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Distribution

JSE:AVI Lining up for a poor start to 2019AVI has been ranging since the beginning of the year. However, this looks like a distribution range. The declines with in the range have wider bars and sharper declines than any previous declines since listing. The last decline was on high volume and the attempted rally seems to be failing at the Yearly Pivot Point. Will be watching for price action and if the oversold trend line will be broken decisively for the markdown to start.
JSE:AVIShort
by SteynTrade
JSE:J200 JSE Looking Like DistributionThe range in the JSE Top40 index that started in April 2015 seems to be a distribution range. Following the Wyckoff logic, we could have seen an Upthrust After Distribution (UTAD) and test at the highs at the end of 2017 / beginning of 2018. Now we see an increase in the spread to the downside of 8 to 11 to 12 to 19% indicating a bearish Change of Character (CoC)Using the total sum of volume for Top 40 stocks there is also an increase in volume during these moves to the downside indicating that stocks have been transferred from strong to week hands. Since the last down move, we have seen a week attempt to rally. My bias for 2019 is that the Top 40 could see a resolution of the trading range to the downside. How the current potential Last Point of Supply acts (LPSY) in the new year will clarify if a markdown is about to begin. If the distribution is confirmed I will be looking for laggards in the Industrial sector which is currently the weakest sector to trade (see the previous comparison of sectors in the links below).
JSE:J200Short
by SteynTrade
JSE:TKG Telkom Great Wykoff StudyIt is not a good time to buy Telkom but it makes a good study of the Wyckoff principles. The first thing to notice is the pattern: Markdown - Accumulation - Markup - Distribution - Markdown - Accumulation - Markup and now potentially forming a range again. The next notice the two ways that markups and markdowns en: 1) The first Markup and Markdown ended by an inability to move to the oversold or overbought trend line, 2) The second two had over throws of the lines. Both these setup resulted in a trading range forming. The next thing is to notice how the trading range forms. Only the main labels are added to have less clutter. Volume increases on the Preliminary Supply (PSY) or Support (PS) and it is possible to even be the highest volume for the range as is the case in the Distribution Range. Next a Selling (SC) or Buying (BC) Climax is formed on volume stopping the trend (Phase A). After a Aromatic Rally (AR) or Automatic Reaction (AR) (Still Phase A) a period of low volume in the TR forms where the Composite Operator (CO) is carefully either Distribution or Accumulating stock (Phase B). Once this is done the TR ends in a Spring; Upthrust after Distribution (UTAD) or Last Point of Supply (LPSY) / Support (LPS) Before breaking the TR (Phase C). Once it has been marked out of the TR a backup to the trading range first takes place (Phase D) before the Markup or Markdown can begin (Phase E). Also notice how the Volume RSI can assist in providing a clue if an accumulation or distribution is forming.
JSE:TKG
by SteynTrade
4
$SPX - Monthly DistributionEveryone very focused on the the daily chart need to zoom out and look at weekly, similar to how traders look at the 15 min / 1hr / daily for swing trades. Monthly showing clear distribution on increasing volume. Vol sell signal triggered and would need a close above 2935 to be bullish. Vol stop signal has been extremely accurate on the monthly. Look at the green and red dots. Short the rally's until then. I am long $SPY Dec 2019 $150 puts at .65 avg px
SP:SPXShort
by optionflow
JSE:GLN Glencore Stock Being DistributedGlencore has broken the upward stride that was in place since 2016. After breaking the stride there was a decline on volume and wide spread bars indicating Signs of Weakness (SOW). The subsequent rally bars has smaller spread with declining volume indicating the demand has dried up and the distribution is nearly complete. Once the trend line for the current correction is broken the markdown could start. The Volume RSI also indicates weakness with volumes on green bars being lower than for red bars.
JSE:GLNShort
by SteynTrade
JSE:RMI Rand Merchant Investments DistributionRMI has been looking week since April 2015. After the Buying Climax (BC) and Automatic Rally (AR) was formed the stock has been week and kept moving below the trading range. After some last effort to move to the top of the trading range we see volume drying up indicating that the large players have completed the distribution after the initial increase in volume. The OBV has shown divergence with the price. After breaking the 200 Week MA was broken and retested it looks like the stock is ready to be marked down. The next significant points of interest could be as low as 2662 or even 2257 which is about a 30% decrease in price.
JSE:OUTShort
by SteynTrade
2
USDZAR: Wyckoff Distribution: Rand is strengtheningUSDZAR seems to be going through a typical Wyckoff distribution after an uptrend. A Buying Climax (BC) occurred on high volume and a throw over of the overbought line. We see low volumes on advances and higher volumes on declines. Volumes at the top of the range has been high but decreasing on subsequent tests of the highs. A Upthrust after Distribution (UTAD) has occurred and a lower volume Last point of Supply (LPSY). Divergence with the OBV is also seen. Using a Point and Figure count (see below comment) a target between 12.3 and 13.6 can be set.
Short
by SteynTrade
Bitccoin's higher lows suggest continued upward movementGood morning, traders. We've made it to another Friday and Bitcoin hasn't died yet, which is always a good sign. Novice traders seem to hold as truth a complete misunderstanding of the market -- that things in the market happen randomly. This kind of thinking leads to emotional trading which results most often in a loss. Market moves are measured and purposeful by the composite operator, and are driven by accumulation and distribution which are the result of supply and demand. The retail herd, itself, is nothing more than a price chaser -- a lagging indicator. With enough supply off the table, all CO has to do is suppress or inflate price and the herd will take off chasing after it causing it to move further in the intended direction. When novice traders learn and understand this, they become less likely to be "surprised" by the drops and pops that occur in the market. So where are we at this morning? After yesterday's drop (possibly a Spring on the larger TF), price has stabilized and is currently trading at the top of the local TR. We can see price printing higher lows on the 15 minute TF which suggests price is more likely to move up than down. As such, I am looking for an initial target of $6358 on Bitstamp and $6461 on Bitfinex as the latter's premium has risen to $120 at this time. A breach of the descending red dashed lines on either chart should indicate the movement toward those targets. Don't forget, Bitfinex has a gap at $6360 that is looking to be filled and Bitstamp has one at $6486 and another at $6528 that are as well. Beyond those, we have all the gaps to fill on the way to $6900 also, so my bias remains upward until $6900 at the least before we even consider any extended period below $6000. OBV has continued to rise confirming the upward trend in price on this TF. MACD is bullish, having just completed a bullish cross above centerline. RSI is bullishly above 50. The 4H TF is just exiting oversold and MACD is curled up and targeting a bullish cross of the signal line. OBV continues rising as well. It appears that a pennant may be forming, and if so then the target of $6350-$6360 based on the flagpole would validate the Bitstamp target mentioned above. The 1D TF appears to be printing a possible descending broadening wedge since September 22nd. If so, we should expect a target of the R1 pivot at $7300 upon breach of the resistance of that pattern. I am not convinced of this pattern just yet, however, as there isn't clean strong movement between support and resistance within the pattern. OBV is printing a descending broadening wedge inside of a descending wedge suggesting that OBV will be rising on this larger TF. The 3D OBV continues to rise since its low on June 21st and the weekly continues to rise since its March 26th low. As always, when in doubt, zoom out to get a better idea of what's likely going on. Currently, the weekly candle is showing a growing lower wick which is indicative of absorption which means someone is buying up all the selling at these levels. As a reminder, $6622 remains the point we need price to breach and remain above. It is the general level that has worked as support and resistance throughout this corrective cycle and is the equilibrium of the November 6, 2017 weekly candle. In the broader financial market, stocks should see a rebound today after the $1500 drop over the past two days. The 1D is oversold and the recent gap at $25599 will likely be filled. Gold hit our 1D R2 target of $1226 yesterday and broke out of the descending channel as well as the horizontal TR its been trading in since August 23rd. The dollar is getting a bounce against the majors as the DXY bounces off the daily pivot, so we are short the EUR against the USD this morning. These should be short-lived however as we see continued downside overall for stocks and USD, and upside for gold.
BITSTAMP:BTCUSD
by Chris_Inks
5
Bitcoin shakeout has bears saying "I told you so."Good morning, traders. Everyone is freaking out because of last night's drop, but in the grand scheme of things it was only about 4%. So why the fuss? Because traders are scared that price will go down and remain down. However, if you are a trader then whether price is going up or down should make no difference, only that it's moving so that you can profit. If you are an investor, then your TF is necessarily much longer, so the drop shouldn't have been of any concern to you either, nor whether or not price drops below $4000 and remains there for 6 months. But most people in the crypto market have not taken the time to define who they are as a trader or investor, nor have they learned how and why markets move like the do, and, therefore, become emotional when price moves. I am extremely proud of the individuals in our Discord trade and research group as they showed complete calmness during last night's price drop event. This morning now shows well-oversold 4H RSI which means that sooner, rather than later, we should see a move up. That doesn't mean price can't drop a bit further first, only that ultimately we should expect a nice move upward. It's important to understand that last night's event was manufactured to elicit a response. It wasn't something that just happened randomly. If you watched the orderbook on the exchange, or at least on TensorCharts.com, then you saw heavy sell pressure appear and continue moving down with price as support was pulled. This caused the herd to sell and/or get liquidated as price dropped. However, for every sell there must be a buy, which means someone's longs were getting filled on the way down. If those longs belonged to C.O., then you should expect price to move up overall. That doesn't mean it must move up right this minute. Novice traders tend to think that there must be a strong rebound after a shakeout. But that isn't always the case. Many times we see price gradually work its way back up and out. That does not signal low-quality demand as many big talkers in CT are stating. Once again, I am providing Bitfinex and Bitstamp charts as they show the two general price levels being found in the market. Bitfinex retains a $100 premium. We can see that the Bitstamp chart shows a pennant forming along the S3 pivot which means we should expect a break to the upside to the $6390/$6400 level which was the bottom of the previous TR, and is denoted by the horizontal blue line, as well as the S1 pivot on this TF. What we want to see is OBV breaching its descending resistance line as price moves up. This will signal that the move up is true. I have labeled a mini-accumulation on the Bitfinex chart. A gap remains at $6359.50 on Bitfinex which will most likely be filled. If so, then price will be moving out of the TR of this mini-accumulation and we can expect it to go into markup which means that it should continue upward. The bottom of the previous TR spoken about in the Bitstamp chart is labeled at $6526 on Bitfinex, so that would be the expected target area for now. There is also a gap at $6527.74 on Bitstamp that will likely be filled which would put price above the pivot on the 15 minute TF on Bitfinex which would be a bullish signal on this short TF. When looking at volume and price action, we can note that the drop on the 4H Bitfinex chart was similar to the drop on September 5th in, both, size and volume. In other words, nothing significantly note-worthy. However, if we zoom in to the 15 minute TF, it tells another story. We can clearly see two larger volume spikes with the first drop of $220 being the smaller of the two. The second drop of $115 had heavier volume. The second 15 minute candle took more effort for significantly less result. This tells us that absorption was happening in that $6250-$6350 range. Returning to September 5th, we can see the two largest candles printed the opposite result. The first was a drop of $130 and the second was $345 with the volume being greater on the second candle than the first. Because of this, we can see price dropping further just a few days later, rather than increasing. Finally, we can also see that this recent large 15 minute volume candle was less than the September 19th candle which was buy volume. Put another way, the strongest volume recently has come on the buyside, not sellside, even taking into consideration last night's candle. Furthermore, the volume on the September 5th candle, which was more than the September 19th candle, is less than the previous buy volume on the August 21st candle. As a matter of fact, the largest volume 15 minute candles overall since June have been buyside candles and they have been attached to large upward movements. Volume cannot be understood in a vacuum. It must have context which means it is always relative. So, while there are no guarantees about price direction, if you are dogmatically holding onto the belief that price MUST drop below $4000, then you are not paying attention to what is being said on the chart. Can we drop that far? Sure we can and it is a possibility I have discussed multiple times this year, but this dogmatic belief that it absolutely must do so is pure emotion. In the broader financial world, yesterday's route of the U.S. stock markets sent expected reverberations throughout Asia as stock markets in the east also saw sharp sell-offs. As I have mentioned numerous times before, the cryptocurrency market is extremely risky and during times of market sell-offs we can likely expect to see the same thing happening in the crypto market as fiat heads for safety. This does not mean money will leave the crypto market and stay out of it, only that sudden sell-offs cause knee-jerk reactions resulting in movements toward safety. Gold, as a result, is sharply higher this morning as expected. In terms of the USD, after a strong drubbing recently during which we were long EUR against the USD, long GBP against the USD, and short USD against the JPY, the expected bounce is currently happening and we are now long USD against the JPY for just a bit.
BITSTAMP:BTCUSD
by Chris_Inks
5
Bitcoin and the descending wedgeGood morning, traders. Bitcoin is doing what Bitcoin does lately -- continuing to consolidate. We are getting a good rally from last night's reactionary low near $6400. This morning we can see buying pressure pushing price back up toward $6500. Bitfinex has been carrying a bit of a premium and continues to do so this morning as it is sitting about $50 higher than the other exchanges. This presents arbitrage opportunities for traders with access to the exchange as they are able to buy Bitcoin at a cheaper rate on another exchange and sell it for the premium on Bitfinex. Traders doing so must be careful, however, since transfer times may take their tole as the premium disappears before they are able to sell their Bitcoin on Bitfinex. Currently, we can see price printing a flag suggesting a target of $6500/$6515 upon successful breach of the flag's resistance. This upward progression should bring price to the longer-term descending resistance noted, which began on September 28. Price movement for the past week has printed the large descending wedge seen in the chart and suggests that price may ultimately be more likely to head up and out, than down. The 1H MACD is attempting to complete a bullish cross and RSI has moved out of oversold after last night's sell pressure. We can also see that volume has continued to drop as price dropped, signalling a weakening of the momentum. As noted during our live streams, there are various price gaps on the 15 minute chart up to $6900 that remain unfilled. Therefore, the bias should remain bullish toward $7000. At that point, traders need to carefully watch what unfolds. DXY continues to print a large ascending broadening wedge on the 1D suggesting that we can expect downward progression sooner rather than later. The daily pivot sits at $94.89, and a drop through it would be bearish for the index. The R1 pivot sits at $95.97, and a close above it would be bullish for the index. While the dollar has received some support from the rising interest rate, there are indicators in the economy suggesting a recession is on the horizon. These include the stock market's appearance of distribution and bearish divergences over longer periods of time. As that materializes, generally we can expect the currency to fare worse because there is less attraction to invest in the country. But what does that mean for Bitcoin? It depends on how it continues to react to what is going on in the economy. An interesting short read on this was presented in Bloomberg a couple of months ago (www.bloomberg.com). Generally, the narrative continues to be Bitcoin as digital gold, but traders cannot ignore the reality that it is a very risky asset and money looks for safe havens in times of uncertainty, not increased risk. However, Bitcoin has many things going for it including the fact that it appears to have been in accumulation throughout 2018, OTC continues to grow exponentially, and Bakkt will be coming online next month, as well as the likelihood of a BTC ETF approval before the end of 2019.
BITFINEX:BTCUSD
by Chris_Inks
PANIC - AMD Initiates Fibonacci Retracement Phase 2AMD -7.03% has formed a sharp downward triangle on the 1h chart (looks like the beginning of a Gartley). Lots of sell strength, only people buying are the ones who missed the pump and think they are buying the dip - BIG MISTAKE. Proof? Check out the Accumulation/Distribution , and you will find the beginning of a new peak, a new era if you will... AMD -7.03% historically initiates a pump and dump ritual every decade or so. What is interesting this go around is that AMD -7.03% did not make it quite as high, which in my opinion is a good thing for the stock overall (shows that people's expectations for AMD -7.03% , although overblown, are factoring in irrational exuberance). If this thing follows the historical trend (confirmation bias has a tendency to instantiate the past) we could go down as much as half value from here, to around $15. I would like to see AMD -7.03% stabilize around the $20 mark, which would be a first for the stock, and a very healthy sign long-term.
NASDAQ:AMDShort
by Derivati_Capital
Bitcoin's bias remains up, but sideways through tomorrowGood morning, traders. We are nearing the end of the week which means CME Bitcoin futures expire in just over 24 hours (10 a.m. CST on 9/28/2018). Bitcoin continues to move sideways as we suggested might likely happen, but it did finally break through the resistance at the descending blue line. The resistance combined with the ascending support created a pennant which gives price a target of almost $6695 based on the flagpole leading to it. But first price has to hit the $6614 target. This gets it back into the yellow box. Don't forget that the largest target of $6763 is now triggered and is based on the DBW. The swing high at $6540 remains the key to those targets. Successful breach of that swing high should send price on its way. Failure to breach it suggests supply is greater than demand and we may see price dipping below $6300. There are gaps up to $6973 on the 15 minute chart from the last run up to $7400, suggesting the most likely move is up to fill those gaps. Price remains within the descending channel/bull flag on the 1D chart. A breach of this flag's resistance should send price targeting $7290 at this time, which puts it at the bottom of the blue box. At that point, price is just a skip away from breaching the $7430 swing high that marks the top of the right shoulder. Doing so confirms the compound fulcrum and should mark the reversal. It also takes price through the resistance of the February descending wedge as well as the June symmetrical triangle thereby providing a target of just over $11,200. A higher high above $8500 confirms a bullish trend on the larger TF as it would give us higher lows and highs for the first time this year, and it does so over the course of 3+ months. The DJI printed a three black crows candlestick pattern which is a sign of a reversal. It did so after printing the evening star which is also a reversal sign. The recent Zero Hedge article (www.zerohedge.com) noting that insider selling has soared and is showing the fastest pace of September sales in the past decade, while the average continues to rise, confirms what I noticed about Friday's $90 TR but >2x average volume -- retail is being distributed to. FOMC raised interest rates 25 basis points as expected yesterday and we can see the DXY rising as a result. Again, this was expected as a response to the interest rate hike. FOMC stated they planned to raise the rate once more this year and 3x in 2019. If stocks are in distribution as they appear, then we will be lucky if we see another raise any time soon. Gold is dropping as a response to the rise in the DXY but currently remains within the month-long TR though I'm not sure it will be able to remain within it.
BITSTAMP:BTCUSD
by Chris_Inks
7
BTC'S compound fulcrum signifying a bullish reversal?Good Wednesday morning, traders. Bitcoin followed the red-outlined likely movement, hit our targets that we discussed on last night's live stream, and is looking to exit the DBW that it has been in for the past 2-3 days. Before it does, we should see some consolidation right below support. A breach should provide a target of $6780, based on the widest area of the pattern. That also takes price to the top of the yellow zone. This is all no surprise, however, because as we discussed last night there was a 4H bullish divergence building at that time. Currently, the 4H MACD is attempting to print a bullish cross. Both, RSI and MACD, are about to become bullish on this TF as well. Additionally, a breach of $6600 should take price out of the 1D flag it has been printing which would then provide a target, based on the flagpole, of $7350 at this time. Many people are calling this whole upward movement from September 5th a bear flag, but it is most likely the completion of a compound fulcrum. If you've been following Peter Brandt on the other social media platform, then you know he mentioned a pattern called a compound fulcrum this morning. It is a reversal pattern and is pretty rare. Basically, it is what appears to be a head and shoulders pattern at the bottom of an extended downward movement. It indicates that a bottom is likely forming. A breach of the September 4th swing high at around $7405 would confirm this pattern. This, of course, would also pull price out of the large descending triangle/wedge that price has been printing since February as well as the symmetrical triangle that it has been printing since June. In other words, all these patterns are lining up as likely bullish reversals at the same general exit point. Furthermore, this is all happening as Bakkt is nearing launch, and as I've mentioned numerous times before Bakkt is huge for the market but retail traders are too caught up in the sub-$5000, 2 year long bear winter narrative to understand how significant it really is. BTC/USD longs continue to grow and shorts have dropped a bit overnight, however the ratio remains greater than 1:1 in favor of shorts. DXY is attempting to breach the descending channel's resistance, most likely a result of expected interest rate hike today. Again, this isn't anything surprising and has been what we've been suggesting would likely happen today. However, if the FOMC doesn't raise interest rates, we can expect a strong drop in the DXY. Gold is dropping just a bit, but remains well within the TR it established over a month ago. DJI continues to drop as expected as well while the S&P is printing bearish divergence on the 1M chart with RSI in overbought territory. We saw the S&P do the same thing the DJI did last Friday which is print a small-range candle at a new ATH with volume that doubled the recent average. Again, this signifies C.O. selling into retail euphoria - distribution.
BITSTAMP:BTCUSD
by Chris_Inks
4
Bitcoin accumulating on a small TF?Good morning, traders. I just saw that our POE trade popped for 56% this morning. That's another in a string of great set ups for our Discord subscribers. If you've been following myself or Scott Melker on that other social media site, then you know we've been hitting consistently with HOT, FUN, RDD, TRX, ZRX, and POE being just a few of our recent wins. But how is Bitcoin doing? Not too bad at all at the moment. Nothing surprising happened overnight as Bitcoin followed the general movement I outlined during last night's live stream. TensorCharts.com is currently showing a lot of support in the $6350-$6370 range, as well as at $6200, with some resistance at $6430, $6450, and $6500-$6530. Is this current level accumulation or redistribution? That is something we don't know at this time. We need to see volume expand as price increases to indicate demand. If not, then this is redistribution and we can expect another leg down. Either way, it's going to take some watching of price action to decipher which may be happening. Currently, I expect price to continue following the path I outlined last night which means a move up toward $6490/$6500 is the next step. After that, we could see something similar to either the red or blue line play out. The blue line after that high would indicate an incoming spring and the red line would indicate that demand outpaces supply so there is no need for a spring. As I have been reminding everyone, CME Bitcoin futures expire on Friday at 10 a.m. CST, so sideways movement within a $300-$500 range continues to be likely until that time. RSI and MACD are bullish on the lower TFs and OBV is bouncing. On the 1D TF, RSI and MACD are curled down showing bearishness, but this is expected with the recent downward movement. We want to see OBV pushing back up on this higher TF to indicate continued accumulation. As shown on the 1D chart, the recent retracement is still in-line to be the BU/LPS, and if so then we should expect an SOS (show of strength) indicated by a push above $6900. That likely won't happen today or tomorrow, but it should be in the cards for sooner rather than later as long as the smaller TF plays out as accumulation.
BITSTAMP:BTCUSD
by Chris_Inks
3
Is BTC retail being ostensibly bearish in spite of price action?It's Friday, traders, and you know what that means -- liquidity drying up for the weekend as the larger traders take a break and enjoy some down time. This means it is easier to move price with smaller sized positions, so if trading be aware of sudden movements. DXY is getting a bit of a bounce today as I mentioned it would yesterday as a result of it hitting the equilibrium of our box. It is also being supported by the S1 daily pivot. Of course this means that gold has taken a bit of a hit as a result and it is currently finding support on the daily pivot. Remember, gold has been in a descending channel since earlier this year, but it is moving sideways and nearing the resistance of that channel. A clean break should indicate a likely trend reversal. But we are here to talk about Bitcoin, and how about it? Strong move overnight as expected has price topping out at almost $6800 so far. This has price perilously close to a hotbed of over-leveraged, under-capitalized shorts. A daily candle close at/near the day's high would be extremely bullish. Price has hit overbought on the 4H, but only reached about 76 on RSI so we could see a bit more upward movement before a rest. As I mentioned yesterday and a few days before, my expectation was to see price hit this area and then pullback before pushing higher. We have RSI dropping on the 15 Minute chart as price makes slightly higher highs. OBV remains strong for now. MACD has also dropped, but watch the histogram as it is close to printing hidden bullish divergence with higher lows in price but lower lows in the oscillator. This is only the 15 minute chart, so it doesn't mean we necessarily have to target $7K on a move, but it does mean that we could see a push toward $6815/$6850 if it prints. There is also a possibility to see a sudden thrust up toward $6930 or so before a retreat toward $6650/$6700 if it does so. Failure to make those moves upward should signal a retrace to the bottom of the yellow box, or maybe even the upper horizontal red dotted line depending on how fast the drop happened, before the next potential move up. The 4H R2 pivot sits at $6847 which is inline with a move toward the $6850 area outlined above. OBV on this TF looks strong at the moment as well. MACD and RSI are bullish with the latter in overbought territory as mentioned. Ultimately, $6985 gives us the equilibrium of the green box above price as well as the descending blue dashed line which denotes the resistance of the large triangle/wedge that has been printing since February. We have had two technical breaks of this resistance so far -- July and September. A breach of this area has me looking for a target of the equilibrium of the upper blue box, where the previous run up was stopped. We have seen a 10% build up of longs since yesterday while shorts have ended up flat. This has me thinking that retail traders are being ostensibly bearish, and contrary to possible price action, which could provide fuel for a short squeeze. Again, I am not saying that it must happen, only that if it does the likely clues are making themselves known with glitter and sparkle.
BITFINEX:BTCUSD
by Chris_Inks
7
Bitcoin's CBOE shakeout. CME and ETF upcoming.Good morning, traders. CBOE Bitcoin September futures expired yesterday and, as I warned, there was comparatively large volatility within an hour of the expiration. It began with a strong drop and ended with an even stronger pop that resulted in about $400 worth of upward movement. This appears to have been a terminal shakeout on the small TF accumulation we've been watching since September 17th as shown in the 15 minute chart to the right. If so, then the current price location is the BU/LPS and we should expect price to exit the top of the TR. On the larger TF accumulation, shown in the 4H chart on the left, this move was likely a spring, as well, and the current price location is the LPS within the TR. As of this point, price has moved exactly as I outlined a few days back, but that doesn't mean it must continue to do so. Until price exits the top of the TR, traders should remain cautious. If too much supply remains, then there will have to be additional tests/LPSs before price can move beyond $6600. Remember, price is still moving sideways within the 4H TR. Shorts have dropped just the slightest bit and longs remain stable. As long as support holds at $6350-$6400, price should be preparing for a further move up. Price breaching the high from yesterday's shakeout at around $6510 is the key level to watch. If it drops below $6350, then we need to see $6200 hold in order to stay with the smaller TF TR. If price does manage to drop through that level then I will be watching for an initial bounce from around $6130. The one thing on the smaller TF that remains suspect is OBV, which has dropped. This could quite possibly be the result of the strong price movement during the shakeout and, as such, may not be an issue as the 4H TF shows OBV holding well so far. But traders should continue to watch OBV on their TFs. The 1H MACD is nearing a bearish cross, so if we don't see price move up soon, then we could see it dropping back down toward $6380. The 3D chart shows sideways movement for the past week as price nears the apex of the symmetrical triangle it is printing on the larger TF. We may not see any strong upward movement until CME expiration next week as a result. DXY is dropping this morning and, as expected, gold is rising. Emerging markets continue to grow and there appears to be a strong correlation between EM and BTC. The DJI has finally filled the gap from January and is attempting to print an upthrust (higher high through the top of the TR). At this time, my opinion is that stocks are in distribution and, if so, then we should expect downward momentum after it completes this new ATH. Many people expect Bitcoin to do very well during an economic recession, but as I have pointed out it remains a very risky asset class and during recessions money flows into less risky assets. So, if stocks are in distribution, then we will have our first real opportunity to see how the world truly views Bitcoin -- as a store of value or very risky. All this being as it is, of course we have Bakkt coming online in November (which is huge news for this market and should give it a boost). We have CME September Bitcoin futures expiration in just over a week as well as the ETF decision. Both of these have the ability to play havoc on Bitcoin's price, so traders need to remain vigilant in their trading. The SEC is expected to delay a final decision on the ETF until Q1 of next year, but with Bakkt coming online there is the distinct possibility that we could see a surprise approval prior to then.
BITSTAMP:BTCUSD
by Chris_Inks
8
Bitcoin price is printing a symmetrical triangleGood morning, traders. Today is the CBOE Bitcoin futures expiration date. Furthermore, price has been printing a symmetrical triangle since September 8th which mimics April's symmetrical triangle that resulted in the short squeeze. Shorts were at an ATH at that time and are currently near it as well. Now, much like then, retail sentiment is very bearish and the expectation is that price must go down. So, must we repeat April? No, we don't have to, but the pattern continues playing out similarly which makes it foolhardy not to pay attention. The 4H chart shows price finding support on, and then bouncing off of, the bottom of the trading range while printing a possible bullish hammer. My expectation, as I explained last night, is to see price target the top of the trading range at $6450-$6500. If price continues to follow April's pattern, then we would expect to see one more move down toward $6350 before price exits the top of the triangle and, potentially, ignites a short squeeze. However, as I said, that short squeeze doesn't have to happen just because price exits there. The price target upon breach of the upper descending resistance line of the triangle is that descending black resistance line. It is based on the widest part of the triangle. That target is also the horizontal red line that we have had on this chart for a while. The descending dotted blue line denotes the top of what everyone is calling the large descending triangle/falling wedge, but notice that we have had two technical breaks in the last couple of months. This makes me question whether that larger pattern really exists. More often then not, you have one technical break and then the price runs the other way. So, is the real pattern the triangle outlined in black that begins with the June low? OBV is nearing a break through the top of the red descending wedge it has been printing since February which would suggest strong price appreciation upcoming. Looking at OBV since September of 2017, we can see how it has been creating a rounded bottom, as expected in a correction, which it may be nearing the lowest point. Volume precedes price, so if we see OBV rising, then the expectation is that price will be following. The bottom remains speculation until it proves itself to be so, however. The 1D chart has been printing a rising OBV since August 14th as it nears the apex of its descending wedge, similar to the 4H OBV. We need to see OBV breaking the descending dotted black line before we begin getting too excited. OBV is riding the ascending dotted black support line which makes continued upward movement at the moment potentially somewhat suspect. MACD is riding very close to the signal line, just shy of a bullish cross, and is approaching the descending dotted black resistance line. A breach of this line should suggest upward momentum toward the top of the ascending triangle that has been printing since April. All this being as it is, we cannot forget that we are in a corrective cycle so there's always strong potential for continued downward movement. As such, we can see that a breakdown of the smaller symmetrical triangle that's been printing since September 17th could produce a target as low as $5940 which is on the ascending support line based off the lows on June 24th, June 29th, and August 14th. Furthermore, the much larger possible bear flag breakdown would see a target of around $5000.
BITSTAMP:BTCUSD
by Chris_Inks
BTC's accumulation in the face of bearish retail sentimentGood morning, traders. Bitcoin continues to move sideways, but for how long? Yesterday's downward movement that led to this sideways action appears to be a breakdown of a larger bear flag, which as I mentioned a few days back would have a target of around $5000. This would follow the AAPL 2009 pattern as I discussed last night, creating a spring, and if price continued to follow it then it would mark the beginning of the bull run. Obviously price does not have to drop that low as pattern targets often do not full materialize, nor does price even have to drop at all as the current area has proven to be a strong accumulation zone. However, if price begins a rapid decent, that is what I will be looking for at this time. Daily RSI is sitting at 40, so there is room for price to drop in such a manner. The 15 minute chart has been playing out as outlined last night and price has so far hit a high of $6349 which is the equilibrium of the box that sits at $6322 to $6370. Anyone watching last night knows that was my initial target at $6340/$6350. Remember, there was another possible path that included a spring around $6179, but I warned against traders thinking it was required. So, what now? We can see that price formed a symmetrical triangle, denoted in red. The target is based on the widest part of the triangle, which as you can see leads to $6400. That would put price right between the next two upper blue and red horizontal lines that I spoke of as the next targets. As I've been typing this up, price has now hit a high of $6390, which is the previous period's S1 pivot. At this time, continued movement up will have me watching the R1 pivot at $6456 and the horizontal red line above it at $6544. A move beyond that will see price targeting $6680-$6690. For those who tune into our 2x daily live streams, none of this is a surprise. There is currently little real resistance near price. A check of TensorCharts.com shows us the strongest resistance sits at $6400, but if you've been watching this morning you will have noticed that it has just moved from $6300. It's a false sell wall meant to scare buyers. If you look at the Accumulation Distribution line on, both, the 15 minute and 1D charts, you will see that it continues to rise. We have generally looked at OBV throughout this year, but I have also spoken about this other indicator a time or two. It, like OBV, tells us that accumulation is occurring rather than distribution which should signal price increasing rather than decreasing, contrary to the most bearish among us calling for long, extended trips down to $4000 and below. This could change if this indicator begins showing distribution, but until then any thoughts of that kind of move are irrational. Ultimately, we are watching the September 14th swing high of $6596 and the September 8th swing low of $6119 as the initial boundaries of this current sideways movement. Above the former or below the latter denote likely continued movement in their directions. If dropping below the swing low, then we will be watching the August 14th swing low of $5858 and June 24th swing low of $5755 to hold as support. As we can see, there is also a short ascending support line currently sitting at around $5835 that should help as well. Above price, the daily cloud looms, but notice that it things out immensely at the end of the first week and into the second week of October. This means less resistance on a possible push upward. BTCUSD shorts continue building as they near their ATH and longs appear to be attempting to build a base. DXY continues to fight to stay up, but doesn't seem to have a lot of strength at the moment as the best it can do is move sideways while continuing to dip lower. Gold continues to build its ascending triangle which would create a reversal from the downward movement. While neither of these may directly influence Bitcoin, what they do is provide a gauge of the economy and when they act in the manner that they are we have historically seen Bitcoin's price rise.
BITSTAMP:BTCUSD
by Chris_Inks
4
BTC demand v. supply and the DBWGood morning, traders. After all that movement last night, price ends up right where it started at yesterday's update. It also shows you why I mentioned that I am paying attention to the DBW the most. Price hit the top of that wedge and then dropped back down to find support on the Tenkan line on the 4H chart. As with previous times before, this area continues to print small-bodied candles and/or long wicks on the 1D chart. StochRSI on the 1W is printing a pennant at the 42/43 area suggesting possible upward price movement from where it is at within the next two weeks. I spoke last week of the strong possibility of price just moving sideways for a week or two and that is what it has been doing so far. The 15 Min chart shows price consolidating within the upper-third of the DBW suggesting a likely breakout through the top of the wedge as is expected with this pattern. That doesn't mean that price can't see another strong push toward the bottom of the wedge before it does, though. Doing so at this time would see price possibly reaching $5950. That being said, price doesn't need to drop as it has already recorded four alternating touches to support and resistance. This current ranging in the low-$6000s will continue to try the patience of traders/investors resulting in the "weak hands" selling into the composite operator if this year has been accumulation. "Smart money" is deeper into this pair than it was previously at this price level, just a few weeks ago, suggesting possible accumulation as well. Traders have been making a big deal about the MACD bearish divergences that have appeared throughout this year at the top of the rallies. The reality is that after such a large move up through the end of last year and subsequent strong drop through the beginning of February, these bearish divergences are expected until price levels out as the buy side and sell side trade against each other within a tightening range. Markets tend to return to the mean. That, alone, doesn't guarantee that price continues upward; it only serves as a reality check when people use it as a reason that price MUST go down at the moment. More importantly, traders should take notice that the 1D MACD has been printing higher lows toward the resistance at the highs in May and July, forming an ascending triangle which is a bullish pattern. Since June we have seen price print higher lows, but we do need to see a higher high as well. I am watching for MACD to breach the descending dotted black resistance line within the ascending triangle first. At this time, we can see MACD pulling closer to the signal line suggesting potential exhaustion on the sell side. 1D OBV has been printing a descending wedge, also a bullish pattern, and is nearing the convergence of the support and resistance lines, so a breakout one way or the other is near. As mentioned previously, this could take a few more weeks to play out, but the pattern breakout bias should be upward since the pattern is bullish. And an increase in OBV should lead to an increase in price afterward. I am continuing to watch for a possible SFP (swing failure pattern) at some point, potentially signalling the next bullish push up, similar to what we saw on June 29th and August 14th. This would require that price drop below the September 9th low of $6094.38 on Bitstamp but close above it in the same 1D candle. As always, failure of the June low to hold has me watching $5450 and $5250 as immediate support. Traders choosing to get involved at this level should be aware of the increased risk associated with doing so. Price is holding on support at this time, but it has been here before and as a result there is the very real possibility that price could drop through it if supply outpaces demand. There will be no live stream this morning as I am still not feeling all that well and am just getting my voice back, but I will be streaming tonight at 9 p.m. CST. I appreciate everyone's understanding.
BITSTAMP:BTCUSD
by Chris_Inks
3