BOP is reaady to flyPositive momentum of BOP since last few days and breaking level of 5.75 it is likely to break 7.86 level to fly 9 and above levels.
Note: This is not a buy/sell call. Use SL as per your strategy.
Bop
Balance on Capital Account - An Extreme ReversalBOCA is simply the sum of the surpluses or deficits of net non-produced, non-financial assets, and net capital transfers.
These components make up the BOP or Balance of Payments.
The Chart clearly illustrates the dramatic Collapse... An important indicator which has proceeded prior corrections in
the Equity Complex.
The warning signs for a large retracement, it will no be the far larger correction ahead, but an intermediate term
correction. This will provide an entry opportunity off the lows for a final rally to new all time highs.
Patience will provide, Opportunities are quite rich for both the decline and reversal.
The ROC in BOCA/BOP illustrates the writing on the wall. It is best to consider these movements as a precursor to
an "Event"...
The same pattern has repeated at important junctures prior to the corrections.
The Divergences we've discussed over the past 7 weeks continue to compound, ignoring these...
Ends badly.
- HK
Indicators: My Issues with BoP: Part #2In Part #1, we established how technical indicators - even the ones with high potential to be leading indicators that may enable revealing possible upcoming price movements, using the example of the Balance of Power (BoP), can come short of taking into consideration all factors associated with the price - we listed 7 specific issues that may cause BoP to show inaccuracies and a trader who depends on BoP for trading signals, need to either be aware of them, or adjust the indicator to address these issues.
so what's the idea here? why am I posting this?
the concepts i address here impact traders today. i see many fellow traders using MACD or RSI or other methods without the complete understanding of what exactly the signals are telling them - while i'm not a guru by any means, i thought i can share an example here of one of the highly potential concepts and a famous indicator, its shortcomings, and how it may be possible to tweak and adjust it to make it more reliable to the way each of us wants to trade. It becomes "your own system" - it interprets the movement the way *you want to visually interpret it* - and produces signals that you understand exactly what they means and you can rely on, to make a trade (entry / exit) decisions, score more winners, less losers -- it's a step into the "DIY" world of technical indicators if you would.
In this part, we pick one of the issues from part #1, and see how we can possibly fix it. and see what this "upgraded" BoP would look like.
i'll take the issue of "BoP not taking into consideration where the close of the bar is, compared to the full range of the bar"
as we know, if the bar closes near the high, this is a usually very bullish sign, and vice versa. the Shooting Star example (right-most bar in the chart) is an up bar, where close is > open - and as such, the classic BoP gives it a positive score. we all know how bearish a shooting star is - it's a scary pattern to the long trader - if BoP is accurate, it should result in some negative value for such a bar.
our update #1 adds a simple calculation - on top of the classic (Body / Range) BoP calculation. It also adds another score for where the bar closes compared to the High. if it closes exactly on the high, it gets a positive +100% and if it closes at the low, it gets a negative -100% -- then the scores are added together and averaged to produce a more accurate representation of the bar - that representation is closer to the way you, as a trader, would have in mind when you "visually" inspect the bar.
take a look now as you meet BoP II :) -- some of you would say "Aha!" - now the shooting star gets the negative BoP score it deserves :)
i further marked few note-worthy bars on the top chart where the score of the upgraded BoP formula, with this simple technique, is considerably (in my view) different than the classic BoP score - check for yourself if the BoP II score makes more sense to you, and is closer to your "visual" assessment of how bearish / bullish a bar looks to you.
on the lower BoP indicator, you can see the difference in action, between the old and the new calculation - also marked areas where old BoP would have shown strength where is should show weakness, or the other way around.
in conclusion, i suspect some may be wondering -- 'OK, if we fix all issues with BoP - add volume & spread impacts and factor in the "context" of where the bar is within a trend - do we get the "holy grail" indicator of all times?
we'll see -maybe in future parts - please let me know if you find this research interesting of if you have comments.
BTC Running With The Bulls?The past week has seen a steady increase in BTC price. While some are predicting an upcoming reversal, there is decent evidence of a continuation.
Looking at the chart, we can observe an ascending triangle pattern forming(represented by the dotted pink line). This pattern formation in the midst of a positive price trend can typically be viewed as an indication of trend continuation. Further in-depth technical analysis results in a similar conclusion.
The bottom chart (The Trend Sniper) shows an adjusted DMI, with DI + shown in green and DI- shown in red. At 2:00 on June 19th, we see a cross-over occur, with the DI+ rising above the DI-. This ended the brief ranging period highlighted in the light grey box and signaled the start of a positive price movement. Since this crossover, positive directional movement has steadily increased, while negative directional movement has steadily decreased. It is safe to say there will be continued positive momentum until we begin to see the DI- values beginning to climb and head towards another crossover with DI+.
To assess the volume patterns and possible divergences, we analyzed the OBV-based Divergence Detector indicator. The chart echoed the signals generated by the Trend Sniper. For the most part, the OBV's movement has matched the BTC price action. Although the past 24 hours has seen a few bearish divergence signals (highlighted by the pink circles), the OBV value has remained above zero and confirms the recent positive price movement.
The third chart from the bottom shows a Triple Exponential Moving Average accompanied by a Volume-Weighted Moving Average. The VWMA is shown as the darkest red/green line. When the VWMA value is greater than the three EMA's, the area between the VWMA and EMAs has green fill. When VWMA falls below the TEMA, the area representing the difference between the values has red fill. We have seen the VWMA line crossover the TEMA (circled in green) within the past 4 hours, indicating the beginning of another uptrend confirmed by concurrent increases in volume.
The PowerTrader indicator shows a steady climb in Balance of Power (BoP) values from June 18th onward. This gives us yet another hint that this bullish trend hasn't quite run out of gas just yet.
