As I Write This We Are Already Beginning To Bounce! ST Long.
Updated
I have been in anguish about that 200 Day Moving Average. When I first started out with technical analysis the first indicator, and buy and sell point I learned about, was the 200. If your mutual fund, stock, commodity etc had a daily close above the 200, it was a buy signal and if it closed below it was a sell signal. While not perfect, using this with selected mutual funds was awesome and could compound gains over a 5 year average period of about 20% per annum. Some buys and sells would be more and some less. You wouldn’t catch the first 20% or the last, but that 60% in the middle was good enough.
In fact, it was crossing the 200 which led me to buy BTC back when it was in the $300-$400 range and HODL.
And here we are today, about to close below the 200. So do we sell?, Take Profit and Wait for it to close above again, securing a hell of a run?
I pondered this question for the last week. The answer is no.
We’ve come a long way since I learned this technique. And to be honest, that 200 can be a real whipsaw for buy and sell signals, as well as strong support in this case/chart.
So where do we stand?
Elliot Wave (Not Shown) places us at the end of Wave 5 in this correction. We are currently in the bounce zone of 6000-7000, and possibly as low as 5000. As I was writing this I was looking at the daily and we were firmly in the 6500-6700 range. Between the time I looked at the chart and began to write, we jumped on heavy volume to 7200.
Volatility has picked up as those that bought high are now vomiting on their shoes after buying at the peak and are scared of the dip, while those with some handy cash are picking up cheap coins.
On the chart above you can see three things that stand out, the price dipping below the 200, the price clearly in the low red zone of the fibs showing we are very oversold, and that darn 50 day moving average slanting down. Those that follow me KNOW I keep a firm eye on that 50.
Stochastic and MACD are also showing oversold conditions. I expect they will begin to angle up soon as well as we move higher.
What we can expect from here:
The 50 began to concern me as it started to angle down a couple of weeks ago. The 50 is my major indicator for the longer term trend. It is the MEAN price, the average for what BTC should be in dollars. In technical analysis, price always reverts to the Mean eventually, and prices can be measured as oversold and overbought accordingly. The angle shows you direction. Angling up is an uptrend, angling down is downtrend and also it can be flat. Never trade a flat 50....which is why I waited.
It is unfortunate, but we are now in a downtrend, albeit this is temporary. We are going to take advantage of a trade at this point. We are simply waiting to execute.
Since we are already bouncing or about to, we must calculate where the bounce will end so we can sell at a higher price, wait in cash or USDT and rebuy lower for more coins. It would have been great to catch the high at 20k, but things were moving so quickly, the execution was near impossible without a lot of slippage. Had I paid more attention to the extreme indicators, like a cook at the local greasy spoon telling me he had bought bitcoin, and a gambler I know who always loses telling me the same thing I would have taken that as a selling point for higher profits.
Kidding.....but actually true stories.
We do what we can do, and nothing in trading is an exact science. My goal is accumulate more coins either by trading or purchasing and then getting out at $100,000. I don’t need a lambo. I’d like a beach front property.
That being said, this trade is easy. See below for more info as Tradingview is only letting so many words for this post.
In fact, it was crossing the 200 which led me to buy BTC back when it was in the $300-$400 range and HODL.
And here we are today, about to close below the 200. So do we sell?, Take Profit and Wait for it to close above again, securing a hell of a run?
I pondered this question for the last week. The answer is no.
We’ve come a long way since I learned this technique. And to be honest, that 200 can be a real whipsaw for buy and sell signals, as well as strong support in this case/chart.
So where do we stand?
Elliot Wave (Not Shown) places us at the end of Wave 5 in this correction. We are currently in the bounce zone of 6000-7000, and possibly as low as 5000. As I was writing this I was looking at the daily and we were firmly in the 6500-6700 range. Between the time I looked at the chart and began to write, we jumped on heavy volume to 7200.
Volatility has picked up as those that bought high are now vomiting on their shoes after buying at the peak and are scared of the dip, while those with some handy cash are picking up cheap coins.
On the chart above you can see three things that stand out, the price dipping below the 200, the price clearly in the low red zone of the fibs showing we are very oversold, and that darn 50 day moving average slanting down. Those that follow me KNOW I keep a firm eye on that 50.
Stochastic and MACD are also showing oversold conditions. I expect they will begin to angle up soon as well as we move higher.
What we can expect from here:
The 50 began to concern me as it started to angle down a couple of weeks ago. The 50 is my major indicator for the longer term trend. It is the MEAN price, the average for what BTC should be in dollars. In technical analysis, price always reverts to the Mean eventually, and prices can be measured as oversold and overbought accordingly. The angle shows you direction. Angling up is an uptrend, angling down is downtrend and also it can be flat. Never trade a flat 50....which is why I waited.
It is unfortunate, but we are now in a downtrend, albeit this is temporary. We are going to take advantage of a trade at this point. We are simply waiting to execute.
Since we are already bouncing or about to, we must calculate where the bounce will end so we can sell at a higher price, wait in cash or USDT and rebuy lower for more coins. It would have been great to catch the high at 20k, but things were moving so quickly, the execution was near impossible without a lot of slippage. Had I paid more attention to the extreme indicators, like a cook at the local greasy spoon telling me he had bought bitcoin, and a gambler I know who always loses telling me the same thing I would have taken that as a selling point for higher profits.
Kidding.....but actually true stories.
We do what we can do, and nothing in trading is an exact science. My goal is accumulate more coins either by trading or purchasing and then getting out at $100,000. I don’t need a lambo. I’d like a beach front property.
That being said, this trade is easy. See below for more info as Tradingview is only letting so many words for this post.
Note
We are waiting for the bounce and prices to take us back to the Mean at the 50. It will either bounce up and hit it, or through it, but this is the general target. Currently, that will take us to somewhere around 
13K, maybe 12, maybe 14. We will see when we get there as the 50 will continue to adjust with the chart. We will watch the stochastic, the MACD and also the Parabolic SAR for indications that we have run the full cycle higher. Then we get out before prices fall again. We will probably retest the 200 at this point. We will keep an eye on Elliot and exhaustion signals again and buy back in accumulating more coins, ride back to the Mean at 50. We may rinse and repeat if this is possible to continue accumulating. Once that 50 begins to angle up again, we ride it and HODL. I expect much higher prices by December 2018.This os the opportunity of a lifetime.
Note
I feel that this gentlemen’s analysis of Elliot Wave will fill in some gaps in my chart, since I did not specifically add EW to mine.
Note
Added a Tom DeMark count to the wave down. It looks like we have one more candle to reach 9 before we can look for a reversal. It could go to 13 but we are certainly in the exhaustion area.Note
Countdown without all the other indicators. What we are looking for is the 9-13 candle to signal exhaustion. The 9-13 must close lower than the 4th candle previous to it, so just count back 4 candles from the last (currently #9) and you can see we are right on target. All of this TA puts us in the range for reversal soon. Expect a move up soon. Note
Bitcoin is in a nice recovery and there is a correlation between BTC and the Nasdaq 100. Nas is due for bounce and this will bring up bitcoin further. I am looking at 12k-13k for this leg.Note
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.