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S&P 500: This Retrace Can Lead To 2680a Before Reversal.S&P 500 update: After the bearish pin bar appeared and triggered within the predetermined resistance zone, price behaved as anticipated. Selling momentum asserted itself and this market is now in retrace mode. To avoid premature entries in a situation like this, it is important to evaluate potential support in light of the overall technical context. In my recent S&P report, I wrote that price was vulnerable within the 2710 to 2751 resistance zone (.618 of recent bearish structure). The selling did not kick in right away, it took a couple of days, but the point was the risk of retrace was high. There was also a nice report written on S.C. yesterday about how to maneuver in a situation like this using options. Now that bearish momentum is in effect, the question is: how low can it reasonably go and still maintain it's broader bullish bias? 2683 is the next support level (.382 of recent bullish swing) to watch for as far as a bullish reversal. Remember, the bigger picture is bullish. Elliott Wave counts have pointed to the 3K area as a potential long term target (posted on S.C.). Considering this context, IF price is going to adhere to this path, then the 2680s are a convenient location for buying to resume. The price patterns that appear there will either confirm or reject this idea. If price breaks below 2683, then it is obviously in for a deeper retrace, but it will still not change the bigger picture outlook by much. It will signal more of a range bound market on the short term. In summary, when using the S&P as a gauge for portfolio management, or as an outright trading instrument, the technical picture can provide clarity where fundamentals will not. I wrote about the price vulnerability days before the bearish pin bar and short trigger. I cannot predict the news and catalysts that actually cause the reaction, all I know is that the probability of selling is high. This market is very reactive to many factors such as earnings, political events, economic reports, etc. It is tough to do for most people, but tuning all this out and looking at the market purely from a technical standpoint will provide extra insight that the herd often misses because of these distractions. Short term price action favors selling, so be prepared for the 2683 level whether you are day trading or managing a stock portfolio. You can also follow along on S.C. and see how we utilize this information.
CME_MINI:ES1!
by MarcPMarkets
1
ETHUSD: Relevant Support But Still Lacking For New Long.ETHUSD update: Price has retraced back to the 656 support which is a predetermined level. There is even a bullish pin bar present which can be tempting to enter a long, but just like BTC, this market is also lacking price structure. The 656 level is the .382 of the recent bullish structure which is an attractive level to look for long setups. The question is, what does a long setup look like? Pin bars and other candle stick reversal patterns can serve as validation points, but what is missing here is a broader structure like a double bottom formation. Just like the aggressive trade signal that we recently called in BTC (on S.C.), this market is showing a similar situation. Trend line support, a predetermined level (which BTC did not have at the time of the signal) and a bullish pin bar. This is the recipe for a long, but the problem is the probability, especially in light of a BTC market that has not proven any technical stability yet. Keep in mind, price can fluctuate up to the 714 level (.382 resistance of current bearish swing), or even the 741 area (.618 of recent bearish structure) only to establish a lower high. Day trading up to these levels is one thing, but swing trading carries too much risk. In summary, at S.C., we are now waiting for the more conservative criteria to appear before entering into the next swing trade long. Stability can be expressed in the form of chart patterns and until one of our setups appear, we will not issue any new signals. As long as momentum stays bearish, it is still within reason to expect price to push lower. How much lower? There is no way to determine that, especially with no particular structures in place. Patience is key. These markets will find stability, it is a matter of time. Instead of deciding for the market, at S.C., we will simply wait for it to provide clarity and then determine if there is an opportunity worth entering. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
4
FEYE: We have long & short options here peopleAfter analysts punished FEYE for a less that perfect earnings outlook, FEYE has retraced back to the trendline it fell from. However, volume over the course of the retracement has waned, which could be a sign things may get a worse before they get better. I have outlined my 2 ideas below. Short: FEYE falls through its major support line (purple line) that was previously resistance and forms a Head & Shoulders pattern. If this were to happen I would expect the stock to fall to $15, maybe even as low as $14 (good support found at both levels). Long: As was my original opinion, the stock falls back to the purple support line but the bulls "Hold the Line!!!" like King Leonidus and the stock heads higher. I would expect first profit taking at $19.36 and then again at just over $20.
F
by myfye13
LTCUSD: Mid 150's More Attractive For Buying Opportunities.LTCUSD update: The fact that the 164 resistance was taken out is a very bullish sign for this market over the longer term. This old resistance is likely to become a new support, but the mid 150s offer a more proportionate level for a buying opportunity. With the bullish trend line clearly intact, this market intends to go higher, but buying too early can bring more pain than expected. The 156 support is the .382 area of the recent bullish swing and offers a predetermined level to watch for swing trade long opportunities. The previous candle low came as close as 157 which provides evidence that this level is attracting significant buying activity. It is a matter of waiting for the price action to fit the criteria of one of our buy signals at S.C. And if the market goes higher without such a signal, then we are perfectly fine with missing a move. Optimal reward/risk is a much higher priority when it comes to evaluating an opportunity. In summary, this market is poised to go higher in the long run, but in order to participate, it needs to provide a price structure and setup that fits sound risk/reward criteria. Keep in mind, 190 is the next reversal zone boundary which means not only is that a potential exit, but it is also an area to avoid initiating any new longs. Using predetermined levels to anticipate a particular market action is part of the best practices that we adhere to when generating signals at S.C. Speculating in any financial market is more than just making decisions based on information evaluated on a chart. Self awareness and emotional intelligence are also part of the speculative process whether you are managing a portfolio or individual trades. It is this type of insight that you will find on S.C. only. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
7
ETHUSD: Retrace Can Test 575 Or Lower Before Higher High.ETHUSD update: Price is retracing into the first trend line quickly while taking out the 643 previous candle low. The 590 area is the location of the trend line and is one level to consider for a bullish reversal, but 575 is the level that carries higher probability. Trend lines are useful when it comes to evaluating context, even when they break. A break does not signal a trend change, but it does signal a change in momentum. The key to evaluating a trade opportunity at a predetermined level like a trend line is the price action which can be analyzed through candle stick formations. The current candle at the moment implies further weakness so until it proves otherwise, it is reasonable to expect the first trend line to break. The more attractive level is the 575 area which is the .382 of the recent bullish swing. The best formation to see in this area is a failed low where price attempts to bounce, fails and attempts to go lower and then fakes out again with something like a bullish pin bar. Keep in mind price can go as low as 545 in this scenario and generate a bullish reversal for a swing trade long. IF price continues to retrace and compromises these levels, the next area to consider is the 493 to 434 support zone (.618 of recent bullish swing). Again, the formations at that time will allow for a trade opportunity or not. When a signal is generated, along with an attractive reward/risk ratio, and reasonable premise based on context, we email, text and also publish the details to our tracking spreadsheet on S.C. In summary, a pull back off of a high is normal and healthy. There is no need to get dramatic or hypersensitive which are characteristics of the herd. This price action is the reason why we always say don't buy the highs (unless there is a very well defined setup like we just had in BTC). This retrace can be the test that these markets need to prove that a bottom is truly established which can lead to a broader move higher in the long run. Know your levels and let the market prove itself at those levels, otherwise there is no reason to justify any new positions. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
8
LTCUSD: Waiting For The Next Buying Opportunity?LTCUSD update: Price has rejected the 150 to 161 minor resistance zone that we wrote about on yesterday's update on S.C. This move is the likely beginning of the retrace that we have been waiting for in order to enter our next swing trade long. The 150 to 161 resistance (.618 of recent bearish swing measured from the 175 high) is an area to anticipate selling. This was stated clearly in yesterday's analysis. Best practices dictate: you should be thinking "sell" at resistance levels, not initiating new long positions. We avoid buying into resistances, even if the market is strong and goes higher because we are interested in high probability. Since the herd reacts to market moves, instead of anticipating them, it is easy for them to lose sight of the long term probability of a particular outcome. Buying into highs is a low probability behavior and when it produces a profitable trade on occasion, it reinforces this ineffective behavior. When you stop focusing on the money, only then can you better see the significance of best practices and probabilities. So where is the next opportunity? The 136 level is where the immediate bullish trend line is located. This is one place to anticipate bullish reversals. The other area is the 126 to 118 support zone (.618 area of recent bullish swing). If price falls through both of these predetermined areas (ANYTHING IS POSSIBLE) then we will be looking for an extreme price zone reversal which can occur in the low 100s. In summary, the current bearish candle formation implies further weakness which is healthy and required in order to find a new long swing trade setup with attractive reward/risk. In general, these markets appear to have found some stability and may have established a long term double bottom formation which points to greater strength in the near future. The key to capitalizing on this is letting the market prove itself are predetermined levels. That means the next pull back should not push new lows, if it does then you reevaluate and adjust to the new information. You don't fight the market, you just sit back and go with the flow. Questions and comments welcome. (Visit S.C. for more frequent updates across various markets).
BITFINEX:LTCUSD
by MarcPMarkets
4
BTCUSD: Lower High To Failed Low? Or New Low?BTCUSD update: Price establishes a pin bar at 6425 which emphasizes the relevance of the 6805 reversal zone boundary. Now is when things get tricky because this market is not in the clear yet when it comes to broader bullish momentum. The 7492 resistance level is still intact as well as the nearby bearish trend line. What does all this mean? The broader bearish momentum is still intact and will be until the market proves otherwise. If you had the risk appetite to enter the market on the lows, then you got good prices in the face of total uncertainty. Buying now for that same reason presents increased risk because if the bearish momentum stays intact, you will be getting the worst prices AND having to take the pain or get shaken out if this market retests the low which is VERY POSSIBLE. This upward move, as welcome as it is, has not proven itself yet. To prove that the bears are losing control. price needs to: close above the bearish trend line and close above 7492 which is the .382 of the most recent bearish swing. IF the market can meet these requirements, that is still not enough for me to get long as a swing trade, or even add to my position trade. After the break, I want to see a subsequent higher low or failed low formation. Whether it is shallow or goes into extreme low territory near 6K, that is the move that I prefer to buy into at this point. Waiting for the higher low scenario will not give you the best prices, BUT it will help filter out buying too early. Timing this is not perfect, and it would be preferable to see that higher low initiated by another pin bar. Ultimately how you enter and what kind of risk you are willing to take is up to you. If you have no problem holding this market to zero, then buying anywhere near these lows is not a bad idea. What about shorting? From a technical standpoint if I was able to short these markets, I would consider such a level for day trading purposes only. I must reiterate, holding longer time frame shorts at these levels is extremely risky, especially when some exchanges will not let you out of your position because of a liquidity shortage during a squeeze. Shorting on a day trade basis requires a ton of attention, and a very fast decision making process in order to decisively get out if you are wrong. Not a good idea for less experienced traders. In summary, do not get sucked into the impulsiveness of these markets. From low to high, this market moved 1k points. People who do not know how to put this into perspective will look across all of the coins, see a lot of green, and proclaim, "The bottom is in!". In terms of structure, there is no evidence that suggests that the bearish momentum is losing its grip. According to the current structure in place, it is still within reason to expect a lower low or at least a retest of the low. The key to taking action is when the market does NOT do what it is setting up to do. It is setting up to establish a lower high which often leads to a lower low. If it can't make that lower low upon a retest, that is the evidence that reveals the bears are exhausted. Being that this market is in the middle of a major support zone, a failed low is a very welcome sign at such a location. I laid out the scenarios, now you must figure out your decisions in advance so that you are not reacting, you are instead following your plan. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
13
BTCUSD: Watching For Buyers At 9280 Support?BTCUSD: Bearish momentum is in play now that the previous bullish trend line and 10754 support have been broken with conviction. This bearish scenario is still limited by the structure that this market is within which offers two specific levels to watch for a reversal. This kind of move scares people which is good for others who want to buy at better prices. In my previous report I wrote about possible strength hidden near the double top. I did not write that this market was strong.In fact I wrote about letting the market show its hand, and that this bearish scenario was possible IF the market broke below 10754. Letting the market prove itself costs money, because it means you have to give it room to breath. If you are the type of trader that can't afford to let the market breath, or playing too close to the vest, you are going to have a much tougher time participating in the favorable market moves as well. Now that we have a scared crowd, the question is where are they going to get shaken out, in other words, where are the extremely prices relative to the current structure in place? The double top that is now confirmed is a bearish formation, and it implies further weakness UNTIL another signal or formation negates it. The first step to anticipating this type of price action is to first locate where it is most likely to happen. 9280 is the swing low that has potential to attract buyers. As I write this, price is moving toward this level without much hesitation, but remember this large bearish candle still has plenty of time to close. It is the close that matters more than where price is intra candle. The second level to watch is the 8659 extreme support boundary. Anywhere between the 9280 low and this extreme level is where new selling enters the market (break out traders) and where scared money often gets shaken out. This is the high probability reversal area, where I want to be prepared for a reversal signal to add to my long position. In summary, even though the immediate momentum is bearish, that does not mean the long term outlook has changed. The broad double top is in play, until it gets cancelled out. Minor sell offs like the one occurring at the moment are normal and healthy, no matter what the hype-sters are saying. As long as the broader outlook and premise are still intact, bearish activtiy such as this is more likely to lead to a lower risk buying opportunity, which will not be so obvious on a chart. Can the market collapse altogether? Sure, anything can happen, but I am willing to bet that prices will be higher in the long run. Part of positioning yourself for a broader move is to know where the prices are with the greatest likelihood of reversal, from there is it a matter of waiting for the market to prove itself, and once it can, you have to be able to take the risk in an environment of imperfect information. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
28
ETHUSD - Retrace Before A PlungeHey folks, Straight to the chart ----> Look at the fibonacci retracement levels. Both 38.2% retraces of 2 different fibonacci retracements converged at $810. If you look left you can see previous structure low exactly at this price level. RSI is oversold which indicates a reversal. According to the fibonacci extension the next support level is at $734 unless ETHSUD breaks the 38.2% retrace and continues its rally. Please REMEMBER that I give you my observations, you form your own opinion and trade it accordingly! Please NEVER forget to do your own research before considering any investment. Fundamental analysis is also crucial so you have to read the news, updates and about the upcoming events related to a particular blockchain project. Hope you will find my analysis useful! Stay safe ----> Hedge ----> Diversify ----> Be cautious! - Together we will beat the market!
COINBASE:ETHUSDShort
by DmitryQuail
Bear Divergence on both 1H and 1D BTC/USDHiya again guys! We hit our target from last night, however we have evident Bear Divergences on both 1H chart and Daily Chart. The Daily Chart is a Hidden Bear Div, which typically occurs during retracements. I'm sharing the 1H Chart here, but feel free to check out the daily for yourself. Expect a retrace after a 2,000+ point move, first Support Target is the 6K Ascending TL with second Support Target at the 7.8K Ascending TL. The Support are Dynamic, as the TL support shifts over time, so adjust accordingly! Cheers, Happy Trading.
BITFINEX:BTCUSDShort
by somuchcloudporn
1
LTCUSD: 229 Break Out Can Lead To Test Of 265 Resistance?LTCUSD update: Price action presents a shallow retrace which has established a minor higher low at 212.50. Higher lows often lead to higher highs, so if you missed the earlier buy signals in this market, a new one may be in order, BUT it does not come without some increased risk. Since the turn around in BTC, the coins have all established bullish trend lines. As long as the markets can stay above these trend lines, higher prices are more likely. In the case of this market, the trend line support is at the 205 area. In terms of waiting for a more attractive buy signal, this level would be more appropriate since it has structure and proportion behind it. IF this trend line is broken, that does not mean the market turns bearish, it just means the current bullish momentum is changing (possibly to a more range bound environment). There are two ways to participate in this situation: The aggressive way is to buy the bullish breakout. That would be in the form of price breaking above the counter trend line which is around the 229 area. This choice carries more risk because you are buying right into the 231 to 265 resistance zone (.618 area relevant to recent bearish structure). Buying this breakout is betting that the resistance will be cleared now that momentum is bullish. This requires agility because any sign of failure after the breakout can lead to a retest of the lower 200s. If it follows through instead, you will have a position that has a reasonable target around the 300 area (2.618 extension measured from 106 low). If you use the 200 area to define risk, R:R is 2.3 which is worthwhile for a swing trade in my opinion. The question is, are you willing to take a 30 pt or greater loss if the market turns? The conservative strategy is to wait for a possible retest of the 200 level, followed by bullish reversal signs such as a pin bar, etc. In this scenario you are still betting that price will push through the upper resistance zone, but you are getting a much better price. IF this market breaks below the 200 area, it is more likely to continue as a consolidation rather than a retest of the 106 lows. If you are new to these markets, following analysis like this in a literal sense will not help you be successful. The idea here is to provide a perspective or range of ideas that you modify and make your own based on your personal risk profile. The best thing you can do is learn what factors are being considered and figure out how to interpret this type of information on your own. Following any analyst, whether they are on here or anywhere else still puts you a step behind because you do not have the confidence that gave the author the reason to share their respective ideas. In summary, this market is showing a formation that presents an opportunity. How you participate in this opportunity depends on what kind of risk you prefer to take. IF the bullish trigger occurs at 229, and you buy, you must accept the possibility of the immediate fake out and failure. If you recognize the signs, you can get out earlier. These types of decisions must come from you, your process and your risk profile. Expecting simple "predictions" and outcomes from any analyst is unrealistic. You must be proactive in your decision making process and know ahead of time what type of trade you want to participate in along with a set of specific outcomes. This structured decision making is what your "plan" should help you accomplish for every trade you take, whether its a day trade or position trade. Managing my position trade, I am looking to participate in both scenarios and temper my risk with size since I am in this for a broader move. Price breaks out, I will look to buy smaller. Price retraces to 200? I will look to buy bigger. My risk is managed with my size. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
3
BTCUSD: Strength Continues Toward Bearish Trend Line?BTCUSD update: 10,500 swing trade target was reached yielding an 1800 point profit and you only had to hold since the 10th. Price is now pushing highs and is poised to break above the bearish trend line established in early January. There is nothing to do at these levels except watch. People are still sending me messages asking me if NOW is a good time to buy. Clearly they have not read my previous two weeks of reports, and/or their impulses are so strong, that they can't contain themselves. As I have written before, this is when the herd mentality kicks in and offers an opportunity for the prepared traders who positioned themselves much earlier to sell to the "obvious" crowd. The risks are shifting into high mode for initiating new trades. Current levels are a place to lock in profit, not buy. Now this is when greed begins to rear its ugly head. IF you participated in the swing trade which I defined clearly in my reports, selling some at 10,500 means you locked in some profit and reduced your risk. That was the plan, and if you stuck to it, you should acknowledge your ability to avoid the pitfalls of the herd. When locking in profit, I always reiterate that you should not exit your entire position. Maybe now you can see why. My average price is 10,020 and my plan since the beginning has been to hold for the broader bullish move. The 9887 to 10836 is a minor resistance zone and serves as a swing trade target and since I am not in a swing trade, I plan to hold and only begin to sell some of my position as this market attempts to cross the trend line which is around the 11,400 area. IF I see a selling formation establish itself such as a pin bar, bearish engulfing or other formations that imply oncoming weakness, I will take that as my signal to lock in at least 15% of my position. As long as the newly established bullish trend line stays intact, this market is more likely to push higher. This does not mean the market can't pull back. IF this market breaks the trend line, it will be signalling a possible retest of the 8171 to 4983 support zone (.618 of entire bullish structure). This scenario would prompt me to add more to my position trade once stability materializes after the retrace. Buying into the current highs presents more risk because if the retrace scenario takes effect, you will have the worst prices and face a lot more pain if this market decides to retest the low (ANYTHING can happen). Taking the most pain is what often pushes people out of positions at the bottom, which is the way of the herd, not the professional speculator. In summary, benefiting from the kind of bullish move that came from the 6K low requires planning and structure, not reacting. Often the best prices are the least obvious to the crowd and why having a perspective, and a structured evaluation process is key to capitalizing on their impulsive ways. Evaluation is not "predicting" as so many like to call it. It is about estimating loose probabilities which are based on repetitive price patterns and then considering that information in light of broader technical and fundamental factors. That is what yields a perspective and what facilitates positioning before the herd reacts to the obvious. What also makes this type of positioning possible is the acknowledgement of the potential risk, and comparing that to your personal loss threshold. That is how I decide if a position is worth taking. Charts serve as a tool to develop a perspective, and to quantify risk, they cannot determine your own risk tolerance. That part must come from you and your unique situation. Once you have an idea of what is reasonable on both sides of the market, then you can better decide if the situation is worth the risk relative to your own personal capacity. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
42
LTCUSD: Retrace To 186 Offers Next Buying Opportunity?LTCUSD update: Bearish trend line was cleared in a decisive move higher which lead this market to just under the 231 to 265 resistance zone. The next step is to add on the retrace. I have been writing about the clear reversal formations for weeks in the major coin markets. Of the three that I evaluate, this one had the clearest bullish signal which I highlighted in an update to my previous LTC report. This was the double bottom in the 118 area and was followed by the anticipated higher low, and you can now see the result. You want to be positioning yourself for these type of dramatic reactions, not jump in when it becomes obvious.This is why understanding your own risk tolerance is important, otherwise you will not have the confidence to enter when the most attractive reward/risk opportunities present themselves. The best time to buy is NOT obvious. Now that this market has proven that bullish momentum is in effect, my objective is to add to my position trade long on pull backs. The next pullback I am watching for is the 186 level which is now the .382 of the recent bullish swing. This level also coincides with the newly established bullish trend line. IF price manages to offer this opportunity, I need to then see some variety of a bullish reversal signal such as a pin bar or other type of pattern. Once in place, a swing trade and position trade opportunity will be presented. Why is a swing and position trade opportunity available at the same time? It is all relative to location. A pull back to the bullish trend line also happens to be overlapping with the large magnitude support zone of the 186 to 138 area (.618 of recent broader bull run). Trades off of this level offer attractive positioning for a broader move that can works its way back toward the highs over time. While at the same time, a swing trade can be taken that offers a shorter term opportunity with defined risk and a reasonable target range within the 231 to 265 area. If I think it's going back to the highs over time, why get out earlier? It is all dependent on your outlook and the risk you are willing to take. Also not all levels offer these type of opportunities. As the market goes higher, I will want to buy less for position trading and more for swing trading which keeps my risk in line with my tolerance. Swing trading is a lower risk strategy because you are in the market less time and take profits sooner compared to a broad position trade. In summary, if you find yourself feeling impulsive and anxious because you missed out on the earlier entries of this move, do not give in to the greed and fear of missing out, that is what the herd is for. Getting in the habit of looking ahead will separate you from the impulsive mindset and allow you to anticipate and position yourself to capitalize on the next reaction. In this case it is a simple pullback to the next support. At the same time, you must be mindful of risk because what if price falls through the support? IF that happens, the market would be telling us that it is range bound rather than bullish which will require an adjustment to the short term outlook and expectations. Price may only present a shallow retrace, which requires a more bullish adjustment. Having predetermined scenarios helps you prepare for and capitalize on market opportunities when they are not obvious, The herd cannot see beyond the scenario in front of them, while the experienced speculator is open to a multitude of possibilities and prepared for each one. Impulses steer you into the herd, the first step to avoiding that is becoming aware. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
9
A Christmas StoryThousands of people this December were blessed coming into the Christmas season. Many traders and Bitcoin believers were given a multiplicative gift in their wallets (or exchange portfolio's perhaps). It was a wonderful time, many rejoiced. In the art of meme writing this would have been said as : Such crypto, much rejoice. It was not long after something happened. Everyone ELSE got their Christmas presents too. Bitcoin got smashed time and time again by (what is becoming) a long term downward pressing trend. BTC as it turns out, would retrace its steps, and give everyone who DIDN'T get to buy in cheaply - a second chance. In the art of the common tongue this would be said as: Bitcoins are getting cheap! I can buy one! Now we stare at the chart - and it seems impossible. Improbable. Inconceivable! Bitcoin may retrace 78.6% and give everyone the best gift of the year.
COINBASE:BTCUSDLong
by blessmywork
2
ETHUSD: Bearish Momentum Retesting Minor Supports. Buy Signal?ETHUSD update: Minor support area near 1291 being tested while there is no significant reversal structure in sight. Based on the current price action, this retrace can be labeled as a sub wave 4 which implies one more attempt at the highs before a broader correction is reasonable to expect. For those who are newer to utilizing TA, it is important to understand what is offers and what it doesn't. We are evaluating price action to get an estimate of what the market is more likely to do in the near future. It is also important to understand that TA is a process that assists with making more structured decisions when it comes to your trading strategy. It is NOT a strategy substitute. Many participants that are new to the world of speculation often think TA and trading strategy are the same process. I emphasize this idea because this market is fluctuating around a level that offers some opportunity, but it depends on the scope of the strategy you are employing. The 1291 level is a minor support that is the .382 of the recent bullish swing measured from the 1069 low. In strong markets, supports often hold, but simply buying because price is at a projected level is not enough. This is where strategy comes in. Based on my swing trade strategy, this level offers better reward/risk (especially compared to buying it at 1424). What is missing is the confirmation which I evaluate in the form of a reversal pattern such as a double bottom, failed low or pin bar (see example just above the 1069 support level). IF the market can construct a reversal in this area over the next day, then it would offer a chance for a swing trade aiming to capture the next leg up to test the 1540 resistance level (sub wave 5). Otherwise, based on structure at the moment, price is poised to retest the 1206 to 1152 minor support zone which is the .618 area of the recent bullish swing. This zone along with the lower support levels like the 1069 area, or even the 872 to 739 zone offer more attractive opportunities for longer time horizon strategies such as position trades. An important bearish sign to watch that implies the broader correction is in play is IF price breaks below the 1152 lower support boundary. IF that happens, it would be reasonable to expect a retest of the 1069 or lower which offers the opportunity to WAIT for a position trade once price reestablishes stability. Often I will get questions about shorting when I write about lower price possibilities. The reward/risk was attractive for shorts at the time of writing, but there was no confirmation. Eventually a confirmation developed (break of spinning top low), but that is something you must recognize and be within the scope of your trading plan. I do not short these markets because I prefer not to trade on margin, but if I was playing the short side, it would be on much shorter time frames. I would rather take smaller profits and keep risk low on the short side of a bigger picture bullish market. Another thing to keep in mind is IF this market can't build a reversal structure around the 1291 area, and retests the low 1200s, it will negate the smaller impulse wave. This implies the next attempt to retest the high (would be sub wave 5) will more likely unfold as a lower high which I would interpret as a very bearish sign. In summary it is important to keep your evaluation and trade processes separate. TA offers a framework for price evaluation, while the trade process offers a framework to define reward/risk, entry/exit criteria and time horizon. Everything is an estimate, and it is our RESPONSIBILITY to adjust to the market as it CHANGES hence the use of the word "IF". TA helps to interpret these changes in a way that is relevant to market intentions, and not our thoughts or feelings. Buying a retrace in a strong market is a best practice, but it requires a more rigorous process in order to time that position in a more beneficial way relative to risk. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
24