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Terminalshakeout

IQ Apparently in Wycoffian Terminal Shake Out (compare Silver)Introduction Bitcoin's recent markdown has put Wycoff and Distribution on a lot of new traders radar as well as investors who have not had to deal with this kind of pattern recognition. There were a lot of people that thought that it looked too picture perfect so disregarded it, Guess what? They were taken the most by surprise and I know what it is like to be there because I was there 3-4 years ago when I had problems believing in TA because so much of it so so bad. That leads to good news on IQ as IQ appears to be in Terminal Shake out and it is looking picture perfect. I have marked out the lower end of the action and have left the top alone because I think the indicators have done a good job showing that resistance. The volume on the final stage of the shake out is lower than what took us edge to edge on the bollinger band and value VPVR value area and this low volume helps us see that sellers are approximately exhausted. Another way to confirm the fact that the selling was relatively low volume is the Value Area did not move down. Much like a slow but persistent sell off can slowly bend a bollinger band lower and lower it can also drag the value area down. I have been watching IQ for a couple of years now and have a couple of posts. My last post was bullish and I was going to update it when I bought some calls and I never pulled the trigger. This time is a bit difference. I have the stock and I have some OTM calls already on the books. It might go lower somehow but my entry this week is pretty solid for a long term hold and I hope to trade the options like a degenerate. Indicators I have put the monthly bollinger band on the weekly chart to show that price actin has gone below the monthly bollinger band. That is a very solid entry point if you generally have any faith in the long term outcome of an asset. Price has also gone below the Volume Profile Value area which contains +/-1 standard deviation of volume by price. When price goes out of the Value Area to the downside when it recovers you often see price actin go coast to coast and end up at the top of the value area. If price action is as bullish as I expect price can hop out of the limits of the BB and VPVR Value area as you can see in silver. From there price would enter into a multi-month re-accumulation. The On Balance Volume with EMAs also has a bollinger band that I often don't show in my posts because if it isn't needed it just adds visual distractions. But the circles have shown times were a green week after a massive sell off has kinked the OBV at the bollinger band and price action has recovered. If you look at the second blue circle you can see how above the Volume Profile Visible Range moved down. That means the sell off hit a tipping point and was significant to move the whole visible range down roughly $5. That VPVR has not moved down in such a serious way with this dump. Silver Below is silver with the bollinger band and VPVR during the "Covid crash" and we can clearly see that buying with price action below both was a fantastic entry for a trade or investment. You should have the tools from the main chart to see all the key points of Accumulation. And I roughly expect something similar to happen with IQ. A rather quick move to or above the Point of Control and then a massive spike in price. I have not used the On Balance Volume because silver futures are a different beast with a different history. Fundamentals and Conclusion I think IQ has a very strong chance of behaving like silver did after its dump, so I bought some. Silver sold off for no good reason, as it didn't lose its industrial or intrinsic value and it is not like you can spread a virus by contaminating a silver mine and IQ sold off because some over-leveraged hedge fund degenerate couldn't answer his margin call, his stuff got liquidated and the momentum traders took this way too low. There was earnings a couple of days ago and it seems that the company can turn a profit within like, 5 years. Look at Facebook and Netflix below and how long it took these companies to have their stock clear the high of their first month of public trading. There is going to be a shake out off the weak hands. My only concern is a rout in tech stocks could take this lower but so far it is doing well.
NASDAQ:IQLong
by This_Guhy
3
BTC/USD 1D/1M charts (11/20/2018)Good morning, traders. I was wrong about a pop back up after price breached the $4900/$5000 level and price has continued to move through lower areas of liquidity and support with only minor pauses. This is why I have yet to take a long position. Emotional trading and/or lack of patience are the most significant reasons why retail traders lose money. While waiting for a good entry doesn't guarantee you will be profitable, it does decrease your risk exponentially. Since trading is speculation, protection of capital should always come before growth of capital. That being said, we appear to be bouncing out of $4200 which is the next area of support. So, what have I been looking for in terms of confirmation? As I mentioned during the live streams, I am waiting for a nice hammer or other strong bullish candle on the 4H TF, at the least, but preferably on the 1D, 3D, and/or 1W. Additionally, a bullish engulfing candle on one of those larger TFs would also qualify as confirmation of a bounce at the very least. This should be preceded by a lot of very negative sentiment noticeable throughout social media (which I believe we are in the process of seeing). Although volume is higher on this week of downward movement than it has been lately, the reality is that it is very small compared to the Selling Climax in February. This leads me to believe that the current shakeout is a #2 Spring which is most readily associated with a Terminal Shakeout. Whereas the #1 Spring in February is denoted by the large and increasing candle spreads and expanding volume (large drop with large supply), the #2 Spring is denoted by large and increasing candle spreads but only moderately expanding volume (large drop with moderate supply). The question is, is this the 21 or 23 version of #2 Spring? We need to continue watching price action and volume to get an idea. If you have been paying attention, then you will have noticed that Bitfinex Longs have been increasing steadily during this downswing. Why is this important? Because you should have noticed that a significant number of longs have been liquidated as well. This means that more Long positions are being opened than closed on the down move suggesting absorption. Additionally, Shorts have continued to build as price dropped further. This leads me to believe that smart money is going long while retail is going short. Possible support for such an analysis can be found in social media as the general sentiment is despair and pain. These Shorts will help fuel the move up as much of the supply should have been removed during 2018's accumulation as well as the recent shakeout. Any strong movement back up should see retail traders FOMOing in as well thereby accelerating that rebound. There is no guarantee that all of this will happen, but it remains the most likely scenario at this time, once this shakeout is complete. The 1D has printed a large descending wedge of approximately $1200 width at its widest so far. This wedge also has the requisite four alternating touches to support and resistance. What does this mean? It means that if price happens to close above the descending resistance of that wedge, before making a new low, then we should be looking for a target of $1200 above that point. Consequently, the recent low and subsequent bounce so far has been a reaction to the 1M OB which I pointed out during yesterday's live stream. There should be an expectation of resistance at $5000 and the bottom of the 2018 TR at around $5800/$6000. A close above $6500 sets up strong additional bullish momentum. There is further support around the $3600/$3700 level. Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
BITSTAMP:BTCUSD
by Chris_Inks
BTC/USD 4H/1D charts (11/19/2018)Good morning, traders. Welcome to Monday and it may not be the Monday many of you had wanted or planned for unfortunately. As I said on Friday, I was expecting volatility by the beginning of the week and here we are with fresh lows as price pushes toward that liquidity just below $5000. This is why I did not go long yet. As I explained during the live streams, what is happening right now was a distinct possibility so the least riskiest option was to wait and see if it happened or re-evaluate price around $6000 if it went up instead. The current drop in price has been printing bullish divergences across just about every TF. The 1D RSI has now hit 14.5, which is significant as is the length of time it has spent in oversold (almost a week now). Price has hit a low of $5050 so far but is encountering a lot of support. I will be watching for an SFP by the end of the daily candle which would require a close above the November 15th low of $5199.80 on Bitstamp. However, that swing low was only a few days ago and SFPs are most powerful when they are separated from the swing low for a greater period of time. Nonetheless, an SFP should result in a decent bounce at the very least. 4H price is attempting to print a steep descending channel with support being found at the equilibrium at this time. I say "attempting" because a channel requires four alternating touches of support and resistance but there are only three so far. If price bounces from/near its local low then, using the width of the descending wedge which would result, we should expect price to target about 775 sats above the breach of the pattern and this would put price right back above $6000/$6100. This 775 sats also happens to be the width of the channel, so even if price prints the channel and then breaks the channel's resistance, we would still expect a move up of about 775 sats from that point. As I mentioned last week, the 1D S4 pivot sits around $4900, so with this morning's move down I wouldn't be surprised to see it targeted. That doesn't mean it will make it that far down, but an attempt to do so would tap the liquidity just below $5000 as I have been talking about and should cause price to rebound sharply, especially with the very low 1D RSI. The 4H S1 pivot sits at $5043 and is currently supporting price. The 4H chart is printing bullish divergence as I type this, but traders will need to monitor price action closely to see whether or not this plays out. The lower lows in price are set so any further downward movement is fine, but we would need to see MACD and/or its histogram printing a higher low. With the local TR playing out as it has, this could very well likely be a terminal shakeout for that TR. WAVES is seeing a heck of a pump right now, XRP continues to rise as well, and XLM seems to be holding its own. There are likely to be many great buying opportunities as a multitude of alts are significantly in oversold territory on their RSI as well as bouncing off pivots. The two biggest issues most retail traders are experiencing at this moment are emotion and lack of patience. How can we tell? Because of the number of BTCUSD longs and shorts that continue to get liquidated due to this morning's volatility. Retail traders are jumping in and YOLOing their positions (i.e. throwing money at max leverage and praying that price moves the way they want it to). At this point, price has hit my first target area between $5250 and $5460. We may see a bit more downside, however, which would tap liquidity sitting just under $5000. If price happens to make it that far down, my expectation at this time is to see a good-sized candle as price rebounds out of that liquidity. The buildup of shorts on the shakeout should help fuel upward momentum. I expect to see a Test around the bottom of the 2018 accumulation TR ($5900 area) before continuing higher once buying picks up, but depending on just how much supply has been removed from the market, price may overshoot that level. Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
BITSTAMP:BTCUSD
by Chris_Inks
2
BTC/USD 1D chart (11/15/2018) Price up?Good morning, traders. I hope you were able to join the live stream yesterday morning as we discussed exactly what happened, calmly and unemotionally (okay, so I may have laughed a bit) -- how it was playing out as I suggested it would months ago if we saw a terminal shakeout and what to expect next. So far, things continue to play out as expected. The next few days are crucial, however, in determining which way price is likely to go. The reality of it is that the 1D RSI is obscenely low at 14 and the 4H remains oversold at 9 after closing at an anemic 5.5 yesterday morning. We even see the 3D moving into oversold territory this morning. This means that we should expect a good bounce at the very least. No, it doesn't happen immediately, but it should happen sooner rather than later. As such, traders should be paying attention to the 1D chart. Not all price drops are created equal. So, what do I believe happened yesterday? I believe it was a terminal shakeout. A normal shakeout/spring is initiated during a bullish/upward trend and is a product of, or otherwise characterized by, weakening price. A terminal shakeout, however, is preceded by a trading range and comes at the end of accumulation, signalling that the preparation for mark up is complete. If you've been following me for a few months then you know price had been in a tight TR since the end of the first week in September. That's just over 2 months. You can also zoom out and notice that it had been in a larger TR since the Selling Climax on February 5th. Whichever you choose to look at, the reality is that this drop came after being in a TR for quite a while making it much more likely to be a terminal shakeout than a normal drop toward $3000 as the result of a descending triangle. The purpose of the terminal shakeout is to scare the remaining weak hands into selling their asset prior to mark up commencing by creating a false impression of the direction of the market thereby creating a "bear trap." It does this by running stops on longs and encouraging short selling. Once the shorts are locked in and stops have been run, price reverses causing shorts to liquidate or cover as well as FOMO into longs from those sitting on the sidelines. Watching tucsky.github.io we were able to witness longs' stops getting triggered and numerous, significant, liquidations. Bitfinex shorts grew 8500 in the past 24 hours. That's 45%. And of course www.coinfarm.online showed Bitmex shorts growing substantially as well, causing the funding rate to flip strong and hard to shorts paying exponentially more to longs (www.coinfarm.online). Remember, all contributors to the market affect price finding, so although Bitfinex is having its own issues with the new bank and Tether's value, and Bitmex deals with swaps, rather than spot, these things help us get a clearer picture of what's going on in the market. The terminal shakeout results from poor quality supply which is another way of saying weak hands hold too much supply. It is then answered with high quality demand. The key in all of this is how much supply is removed from the market and how much of that supply is absorbed. This will become much more clear in the next few days. So far, we saw large volume on yesterday's drop suggesting that C.O. was hard at work absorbing the supply. We continue to see good-to-decent volume today, suggesting the same. Importantly, the volume yesterday was much lower than the SC in February which tells us that there is much less supply floating around than there was back then, further suggesting 2018 has likely been accumulation. At this point, price has hit my first target area between $5250 and $5460. We may see a bit more downside, however, which would tap liquidity sitting just under $5000. If price happens to make it that far down, my expectation at this time is to see a good-sized candle as price rebounds out of that liquidity. The buildup of shorts on the shakeout should help fuel upward momentum. I expect to see a Test around the bottom of the 2018 accumulation TR ($5900 area) before continuing higher once buying picks up, but depending on just how much supply has been removed from the market, price may overshoot that level. Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
BITSTAMP:BTCUSD
by Chris_Inks
6
BTC/USD 15 min/4H charts (11/14/2018)Good morning, traders. Binance completed the update to its platform overnight and Bitcoin price continues to feel pressure. With CBOE expiry later today, traders must remain vigilant if they are interested in trading this area as we could likely see price pop up at/near that time. However, we may see more movement down toward $6100 first. Notably, 1D OBV has continued to rise as price has dropped since the October 11th Spring/TR low. Remember, price follows volume, so with OBV continuing to rise it should be expected that we will see price do so as well. The 15 minute MACD is printing bullish divergence as I write this. RSI is dipping back into oversold as well. Price has now printed a likely descending channel from November 11th through today and price is bouncing off the bottom as it creates that bullish divergence. Traders should watch for a breach of the descending black dashed line and then the descending blue dotted line. Breaching those should have price targeting the top of the descending channel, and of course a breach and close above that should have price targeting the top of the black TR around $6450. The 4H chart shows the potential for price to fall to around $6025/30 before heading up based on the largest width of the blue descending wedge. If so, then it would likely stretch RSI strongly into oversold on many TFs thereby resulting in a strong rebound. If the 4H candle at that time dips below the October 10th low and then closes above it, that will create an SFP (swing failure pattern) and we should expect price to rebound. Ultimately, we are watching for price to push through the upper black horizontal line which denotes the top of the resistance area at the $6800 level thereby creating a show of strength (SOS). The expectation at that point would be retracement and consolidation around that upper black horizontal line (possibly printing a pennant) in the form of a "back up to the edge of the creek/last point of support" (BUEC/LPS) followed by another SOS above $7000. If that SOS-to-BUEC/LPS prints a pennant around $6800, then at this time we can expect a target of around $7600 when price breaks the pennant's resistance. This would complete the complex fulcrum and should signal the bull market is likely in effect. Remember, a breach of $8500 gives us the higher high that we've been waiting for and would likely be a strong buy signal to many traders sitting on the sidelines. After that, $10,000 becomes the next signal, and then of course the February high around $11,780. Remember, you can always click on the "share" button in the lower right hand of the screen, under the chart, and then click on "Make it mine" from the popup menu in order to get a live version of the chart that you can explore on your own.
BITSTAMP:BTCUSD
by Chris_Inks
6