988 to 8656 support zone which is the .618 area relative to the recent broader bullish structure measured from the 5400 low. What makes this area attractive for position trade longs? A position trade is more like an investment. It looks to capitalize on the broader trend which in these markets is still bullish. When a short term reaction such as a panic spike occurs, and it takes price into extreme levels, this is often where the inexperienced investors get pushed out of their positions for a number of reasons. There are two ways to go about getting into a position in a situation like this. First, you can just place a limit order at a lower price such as 11500 and see if the bearish momentum continues to new extreme lows. The more extreme the push, the more of a chance it reverses back up. The second thing to do which is more conservative is wait for some price stability to return which can come in the form of a higher low. Waiting for stability means you will not get the best price, but momentum will be more favorable. As far as my plan, I still have a position from 13150 that I plan to hold. I am also looking at this panic as an opportunity to add, but since momentum is extreme at the moment, I want to see if price can get inside the 10968 to 8656 zone and add more around there. If I was not long from 13150, I would look to initiate a position around current levels because in the long term, this is a buying opportunity. In summary, now you know why I always write about locking in some profits at highs. Also be careful not to get caught up in all the hype and extreme predictions. When buying into a sell off, it has to be done with carefully thought out position sizing and NO margin. Anything is possible in these markets, and although I do not believe it will retrace back to 5K, you want to keep risk under control just in case, and fractional sizing is the best tool to achieve that kind of control. Conditions like this offer great prices for the longer term investor which is a function of the larger magnitude support levels that price is testing at the moment. Remember, when markets look their worst, that is often the best time to buy, but it has to be done in a way that always accounts for the risk. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
69
ETHUSD: Bearish Momentum Retesting Minor Supports. Buy Signal?ETHUSD update: Minor support area near 1291 being tested while there is no significant reversal structure in sight. Based on the current price action, this retrace can be labeled as a sub wave 4 which implies one more attempt at the highs before a broader correction is reasonable to expect. For those who are newer to utilizing TA, it is important to understand what is offers and what it doesn't. We are evaluating price action to get an estimate of what the market is more likely to do in the near future. It is also important to understand that TA is a process that assists with making more structured decisions when it comes to your trading strategy. It is NOT a strategy substitute. Many participants that are new to the world of speculation often think TA and trading strategy are the same process. I emphasize this idea because this market is fluctuating around a level that offers some opportunity, but it depends on the scope of the strategy you are employing. The 1291 level is a minor support that is the .382 of the recent bullish swing measured from the 1069 low. In strong markets, supports often hold, but simply buying because price is at a projected level is not enough. This is where strategy comes in. Based on my swing trade strategy, this level offers better reward/risk (especially compared to buying it at 1424). What is missing is the confirmation which I evaluate in the form of a reversal pattern such as a double bottom, failed low or pin bar (see example just above the 1069 support level). IF the market can construct a reversal in this area over the next day, then it would offer a chance for a swing trade aiming to capture the next leg up to test the 1540 resistance level (sub wave 5). Otherwise, based on structure at the moment, price is poised to retest the 1206 to 1152 minor support zone which is the .618 area of the recent bullish swing. This zone along with the lower support levels like the 1069 area, or even the 872 to 739 zone offer more attractive opportunities for longer time horizon strategies such as position trades. An important bearish sign to watch that implies the broader correction is in play is IF price breaks below the 1152 lower support boundary. IF that happens, it would be reasonable to expect a retest of the 1069 or lower which offers the opportunity to WAIT for a position trade once price reestablishes stability. Often I will get questions about shorting when I write about lower price possibilities. The reward/risk was attractive for shorts at the time of writing, but there was no confirmation. Eventually a confirmation developed (break of spinning top low), but that is something you must recognize and be within the scope of your trading plan. I do not short these markets because I prefer not to trade on margin, but if I was playing the short side, it would be on much shorter time frames. I would rather take smaller profits and keep risk low on the short side of a bigger picture bullish market. Another thing to keep in mind is IF this market can't build a reversal structure around the 1291 area, and retests the low 1200s, it will negate the smaller impulse wave. This implies the next attempt to retest the high (would be sub wave 5) will more likely unfold as a lower high which I would interpret as a very bearish sign. In summary it is important to keep your evaluation and trade processes separate. TA offers a framework for price evaluation, while the trade process offers a framework to define reward/risk, entry/exit criteria and time horizon. Everything is an estimate, and it is our RESPONSIBILITY to adjust to the market as it CHANGES hence the use of the word "IF". TA helps to interpret these changes in a way that is relevant to market intentions, and not our thoughts or feelings. Buying a retrace in a strong market is a best practice, but it requires a more rigorous process in order to time that position in a more beneficial way relative to risk. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
24
BTCUSD: Consolidation Is Broad Higher Low. Sign Of Strength.BTCUSD update: Price action fluctuating within 12879 to 13786 support zone while presenting another double bottom reversal formation. Even though the momentum is still bearish. this area and the range lows (11600) offer a more attractive buying opportunity for longer time horizon strategies. The first observation to consider is that this market is in a broad triangle. If you look back at the reports I was writing during the broad sell off, I explained that is type of price action was reasonable to expect on the bigger picture. Consolidations or triangles are nothing more than trend continuation patterns and the bigger picture trend is still clearly bullish. I keep getting questions about the "head and shoulders" patterns and why I am still bullish. If you notice, they keep forming, but the market is not falling apart like many keep saying. What people do not realize is that the context of the environment carries more weight than the chart patterns. The broad consolidation that is forming above the 10700 low is a HIGHER LOW within an environment that is generally bullish. These markets continue to grow, fundamentals are generally strong. These factors reduce the chances that a head and shoulders will take this market below 9K in my opinion. Especially since they keep developing within a broader triangle which is only setting up to eventually retest the higher part of the range. As far as levels go, the 13786 to 12879 is the .618 support zone of the recent bullish swing. It is an area where risk/reward for swing trade and position trade longs becomes more attractive, especially since price is showing evidence of some buying activity in the form of a double bottom formation off of the 12879 boundary. Keep in mind price can break lower into the 11600 or 10700 areas which are the range lows and I will still be looking to buy. As far as trades go, I am looking at this market from the position trading perspective. My plan is to still accumulate more as the weak hands exit their positions and attempt to lock in profits IF price retests the upper resistance zone (16350 to 17876 area). The current area also offers a swing trade opportunity long since risk can be clearly defined by the 12639 low. I do not short these markets because I do not use margin, and the spread on the futures is still much too wide to make day trading practical for my strategy at the moment. This is why I would rather build a position trade, which requires less precision while risk is controlled through sizing. Since I have been long from 13150 (I wrote about this trade weeks ago) I will not add unless price tests the 11700 or lower areas of the range. In summary, I am writing about my perspective, strategy and how I am participating in this market. You do not have to follow it or agree. It all depends on your perspective, your plan and your risk tolerance. Some people are screaming its a short, and I will enthusiastically buy from them because I see the technical structure on the bigger picture and this market is in a position to generally go higher. When you find yourself unsure, always zoom out because getting too focused on smaller time frame moves will cause you to react more rather than anticipate and blind you to the broader opportunities. Triangles are trend continuation patterns, and the broad trend is still bullish. What is the best practice in strong markets? Buy supports because they will have a greater tendency to hold. You just have to be able to identify supports that are relevant to the magnitude of the time horizon you are willing to participate in. Supports on a 5 minute chart do not carry the same weight as supports on a 6 hour chart. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
31
LTCUSD: Range Low Support Offers Attractive Reward/Risk.LTCUSD update: Price action has been consolidating and is now showing a reversal pattern within a projected resistance zone near the low of the range. I am now long (50% position size) from 230.01 This is a position trade that I intend to add to if price pushes extreme lows. What is a position trade? It is a longer time horizon trade that requires less precision in terms of entry while risk is managed more with size rather than stop orders. This market is slower compared to the others AND it is trading in a general area that offers attractive reward risk (.618 support zone relevant to recent bullish swing) . On top of that, there is a reversal pattern in play on the 4 hour time frame. There is enough criteria for me to justify taking a fractional position with the plan to add if there is a selling spike below 200. Why no stops or targets? Risk is managed in multiple ways, and a stop order is not always the best way. Since price can still push lower, I would rather control my risk by starting with a smaller position. It helps me withstand any adverse noise. If price completely falls apart, my loss will be much smaller than if I put on a full position now. I intend to add to this position only if 2 scenarios unfold: the first would be the price spike that retests the low 170s. This would be an extreme move and much less likely, but if it occurs and the lower boundary of the reversal zone is rejected quickly, I will look to add in that area. The other scenario is if price can break above 253 and then establish a higher low which will be confirmation of a momentum change off of the range low. I won't get the best prices, but momentum will be in my favor which is acceptable for me. As far as exits go, I will attempt to lock in some profit IF price can retest the 300 area while holding onto a smaller position for the longer term to see how far this market wants to go. Position trades are more like investing and have criteria that is less restrictive. In summary, averaging into a market is not a "better" way or "safer" way to trade, the choice is more dependent on your outlook and risk tolerance. The big picture is bullish and the entire environment is still fundamentally bullish. As long as that is the case, I am confident in averaging into a position in a slower and cheaper market like this one. I am also realistic. If the market falls apart, (anything can happen) I can take the loss because it is limited by the smaller size. This technique is NOT a good idea if you are using margin, because that is when losses can get magnified to the point of wiping out your account. Having a sense of context is also very important for trades like this, because it helps you see through all the hype, nonsense and noise. Comments and questions welcome.
BITFINEX:LTCUSDLong
by MarcPMarkets
31
BTCUSD: Range Lows Offer Potential Buying Opportunities.BTCUSD update: Price retests the 13786 to 12853 support zone after failing to push through projected resistance. This is a trading market. I have written about this since the overdone rally in December: unrealistic markets reinforce bad habits and warped expectations and the results are very apparent if you read some of the negative feedback that I have been getting on various forums. The kind of price action we are seeing at the moment is more in line with how markets generally trade, especially after the dramatic rally this market has seen recently. The 16350 to 17867 resistance zone is the .618 of the recent bearish structure and I have been writing about its significance for weeks. If you actually read my recent BTC report, I explained how a break of the 16100 level confirms BEARISH momentum. On top of that I have been reiterating locking profits at the highs. If you find yourself unable to comprehend these simple concepts, then you should read more popular reports that tell you exactly what you want to hear. At the moment, this market is in the midst of support levels while momentum is still bearish. It is also literally in the middle of a broader consolidation defined by the 17200 and 11600 areas. The middle of a range bound market is the probably the worst place to establish a NEW position because price action is the MOST RANDOM. Randomness is what a trading plan aims to minimize. Since momentum within this range is still bearish, I am anticipating price to retest the low 14Ks (which is a minor .618 support) or possibly a push back toward the 12853 level which is the lower boundary of the .618 support zone that is relevant to the recent bullish structure. Within these support areas, I am looking for bullish reversals. That means IF a retest and price rejection occurs it will be establishing a higher low or failed low reversal structure. For ME this scenario is what I look for when I am interested in swing trade longs. KEEP IN MIND I do NOT KNOW if these reversal patterns will occur, it is a matter of IF the market chooses that scenario. If the market conforms, then I will be looking to buy into the bullish reversal. If instead the market falls through, then I do nothing. As far as shorts, for those who have been reading what I write know that I do not short these markets. I will look for those opportunities in the futures once the spreads become more practical for the type of strategy I employ. At the moment I am still carrying a position trade long that I intend to hold with no stop or target. (Read my reports from 10 days ago). In summary, the whole idea behind projecting support and resistance levels is to have a way to not only anticipate reasonable levels for the market to retest in the near future, but also to have a predefined plan that will govern your decision making process when such levels are reached. The price areas in the low 14Ks and within the 13786 to 12879 area offer reasonable levels to anticipate bullish reversals. This type of price action is in line with buying at range lows but also buying into a much broader higher low that many participants seem to be unaware of. Patterns on charts helps us build a decision making process since they repeat, BUT you also have to look beyond the patterns and consider them in light of the market CONTEXT. If you cannot see beyond the chart, you are much more likely to react along with the herd rather than anticipate it. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
23
BTCUSD: A Reversal Here Can Spark New Rally?BTCUSD update: Higher low in progress just above the minor support area of 12483 to 12139 as bearish price momentum continues to maintain control. Now is the time to watch carefully for a swing trade long entry. As I wrote about in my previous report, there is an infrequent broader reversal structure in play. The subsequent resistance level has been taken out (13520) and the next step is to evaluate the following retrace for a swing trade long entry. The market is following the scenario so far, and presenting the anticipated higher low. Now the question is: when to enter the swing trade long? The answer is in how the current candle closes. If it closes on it's lows, then there is no reason to enter if you are waiting for momentum to be in your favor. Buying when momentum is going your way minimizes pain and randomness from the setup over time. I am waiting for a break of the high of a pin bar or inside bar to occur which would be around 13300 at the moment. That would trigger a swing trade long with a stop around 12100 and a target of 16200 which is around 3:1 reward/risk. This swing trade would be separate from the position trade that I entered into the other day that has no stop or target (explain in that report). It would be especially notable if these candle stick formations appear within the 12483 to 12139 minor support zone which is the .618 area relevant to the recent bullish swing. Waiting for the close of the candle helps to minimize premature entries which often lead to losses. At the moment, price can still continue lower and even retest the 11600 lows. IF that happens, I would be looking for reversals to add to my position trade as well. Prejudging a candle before it closes is a bad habit because you are assuming it is going to close in a way that may not happen (this is especially common on larger time frames). Patience pays especially in preventing potential losses. In summary, not a whole lot has changed in terms of technical formations. The biggest lesson you can take away from a situation like this is that markets stabilize at tops and bottoms over time. It is a process, NOT an event. People who got sucked into buying this market too early, and too big are now at the mercy of the market. Not a good position to be in, but this behavior that payed off two weeks ago is the same behavior that is going to wipe out the inexperienced and impulsive eventually. In my opinion, it is better to miss out than to win and give it all back because when you lose, you lose more than capital, you lose confidence which is a magnitude of loss that cannot be measured in dollars. Slow and consistent requires knowledge and a strong self awareness. That is was trading is really all about, not charts, oscillators and news. Improve your success rate by first identifying and eliminating ineffective behaviors and becoming more aligned with your risk tolerance. It will help you separate yourself from the herd mentality. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
31
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