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Everythingbubble

Bitcoin: Big Alarm Bells about to be rung (VSTOP, NTV and BB)There is a lot in the chart but we can go bullet by bullet. I am using the three day intra-week setting but will look at other time frames as we dig in. VSTOP - A way of setting stops using the Average True Range, a measure of volatility to help chart trends. I have decided to only show the VSTOP acting as resistance to simply the chart. VVSTOP MTF - A multiple time frame VSTOP set to three times the default setting. In conjunction with the VSTOP it can show dynamic support and resistance, For visibility I have tweaked the charts to have the flag indicating the bullish MTF was breached show high on the chart. A black dot within a bulb occurs when the MTVSTOP is breached and then we close a handle below to confirm the break. Investigation: In 2017 there was a massive run up on BTC and at a high we had the VSTOP present bearishly and in short order the 20 period SMA was breached and the MTF VSTOP was breached and confirmed in short order and a massive bear market ensued. We see we are very close to having all three conditions met currently. We have 16 hours to close the candle and if we have flipped the VSTOP it will be another 3 days to get a black dot in the bulb and we start printing bearish MTF. 1 Week Chart This chart is a bit wonky. The log Growth curves are used to contain the vast majority of price action and the bolded lines show a lot of significance over the years. In part, if the are breached we can expect to transverse from one to the other rather quickly and either consolidate or proceed to the baseline of the upper limit. I altered the MACD to only show the histogram because to show the crosses on the log chart is basically impossible, so we can just focus on the histogram. The blue boxes show where the MACD crossed the signal and therefor the histogram flipped from green and positive and red and negative. But that is not the only condition for a blue box. The NVT had to transition from Red into Yellow signaling lower network value/transactions. Historically those conditions being met are devastating for BTC price. Now this chart is BLX and so it is a day behind. Here is our current chart. The MACD is clearly red and the bearish cross of the MACD and signal is upon us. We have not closed, but there is a breach of the log growth channel of interest. Another look at the weekly chart with the bollinger band in blue and the monthly bollinger band in green. This is simple, if we slip into the monthly bollinger band with a weekly MACD cross we are in a bear market. You can take your shorts at either the baseline of the weekly chart or at the top of the monthly Bollinger band. Here is a similar circumstance in 2013 and 2014. We have the MACD cross and slip into the monthly BB and we have a bear market. Also, the uptrend has been marked by falling volume and RSI going into this MACD cross In summation 3 day VSTOP bearish About to convert the 3d MTF VSTOP to bearish Broke the 3d 20SMA Weekly NVT and MACD combo look like hell Weekly and Monthly Bollinger and MACD combo bands look like hell Volume and is declining with rising price very suggested of the end of an uptrend on the weekly timeframe. Me Personally I am tethering up what I can except what I need to maintain some shorts. I had my some very long calls reach target and was willing to deal with the normal pull backs in crypto but at this point I cannot risk the upcoming volatility if I don't think we can return to these levels in a couple months or maybe even a year. If I am wrong I miss some gains till I see more strength in the charts. Oh well.
BITSTAMP:BTCUSDShort
by This_Guhy
2
A Monthly and weekly look at GoldGreetings. Gold is a sleeping giant that rolled over in its sleep beginning in 2018 and now most may have thought that it has settled down, but it really has just put on its boots and is about to get going in earnest. The similarities between 2008 and our current situation should be obvious with both the charts as well as the news cycle justifying ever ending inflating the money supply and destroying our savings for our own good (they say). Gold went on a banger of an uptrend and exceeded its all time high but then pulled back with a financial shock and disease (H1N1, Corona, etc) to retest its previous All Time high. The big picture is very bullish but will become even more so when we look at the current price action on the weekly. The weekly chart shows a bull flag in black, and within that bullflag we have a nested W bottom against the flag support. To make things even more bullish we have quite a bit of bullish divergence on the MACD and histogram. I am sure you could pull up a whole lot more indicators but this is good enough. The key point is the price action is also against the weekly bollingerband. Very limited downside, nested weekly structures and a very bullish monlth macro structure suggest a whole lot of upside over the next year or two for investors. Ultimate levels to watch are the fib channel levels. Hitting play on the main chart in a year or two will be kinda a neat exercise to see how well this post does. Degenerate Traders would use a stop loss system based on the W pattern and would look to play the interactions of the bollinger band and flag resistance flipping to support. My personal interest in gold right now is contemplating using PAXG to "tether up" as opposed to usd stable coins. If I see some risk in the market and gold happens to look good while a specific crypto coin looks at risk I will look at going PAXG instead of USDC or Tether. I have decided to only use one linked idea for this post. It is with regards to the Dollar Milk Shake Theory put out by Brent Johnson of Santiago Capital and the idea expounds on the theory.
COMEX:GC1!Long
by This_Guhy
3
GOLD to $3000 !? - Technical and Fundamental Analysis Note the similarities in price action within the highlighted areas at the levels plotted... now, let's see what happened at those times and what similarities we can find in the fundamentals. The Great Crash of ‘79 The Dow Jones Industrial index peaked at $897 on Friday October 5th, 1979. On Saturday the Federal Reserve and Chairman Paul Volcker adopted new policy procedures that would target non-borrowed reserves rather than targeting the price of reserves in the financial system. This was intended to be a better approach to controlling inflation. Note that Monday was Columbus Day and Banks were closed, the market still fell 13.6 points which by today’s standards is nothing, but back then that would have been a 1.65% drop with banks and institutions not even trading. The Dow continued to fall for the remainder of the week for a total loss of 6.53%. As if that wasn't bad enough, after a slight recovery from November 1979 - February 1980, it finally bottomed out hitting a low at $730 on March 27th, 1980 for a loss of 18.68%. What happened to Gold? For a few months gold prices stayed flat but began to rise on November 27th until they reached their peak on January 21st, 1980. Price per troy ounce went from $396 to $873, for a gain of 122.14% in 108 days. The Dotcom Bubble The Dotcom Bubble was an era where investors ignored fundamentals, basing their investments on PE ratios on future earnings, in many cases several years ahead when many of these companies had little or no current revenue. During this time, PE ratios were averaging over 44 times earnings. In 1995, the Nasdaq began the year at a price of $404. The bubble lasted a total of 5 years finally hitting its peak on March 24th, 2000 at $4816. However, speculation and overconfidence increased rapidly in the final year causing the index to rise from a price of $1836 on the opening day in January 1999 for a total gain of 162.33% in just over a year. The burst of the Dotcom Bubble lasted 2.5 years with the Nasdaq falling 505.64% until it reached its bottom on October 8th, 2002 at a price of $795. After everything was said and done only roughly 48% of Dotcom companies survived the ordeal. What the Fed did with Interest Rates... On March 3rd, 2001 the fed conducted its first rate cut of many, dropping rates 50 basis points from 6.50% to 6.00%. These cuts continued until April 26th, 2003 reaching only 1.00%. What Happened to Gold? On March 24th, 2000 gold opened at a price of $285. It continued down for nearly a full year losing 10.68% hitting a bottom at $255 before finally taking off and continuing to rally nearly until the Housing Bubble in 2008, reaching a peak on March 17th, 2008 at a price of $1033 a troy ounce. Gold rallied for a total gain of 305.29% over the course of 7 years for an average gain of roughly 43% per year. Housing Bubble After the Dotcom Bubble, mortgage rates began a steady decline due to government encouragement of broad homeownership. Banks were also lowering their lending requirements providing subprime mortgages to unqualified buyers. They were using adjustable-rate mortgages that provided very low rates for 2 - 3 years and then resetting at higher rates. House prices on average increased by 55% from 2000 - 2007. Now with prices so high, risk premiums were just not worth the investment. This caused a massive sell-off in the securities market as investors began to dump their mortgage-backed securities at alarming rates. Now let's talk numbers.... At the height of the Housing Bubble, The Nasdaq index traded at $2239 and fell 54.50% down to $1018 before recovering. The S&P 500 was trading at $1576 and fell 57.69% down to $666. On April 1st, 2001, a few days after the beginning of the crash, the S&P 500 was trading at a PE ratio of 33.96, reaching a high of 46.10 in December. The Dow Jones Industrial Average traded at a high of $14198 before falling 54.53% to a low of $6470. Another factor to note during the Housing Bubble was the inversion of the yield curve that occurred on Jan 3rd, 2006 which many economists would signal as a potential recession in the near future. This inversion lasted 17 months. The yield curve reverted back on May 29th, 2007, 16 months later was September 29th when the market began to crash. During this time The Fed ramped up its quantitative easing efforts and increased their balance sheet from September through to December 2008 by 1.3 trillion dollars, a 143% increase. What Happened to Interest Rates? By 2006 fed interest rates were beginning to tick up from 1.00% to 5.25% on April 26th, 2007 before The Fed began making consecutive cuts starting on September 18th, 2007 all the way down to 25 basis points on December 16th, 2008. What Happened to Gold? With Gold already catching bids due to the Dotcom Bubble only 8 years earlier. Before the Housing Bubble took place, it only fell 34.13% from its highs to $681 an ounce. From that point we saw gold rally 182.48% to $1923 an ounce in just under 3 years reaching its highs on September 5th, 2011. Adding this to the Dotcom Bubble, gold had rallied 574.75% in 11 and half years. THE EVERYTHING BUBBLE Now let’s take a look at what the current market conditions are telling us. Equities Market Gains since the Housing Bubble Nasdaq – 1211.90% S&P 500 – 479.11% Dow Jones Industrial Average – 383.35% PE Ratios Nasdaq – 41.10 S&P 500 – 41.74 Dow Jones Industrial Average – 29.53 One thing to note this time around is the massive number of speculative bets in small cap stocks. Looking at the Russell 2000, the projected 12-month PE ratio is estimated to be 75.63. The cause of these high PE ratios is strikingly similar to the Dotcom Bubble as speculators are willingly investing money into these “stonks” and many, many companies that are being heavily overvalued despite the fact they are not showing any profits or revenue but are still showing an increase in stock prices. Another factor that is cause for concern is the increase in SPAC (special purpose acquisition company) IPOs that happened in 2020. Out of the 480 IPOs issued in 2020, (already a 106% increase from the amount issued in 2019 of 233) 165 of those were SPACs, again doubling the amount issued. In 2007 SPACs accounted for only 14% of the IPOs issued verses the 35% issued in 2020. Out of the $154 billion, $82.1 billion of that was raised through SPACs. This is concerning as SPACs have not performed very well over the years, showing an average return of -1.4% since 2015. Interest Rates We see similarities between interest rates as well. As with both the Dotcom Bubble and the Housing Bubble, rates before the crash were on the rise and then The Fed had to step in, to lower rates as the market was crashing. After the Housing Bubble, rates were steady at 25 basis points from December 2008 through to December 2015. The Fed began raising rates to their peak of 250 basis points until beginning their cuts on July 31st, 2019 and have since been lowered back to 0.25% on March 15th, 2020 in the height of the Coronavirus Pandemic. Housing Market We are seeing similarities in the housing market to that of the Housing Bubble with rates being at their lowest in history sitting at just 2.68% in December 2020. What’s interesting is that this is causing a lot of individuals to refinance their homes, existing home sales have been steadily on the rise since 2010 however, we recently seen it spike past the average incline in August 2020. New home sales have seen the same reaction with a spike past the average incline in July 2020 through to present data. According to Freddie Mac, average home prices are the highest in history with an average price of $324,900 on October 26th, 2020. That is a 55.90% increase since the lows during the Housing Bubble. Quantitative Easing With the Fed increasing their balance sheet at an alarming rate, this adds an additional factor we need to be worried about. As previously mentioned in 2008 we saw an additional 1.3 trillion added, this time around with the coronavirus pandemic the fed has added an outrageous 3.1 trillion dollars to their balance sheet (and this is before the most recent 1.9 trillion stimulus package Biden has proposed. Yield Curve Again, in August 2019 we saw the yield curve invert which was just 2 months after gold broke out from the 1350 level it respected from June 2013. Since then we have seen the yield curve revert back and the spread has grown but this is still cause for concern as possibly the only reason it has reverted back in the actions taken at the Fed level to try stimulate the economy. How Will Gold React? Based on the fundamental data collected, there are many reasons to see another large rally in gold prices over the coming years. Based on the technicals, we can see major similarities in price action dating back to the crash in 1979 with highs spiking through the $700 level, retracing back until the Dotcom Bubble. Price consolidated below the highs we saw in 1979 until breaking through prior to the actual market crash during the Housing Bubble. Price retraced back to that $700 level just as the market crashed sending prices soaring spiking through the $1750 level briefly before retracing back to the highs of the Dotcom Bubble around $1000 an ounce and staying suppressed below $1350 until finally breaking in late 2019 sending prices soaring through the highs of the Housing Bubble. Now just as we saw before, prices have nearly retraced back to the previous highs during a time when fundamentals are screaming for help. Now, this is purely speculation based on the data collected so don’t just take my word on it, but if history is any indication of the future, we could potentially see a rally up to the $3000 level in the coming years. Just note that throughout these 3 crashes mentioned, Gold either stayed flat or lost value for a few months after the initial crash in the equities markets. At this point the bias is still neutral as we have not got a proper signal to begin scaling in to long positions. All the data described in this post was found using manually using Tradingview charts, some data through www.macrotrends.net and finally www.federalreserve.gov History does not guarantee future results and must be respected as such. Trade and invest with caution. Do your own research and make your own decision when investing your money.
Editors' picks
COMEX:GC1!
by TheCaffeinatedTrader
104
Some fairly serious Bullish Divergence on the USDNot a trade, just an observation. Nerves must be a bit frayed at this point. S&P500 looking top-heavy, but still in green on the week, BTC just painted a new ATH, Gold has moved almost 100$ off the last low. Having a foreboding feeling as we have about 50 minutes till the last FED meeting of 2020. At this point, all we have really is hope that they have carefully worded their presentation. Think I'm gonna need a stiff drink after 4 pm, or possibly earlier if we see fireworks. RSI is showing bullish divergence on the 1 hr, downtrend is at risk of being reversed at least in the short term until we know more.
TVC:DXY
by JJMa
Call for Economist Comments: Eurodollar At all Time HighThis is post 10 on the Eurodollar and the effect on the market. This is a monumental event. The eurodollar is the largest and most important market that one can understand to begin to make conclusions on all other markets. When it moves sideways then it is basically a "new normal" and things can move as we think they should when it comes to inflation, interest rates (real and nominal of course) and so on. When the eurodollar begins to impulse either up or down we find ourselves in a complete different environment. We had the a crisis as the "plumbing" of the financial/banks got clogged up earlier this year and I believe that was due to moves in the eurodollar. Not becauce I have access to any data from inside the banks but because I don't think most bankers have the vision to understand the eurodollar market and how it forces the hands of the central bankers. Economist and conspiracy theorist alike, please comment on that. I have been using and updating this chart for over a year. It is one of the main reasons I have been named a perma-bear and it is a very real cause of me being deeply unable to hold my longs for too long. We had a bump and run bottom, one of the most reliable formations in all of technical analysis and we see that it performed beautifully. The only Bump and Run Bottom that comes anywhere near as close to the technical beauty of this bottom is the one that formed on bitcoin. The targets on the main chart are pretty simple. The purple target cones from the Hight of the top in March to the automatic reaction of the rejection at the BARR target (the Hight of the lead in trend line) added to the neckline of what appears to be an ascending triangle with the smallest of second and third lows. That would take us to negative interest rates on the Eurodollar and therefor the LIBOR, or London Interbank Offer Rate. The question remains who is the dog, who is the tail, and who wags who. A very complicated metaphor for my belief that the the various interest rates of the world are controlled more by the free market interactions in the Eurodollar than most central banks chairs (mouthpieces) would publicly admit. It appears that this is a clear flagpole and so I have shown the full performance target on the flagpole. I would not be surprised if we get 60-70% performance of this flagpole or even some over-performance on the candle wick. This leads to lots of questions of economic fundamentals with the free market dictating negative interest rates, with inflation, and the response of the central banks. Once again, Economist and conspiracy theorist alike, please comment on that. My main hypothesis is that during any impulsive uptrend in the eurodollar futures we will see damn near every other market take a stropping to the downside. Equities, Anti-fiats, all will be slammed by the credit crunch or new clog in the market. My secondary hypothesis is that Consolidation 3 will cause anti-fiats to go absolutely crazy and explode to the upside. Negative interest rates and inflation should practically guarantee that, as much as one can guarantee anything in this world Final hypothesis: The wedge shown below will ultimately perform. It would be very very painful for the world if it performs to the upside. Even more so if then it snaps to the downside. This would be in keeping for the Maximum Pain Theory, which is often reserved for options trading but appears to be very real, given all the bites it has taken out of me in other non-option markets. Even more than normal comments would be greatly appreciated. We should find out very shortly, days to weeks, if I am right. It will require the eurodollar to continue to impulse upward after this break out. Please see the linked ideas for top ideas in this series. The last idea is when I called the bottom of the SPX dump.
GLong
by This_Guhy
2
SPY, QQQ, and DJI all showing double topsTitle basically says it all. A double top is when a clear uptrend sets a high that is within 5% of a previous high. The measured moves all show clear uptrends that peaked and are now setting a lower high within that 5% margin. A bearish breakdown of a double top is a return to the launch price. A bullish breakdown is merely a bull back that is about 60-70% the depth of the valley between the two tops. I am biased against this bullish breakdown because SPY on the left and DJU on the right have set lower lows recently (Green trend line) and DJI has even set a lower high. In other words, DJI is in perhaps one of the biggest double top bull traps the world has ever seen. There is the potential for a clean sell off, or there is the chance that you could get an entry when price action tests the neckline of the head and shoulders. Below is QQQ. Last dump there was a thicket of activity in the black circle and that help define where we would stall on the way down and become an area for retest. The fib extension of 1.618 gives us a target of where buy the dip bulls could bounce the price and give johnny come lately another sell or short entry when price action test a previous zone of support as resistance Please see the linked post on NDAQ to get a detailed view on what I think is happening with one of the most well established patterns in trading and NASDAQ.
NASDAQ:QQQShort
by This_Guhy
NDAQ shows perfect Wyckoff Distribution: Begin MarkdownNDAQ is of course highly correlated with NDX, QQQ, and relate tickers so if NDAQ looks bullish it is a sign that TQQQ and SQQQ will move predictably. If NDAQ is bearish that will have likewise opposite effect. NDAQ came screaming out of the March low to set an advance into a buying climax. The initial give back of that buying climax sets up the Automatic Reaction and that helps define our zone of support, also called the ice due to how dangerous it can be when it breaks. The support on the ice here was confirmed with a bounce of the 20 day moving average which lead to a lower high. That in itself is nothing too serious but subsequent to that price actoin slipped the 20 day and hit the ice again as a Sign of Weakness. After the sign of weakness there was a Upward Thrust which didn't have the buying volume to continue. In other words, bulls where exhausted and could not continue the uptrend. In another sense, there was no one else to pump the bulls bags as buyers were unwilling or unable to continue the trend. I like to use the On Balance Volume EMAs to evaluate this uptrend, peak to peak. I have tried using it on larger timeframes and it doesn't work for me, it isn't responsive enough on the monthly timeframes and my entries are too late. But this is a great resolution. We see this uptrend was not supported with enough volume and the indicator shows a lot of classic bearish divergence which predicts a reversal. Also, OBV break of the 100 EMA is extraordinarily bearish circumstance and should not be taken lightly. Also on that chart is my VSTOP system I continue to tinker with. The MTF VSTOP flipping bearish is also... very bearish. After the Upward Thrust the ice breaks. This is bad because if price action doesn't recover it basically drowns and sinks to the bottom. The ice has flipped from support to resistance and when price actin failed before even hitting the 20 day moving average we have a very bearish set of circumstances. The bottom might be hard to find. DJI has set a lower high and SPX is double topping, both with falling volume so this isn't a bullish set of circumstances. (Technically a double top has peaks within 5% but I think SPX double top with a 5.7% difference is close enought to round down). I am going to let this run for quite a while. I entered my SQQQ position a couple days ago and feel confident that I can let this run until I see some bullish divergence on the NQ1! or SPXU MACD on the 12h or I see NDX out of the bottom of the weekly or monthly bollinger band. My linked post below is one of my most painful post. I completely nailed the bottom reversal and then buggered up the trade by not letting my winners run and shorting too soon. That is one reason why I have incorporated the VSTOP and MTF VSTOP into my system to help steady my hands to the upside when the macro situation is so bearish.
NASDAQ:NDAQShort
by This_Guhy
11
NASDAQ looking very weak on multiple indicatorsI continue to cobble together a trading system that will help me let my winners run while finding potential reversal points as I have gotten fairly good at buying the dip or finding longer term reversals but I leave to much on the table or I get out too soon. So lets break this down: The VSTOP system is pretty simple. The regular setting helps track areas of support and resistance and you can look at closing a position when it flips. When it does flip you have a secondary back up at the Multiple Time Frame VSTOP. Often you can get quick movements from the VSTOP to the VSTOP MTF. The current target for that move would be around $121. The On Balance Volume EMAs is one of my favorite indicators. Like many indicators it is a bit easier to but the dip than it is to short the top because of how difficult shorting can be. The purple circle does show an interesting consolidation below bearishly crossed 10 and 20 EMAs just above the 100 EMA. Should we get the expected move off the VSTOP the OBV situation would probably drive OBV below the 100 EMA and single worse things to come. Further that: the OBV showing hidden bearish divergence peak to peak as shown by the red arrow. That is very crucial and the OBV beneath the EMAs shows a lot of weakness. The blue circles on the MACD show that we have a very similar bearish cross compared to the black squares and purple circle. The MACD has a potential to cross zero and the MACD histogram is showing classic bearish divergence. Somewhat painfully for me is I know uptrends often have three highs (simple elliot wave) and the MACD helps show us where those highs are technically. I shorted the second high poorly. And finally, the 20D SMA is in a position to act as resistance. Based on this system I am cobbling together we could short and place a stop above the VSTOP and either take profit at the MTF VSTOP or look for a fib retracement of this uptrend. You could also zoom out and look for a wider support. If the price action breaks the VSTOP bullishly the setup is negated. If the OBV EMA situation is no longer bearishly stacked the setup is negated. If price action goes to the MTF VSTOP then bounces up the trade is just a swing trade and not a longer term trade.
NASDAQ:NDAQShort
by This_Guhy
2
Silver Versus the NASDAQ II: Moving Averages and Volatility StopMy use of VSTOP and the Multiple Time frame VSTOP has become part of my "autocharting" procedures to identify a price action that triggers a VSTOP to flip and then price action will trigger the VSTOP to flip and then price action to impulse to the MTF VSTOP. We see the black circle and arrow a time where the VSTOP flipped to bullish and shorly thereafter the price action impulses to the MTF VSTOP The last time that happened was Feb 2001 and silver went up 9.5x against the NASDAQ after that. This system I am tinkering with is still in its nascent stages and so I don't have a lot of back testing to look at to show results. Buyer (of this free post) beware. A Key point: First touch of the MTF either leads to a long term consolidation or rejection. The "touch" may not even connect so typically a take profit a few percent below appears to be prudent. This does not neccesarily apply to this because silver was still in accumulation. If this uptrend is simular to the last we should see most, if not all, of the following price actions occur: mostly green months as the price action soldiers through to the top of the EMA ribbon a burst through the EMA ribbon to the MTF VSTOP, a retest the EMA ribbon as support, price action goes on an absolute tear. On this tear there should be a retest of the MTF VSTOP as support and the base of the EMA ribbon. That would be the biggest sign to long and to go big. That is shown at the purple arrow. The EMA ribbon is going to be retested multiple times but the biggest retest will be when it has completed its bullish stack, with all short term EMAs above the longer term EMAs. Going big there will be emotionally difficult. We see that it happened at the bottom of the Great Recession. Also, the VSTOP is set to calculate at the close. If you see a mega green candle on the monthly chart that is so big that the VSTOP is pregnant, or inside the candle, it is generally time to go down to a lower timeframe and use the stop on that timeframe, which should be higher, to get more gains. That is a sign that the top is about to blow off. Finally we can see through the black parallel channel that price action between this pair can still channel or create tradable chart patterns over a decade. The signal there, in hindsight, is very clear VSTOP bearish MTF VSTOP bearish EMA ribbon confirmed as resistance Channel Support flipped to resistance Over the next 10-15 years I would be delighted to see a channel to help me trade silver against the NASDAQ. Please see the linked idea as to price targets on the Silver NASDAQ pair.
COMEX:SI1!Long
by This_Guhy
4
Silver Versus NASDAQ Part I: Decades Long BARR top ConcludedThe bump and run formation is something that is usually looked for with a lead in of six to eight weeks and not six to eight years, but as I charted silver futures against the NASDAQ I saw what was there. This post is long silver against everything, especially the NASDAQ The Bump and Run Top is one of the preeminent charts for understanding blow off tops and the subsequent hang over when the part is over. If you are looking at an asset that is prone to blow off it's top this is what you should be looking for. Likewise if something has a V Shaped bottom there is probably a Bump and Run Bottom in there. Be careful, you calculate the target via different methods and my first couple of times charting BARR tops I got it wrong. As always, Bulkowski wrote the definitive book on this chart pattern. thepatternsite.com Often you don't get full Lead In Height performance on the Bump and Run but here it appears we came damn close. Further, the Average True Range appears to have hit its galactic bottom but the price action has set a higher high compared when the BARR top began. The ATR is commonly used to find potential reversal point when it hits multi-year low on weekly or monthly timeframes and so it seems we have set a higher high Now since we set a higher high there is the chance that this bump and run formation has formed an Elliot 0, 1, and 2. If that is the case the typical next target would be 1.618 pr 2.618 of Wave 1, shown by the fib extension. One of the main inspirations for this post was Mike Maloney from GoldSilver.Com and his you tube channel. He reminded his viewers recently that precious metals have V-Shaped tops and rounded bottoms and the stock market often has rounded tops and V-shaped bottoms. Most of y'all probably are already familiar with his work. I plan on doing a few more ideas in this series so please stay tuned. They will show up in the Linked Ideas shortly.
COMEX:SI1!Long
by This_Guhy
Adam and Eve Top with nested Head and shoulders on SPXI have been looking at the 2020 open as a key level for a while now and in contemplation it appears that it has provided the resistance for the shoulders of a head and shoulders. Full performance would get us to this rising wedge I have also been looking at. A wider shot sees price action at the orange wedge resistance for the third time for a wedge drawn as such, using some SWAG to leave out some of the bottom of late March. while also showing a smaller, tighter, and more technical wedge shaded in yellow. It also shows the Adam and Eve Top. The hight of that yellow wedge is the price range SPX has mostly been in since late May. I've linked Bulkowski's website on these formations for you to do the calculations on entries and exits yourself. But as it stands these peaks are about 7 weeks apart and less than 3% off from one another so they meet some very narrow technical requirements thepatternsite.com In general almost everything is prone to being tested and retested, so the wedge support could get tested as resistance, and the key level at 2970 can be retested as resistance should it fail as support. I do see this as a bull trap and so ultimately I expect to take out the March low. There always remains the chance that this wedge I see breaks to the upside, so always be prepared for that kind of action.
FOREXCOM:SPX500Short
by This_Guhy
Yeesh, SPX & NASDAQ TD Seq Red 1 on the Day and green 9 yearlySPX first due to its longer history. The year chart is absolutely dreadful as twice before the price action has tested the support generated by the sequential to devastating affect to the market. This potential ways off at this point. What isn't is is our chance for a waterfall drop on the daily chart. The NASDAQ doesn't have the same history as the S&P 500 but the 9 is still on the yearly chart and that red one on the daily. Lots of things are syncing up bearish, between the Covid death counts, the eurodollar pumping, these indicators suggesting reversal on a macro scale we are looking at the potential to a lost decade in the United States and world. Disclaimer: I am still getting use to this indicator but it is helpful having something help draw me ranges to evaluate and remove some of the human factor. I am looking to use this in conjunction with the VSTOP settings I have been experimenting to help me let my winners run.
AMEX:SPY
by This_Guhy
9
SPX and the Covid Death Numbers Part IIPreviously I looked at a potential "bullish" MACD cross on the Covid death numbers. Its been about five days since that cross has been established and I have added the Rate of Change to the death rates with an estimated path if the ROC continues as if it were a deep saucer formation. The deaths are going chart is going to be on the standard (non-log) scale for one main reason... I think the reported deaths will be going vertical again on this scale and it will resemble a tangent curve from trigonometry when viewed as such. The rate of Change is going to be on the log chart to provide detail. The MACD histogram for SPX on the 1D is showing a lot of hidden bearish divergence since April. This is a very technically weak place for the broadest based index fund for the United States, which means that the whole damn world is in a sticky spot technically. Below we have the charts for Florida, Texas and Arizona which where the new hot spots were being reported. All three of these states are starting to look like the next leg is upon us and the tangent curve will be coming shortly. Below are the death charts for India, South Africa and Germany, which are some of the biggest dominoes that can fall in their regions. There are always issues with disparate reporting standards but all three show rate of change curves that are starting to either flatten out or turn up. Please review some of the linked posts for more bearishness.
Editors' picks
AMEX:SPYShort
by This_Guhy
53
SPY at key level; TD Sequential=9 Against the Bollinger Band.Very quick post here. The bollinger band on default settings is suppose to contain some 95% of price action and being at the top can signal limited upside. The TD sequential often ends a trend at 9 or 13 so this is kinda a risky place to be be. The red arrows show where you could have made a decent entry in a day or swing trade, at least, and the blue show where you could be taking a small loss with some decent stop management. My linked post shows how I thought SPX might be setting a lower high and in that post my alternative scenario would be retesting the open of 2020 as resistance, and here we are. IF we can get past the Bollinger band , increasing rate of COVID deaths , the TD printing a 9, and the 3 day MACD bearish divergence we could start a new uptrend and change my bias.
AMEX:SPYShort
by This_Guhy
3
S&P Starting to show stress (9 Season Rainbow)The Nine Season Rainbow, by some sort of black box logic unbeknownst to me, is starting to show stress similar to when the dump happened in February. The Purple box shows the signal was in on the lower time frames and the EMAs quickly crossed bearishly. From there the spill was intense and the 48 period EMA was very controlling n the way down, locking in the first bear trap around $2100. The orange box shows where a wedge and another sell signal on the Rainbow triggered and I have to admit, I played this for a small loss. I was in the money and didn't trail my stops down and when I got no where near the performance I was expecting I had to close for that L. There was a similar signal at the apex of that wedge that I let go by and I am currently in SXPU as of the beginning of the fuscia box. The open of 2020 has been support and resistance for about seven months and I am betting that it will continue as resistance. The Covid deaths in the US are picking up (please see the linked post for that) and now the 9Season Rainbow is showing a potential roof is in. The rising wedge has turned into a double top but despite any resilience in that formation it is still setting a lower high from the purple box. If resistance is clearly broken then there is only blue sky upside but that is still a minority position of mine.
FOREXCOM:SPX500Short
by This_Guhy
1
S&P 500 at Key ResistancesThis is a pure price action post and so it is a pretty simple idea (especially for me). Price action created a local high on the 19 of Feb 2020 and then another high on the 8 of June. The second high clearly marks the termination of an impulsive move. One way to understand how price action can act after an impulsive move to to to a fib retracement. We see the price action did a perfect retest of the 0.236 retracement level before returning to the ray set by points 1 and 2. I currently have the ray point to the opens of red candles prior to the gap down. Tinker with your trend line as you see fit. We still may see a week of chopping sideways as the local high gets established. If the local high at 3 is lower than two then that is three lower highs against this trendline and reaching lower fib-retracements is on the table. And that is the macro bullish senario. The macro bearish senario is we set a lower low than March 23rd When I look over at the CDF ticker SPXUSD I see some adtionally support becoming resistance that I like to see as a potential sign of reversal. I generally like finding price action at double resistance as you can see, with the rising blue trendling flipping from support to resistance on this third touch. It helps lend credence to the idea that the trend will continue set lower highs. On the other hand, for price action to overcome this resistance means I am not a little wrong, I am very wrong. See the linked idea for a phenomenological time I did similar analysis on BTCUSD using a previous example on ETHUSD.
AMEX:SPYShort
by This_Guhy
8
ETHUSD in a Massive Descending Triangle (Kitchen Sink Post)Here we have Ethereum on the log chart and as the trend line and hammers show this is the third time previous support has flipped to resistance and so at the very least some sort of down trend is to be expected. The EMAs being used are the 13 and the 48. ETFHQ.com did a competition on the best golden crosses one could look for and found across all asset classes and markets that the weekly timeframe, with EMAs, and with those settings work the best. Since they did that before crypto was a thing I generally use those settings on the daily or sometimes the three day. Price action has been pinched between those EMAs for almost a month now, with the exception being the breakout at the golden hammer. The Nine Seasons Rainbow has just flickered bearish on the lowest timeframe and is signalling weak bull markets on most other timeframes. This isn't enough by itself to signal a trade, but it is a few more grains of rice on the scales that this will resolve bearishly The volatility stop has been adjusted to only show the short stops to help clean up a chart that may get otherwise cluttered. Forgive the awkwardness of this chart but I plan on taking profits on the arithmetic chart and so it is hard to see what is going on with all the price action while focusing on this wonky trendline. It started as me extending to the right the golden trendline from between the arrows but then I thought about extending it left and that is what I got. I don't know if the line will still be valid, but I will be watching it. Further that, the MACD does appear to be rolling over in a normal matter on this weekly chart. The chart below is probably one of my most noisy but I have been using it for years so I can tell whats going on rather well. Clouds The price action at the top edge of the standard Ichi moku cloud. Awful place to look for support. The crypto cloud is looking a little to thick for it to transverse now. Price is currently on the cryptocloud Tenkan and the kijun is at $190 and would be a logical consolidation before the next leg down. VPVR Chart is set to the beginning of the last bull run The price action looks like it should be going edge to edge on the value areas at least. Point of Control at $130 is another potential consolidation area. If we slip the Lower Value Area the next stopping place would be around $45. OBV EMAS Hidden bearish divergence OBV has slipped the 10 EMA and is not testing it as resistance If I am right the OBV will go to the 100 EMA or below. Money Flow Index (Price adjusted RSI) Continuing to tighten and poised to at least test support again. If I am right this almost three year tightening pattern will break to the downside. The month chart with the OBV EMAs and MFI still looks real bad. Lots of hidden bearish divergence and that tight red candle last month makes it look like price action will be rolling over. We might see a an evening star pattern. This next part is experimental stuff for me. I have been playing with the Volatility stop on various timeframes and so far I like finding pinches between the main chart setting and then 2x. So the chart below has VSTOP for the current time frame as dots and the 2w VSTOP as lines. The 2W VSTOP really does appear to be asserting itself as resistance and so we would be using the stop as an entry. One thing is clear: If you use the 2x stops as stop losses when this is trailing sideways you would lose a lot of money. Conclusion This is a lot to go over and the picture is pretty grim. One thing you won't see from me is a post saying the exact opposite where I enthusiastically go over the bullish scenario. If I had a bullish scenario that was even half as strong as by bearish scenario I would not be posting all of this mess. Price action should be going to at least triangle support at around $85. Everything after that is even more validation of the everything bubble I think we are in.
KRAKEN:ETHUSDShort
by This_Guhy
3
Silver Struggling at 100 Month SMA (quickpost)Pretty simple post, since June 2014 silver has struggled to reach the 100M SMA and every attempt or approach so far has sent the price action ultimately to the black trend line. Most recent was in spectacular fashion. The MACD histogram is becoming one of my favorite indicators because hidden bearish divergence helps to suggest that the MACD itself will have a cleaner break of the signal line or cross below zero (in the bearish scenario). Perhaps it is my optimism and greed here, but I am hoping for a busted falling wedge pattern where the price action falls below the trendline. Bulkowski considers that a great profit opportunity for when one goes long. thepatternsite.com As I mentioned elsewhere I am looking for improvements to my system to help me reduce by time in a trade till it performs and also looking to steady my hands once I am in a trade so I can let my winners run. The blue shows where the Volatility stop (calculated at the Daily open,not close) signaled a potential consolidation and support because there were no candle closes below the VSTOP. Likewise the orange areas show that the VSTOP is acting as resistance and we could be in distribution before leg down. I have done plenty of posts on price action and volume action and my general order of precedence is price action, then volume action, then other indicators. I have been in my short ETF for a couple of week now, somewhat patiently holding waiting for this trade to perform. As it stands currently, i would have been using the 100M SMA & VSTOP combo as my entry and not the entry I had use earlier. There is the MACD, which if I am correct would be having a failed cross. Looking for reversals is very high risk and I have the psychological scars to show for it. But there is also a great profit motive and I am getting really close to a workable system. If I am wrong I take my losses on a clear close above the VSTOP and 100M SMA and decide what to do then.
COMEX:SI1!Short
by This_Guhy
9
2020 Q3: Bitcoin still at double Resistance with Bearish VolumeAs I say time and time again, basic charting comes first the price action, then volume action, then other indicators. I have posted iterations on this chart several times over the last several months. Price Action Setting its second lower low since the ATH of December 2017 SHas flipped rising support to rising resistance with the blue trendline and hammer breached the 200W SMA afterit was support in 2016 and 2018 Almost touched the 300W SMA Volume Action Bearish stack: OBV below the 10 EMA whichis below the 20 EMA OBV therefore at resistance and potentially signaling selling pressure about to increase. Other Indicators VSTOP indicates a bearish price action pattern. BLX is an weighted index and so not every bitcoin chart agrees with this chart, but it has the most data and so I use it. The VSTOP is a real simple tool for determining trend and areas of support, resistance, and therefor areas of potential reversals. When I dig to a lower timeframe, in this case the 12H, I see a lot more cause to be bearish in the short term The OBV is very divergent to price action. OBV appears to be about to reverse trend and start setting a valley On this chart is the VSTOP Multiple Time Frame with a multiplier x3 I am using it to help me find a pinch in the price action. There appears to be a very solid floor at the blue trend line. If that floor has a trap door due to the bearish divergence in the OBV expect the fib targets or the longer term weekly SMA targets to come into play. The pointing red fingers show the fractals I expect to replay. I think we will potentially see several red months. For my crypto trade I am currently short in ETHUSD as I expect it to over-perform btcusd to the downside.
BNC:BLXShort
by This_Guhy
4
Eurodollar, Negative Interest Rates, and the S&P (Post 8ish)Twice since 2000 the eurodollar future as pumped to near 100 and at both times the midpoint consolidation marked a bull trap within the S&P. Our current set of circumstances is unique as a third touch at resistance puts the eurodollar future above 100, which signals negative interest rates in the real world and outside the control of the Federal Reserve. How the Fed will respond to this remains to be seen. How market will respond to this remains to be seen. There are several countries with interest rates ranging from -0.1 to -0.75 and if the Eurodollar goes above 100 we should see a whole lot more. www.investopedia.com The chart below zooms in on the eurodollar and SPX. The eurodollar and SPX both hit a local low at the same time and the Eurodollar shows a textbook BARR bottom. It is clear that the flagpole bewteen consolidation 1 and 2 was timed with the dump in SPX. Consolidation 2 overlaps what I believe to be a bear trap in the eurodollar. Another flag pole should throw SPX price action to the ground. thepatternsite.com Here is a side by side view on the eurodollar and S&P. As I have recently been mentioning elsewhere I am using the Volatility Stop to try and help be refine the timing of my entries and steadying my hands to help me let my winners run when they are in a consolidation pattern and I start to doubt my big picture. The chart has a lot of sound theory, SPX support flipping to resistance, a indicator suggesting trend reversal on SPX, a micro acceding triangle in the Eurodollar chart and a stop loss all in one. If we see the SPX price action reverse and close a candle body above 3166 the trade is over or on hold. If the eurodollar dumps as the acceding triangle fails to to perform the trade is canceled or on hold. Here is another look at an asset that had a BARR bottom and hit full flag pole performance after Consolidation 2. There are a lot of differences between the eurodollar and bitcoin and the main one would be the macro-structure both are in. Key would be bitcoin hitting a lower high on this BARR bottom but I am calling for a higher high on the eurodollar. Clear performance should only be a week or two away. Really close. Of course, I am not a financial advisor, nor am I a certified market technician. Take a look at my linked post, you will see me being right on a lot of theory, but you will also see me getting the timing wrong quite a bit. There was still a lot of money to be made on the swing trades, but I was looking for that big move that I think is coming shortly. I still see this as a subvert currency war against China due to their eurodollar exposure and how the US has been probably using the Dollar Milkshake Theory to influence the dollar shortage so it will be interesting to see how this plays out, especially in the Chinese market.
GShort
by This_Guhy
2