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Backwardation

Bitcoin Daily Update (day 311)Disclaimer: If you are primarily interested in copying other people’s trades then this is not for you. However, if you are willing to put in the work that it takes to learn how to trade for yourself then you have found the right place! Nevertheless please be advised that you can give 10 people a profitable trading strategy and only 1-2 of them will be able to succeed long term. If you fall into the majority that tries and fails then I assume no responsibility for your losses. What you do with your $ is your business, what I do with my $ is my business. Click here for my Comprehensive Trading Strategy | Click here for my Comprehensive Trading Process | Click here to learn about the 2 BTC' to 20 BTC' Trading Challenge *Using Weekly Chart* Consensio: P < M MA < S MA < L MA Patterns: Phase 7 hyperwave | Bear Channel Horizontals: S: $3,483 | R: $3,760 Trendline: Testing bear trendline that starts at the ATH | Bear Channel Parabolic SAR: $4,975 Futures Curve: Backwardation with 4.19% spread BTCUSDSHORTS: Appears to be creating higher low Funding Rates: Longs receive 0.1171% TD’ Sequential: R2 = R1 Ichimoku Cloud: Watch for resistance from the Tenkan-Sen at $3,774 Relative Strength Index: At 35 Average Directional Index: At 33 with -DI > +DI. Strong signal that we are only half way through this sell off that started from $6,000 Price Action: 24h: -4.2% | 14d: -12.1% | 30d: -8.3% Bollinger Bands: Recently tested bottom band. MA at $5,046 Stochastic Oscillator: Recrossed bearish < 20. Summary: The Average Directional Index is very interesting. It is my strongest indication that we will get another leg down from here. The Visible Range Volume Range is painting a very interesting picture. Gap's in volume are highly likely to get filled, at one point or another. Both of my most likely outcomes would do just that: A) Bounce to $5,200 - $5,800 before selling off to $1,000 - $1,400 B) Breakdown $3,000 support, capitulate to $1,000 - $1,400 and then get a massive V bottom type of bounce to $5,200 - $5,800 My strongest indication that we will move up from here is the backwardation in the futures curve that saw it's spread widen during this last little move down.
BITSTAMP:BTCUSD
by Sawcruhteez
8
Bitcoin Daily Update (day 310)Disclaimer: If you are primarily interested in copying other people’s trades then this is not for you. However, if you are willing to put in the work that it takes to learn how to trade for yourself then you have found the right place! Nevertheless please be advised that you can give 10 people a profitable trading strategy and only 1-2 of them will be able to succeed long term. If you fall into the majority that tries and fails then I assume no responsibility for your losses. What you do with your $ is your business, what I do with my $ is my business. Click here for my Comprehensive Trading Strategy | Click here for my Comprehensive Trading Process | Click here to learn about the 2 BTC' to 20 BTC' Trading Challenge Consensio: M MA < S MA < P < L MA Patterns: Phase 7 Hyperwave | Bear Channele Horizontals: S: $3,609 | R: $3,777 Trendline: Bear Channel Parabolic SAR: $3,838 Futures Curve: Backwardation with 3.85% Spread BTCUSDSHORTS: Trying to form higher low Funding Rates: Longs pay shorts 0.01% TD’ Sequential: G2 = G1 Ichimoku Cloud: Price breached cloud but did not close inside Relative Strength Index: Looks like it is forming h&s < 50 Average Directional Index: Rejected the 20 boundary line Price Action: 24h: +1.8% | 14d: -3.1% | 30d: -9.7% Bollinger Band Width: Could be bouncing from an area of support at 0.1215 Stochastic Oscillator: Diverging bullish Summary: I am not very interested in Bitcoin until it gets a daily close > $4,100. It could range like this for weeks and as like as the backwardation is prevalent with such a wide spread I am going to be leaning bullish. What is interesting to me is the volume that Ethereum has seen over the past two months. It seems to be leading the bear market and if it can rip through the new bear trendline & the L MA on the weekly chart then it might lead the whole market into strong bounce. I will continue to say that breaking down from here could be a perfect recipe for capitulation / the bottom. If we do bounce then it will only prolong the inevitable.
BITSTAMP:BTCUSD
by Sawcruhteez
Bitcoin Daily Update (day 309)Disclaimer: If you are primarily interested in copying other people’s trades then this is not for you. However, if you are willing to put in the work that it takes to learn how to trade for yourself then you have found the right place! Nevertheless please be advised that you can give 10 people a profitable trading strategy and only 1-2 of them will be able to succeed long term. If you fall into the majority that tries and fails then I assume no responsibility for your losses. What you do with your $ is your business, what I do with my $ is my business. Click here for my Comprehensive Trading Strategy | Click here for my Comprehensive Trading Process | Click here to learn about the 2 BTC' to 20 BTC' Trading Challenge Consensio: P < S MA = M MA < Bullish L MA Patterns: Phase 7 hyperwave | Bear channel Horizontals: S: $3,580 | R: $3,673 Trendline: Bear Channel Parabolic SAR: $3,862 Futures Curve: Backwardation with 3.95% spread BTCUSDSHORTS: Appears to be finding support at 21,300 Funding Rates: Shorts pay longs 0.0321% TD’ Sequential: Price flip Ichimoku Cloud: Bearish kumo twist Average Directional Index: Still threatening to cross 20. Price Action: 24h: -0,1% | 2w: -5.4% | 1m: -2.1% Bollinger Bands: MA at $3,750 which is in confluence with the bottom of the cloud Stochastic Oscillator: Still creating higher highs and higher lows Summary: Over the past four days the price has not moved a percent. Even though that is the case we still got some significant changes. Consensio is almost fully bearish. The only thing left would be for the L MA to flatten / roll down. If we continue to consolidate below it for much longer then that is exactly what will happen. The Ichimoku Cloud recently had a bearish kumo twist and the Tenkan-Sen is diverging from the Kiju-Sen in a bearish manner. It is fully bearish. The Stochastic has managed to stay bullish throughout all of that which is interesting. Yet again the only important indicator that is telling me to be bullish is backwardation and it is important enough for me to expect continued consolidation / a dead cat bounce as long as that is the case. The spread is wide which makes me things we are still a ways from reentering Contango.
BITSTAMP:BTCUSD
by Sawcruhteez
Bitcoin Daily Update (day 305)Disclaimer: If you are primarily interested in copying other people’s trades then this is not for you. However, if you are willing to put in the work that it takes to learn how to trade for yourself then you have found the right place! Nevertheless please be advised that you can give 10 people a profitable trading strategy and only 1-2 of them will be able to succeed long term. If you fall into the majority that tries and fails then I assume no responsibility for your losses. What you do with your $ is your business, what I do with my $ is my business. Click here for my Comprehensive Trading Strategy | Click here for my Comprehensive Trading Process | Click here to learn about the 2 BTC' to 20 BTC' Trading Challenge Consensio: S MA < P < M MA < Bearish L with recent death cross Patterns: Phase 7 hyperwave | Bearish Channel Horizontals: S: $3,512 | R: $3,700 Trendline: Bear channel Parabolic SAR: $3,970 and starting to accelerate down Futures Curve: Backwardation with 3.5% spread BTCUSDSHORTS: Trying to form higher low, but struggling. If breaks down 22,277 then will be watching for double bottom at 19,834. If That breaks down then I expect a retest of the bottom of the range at 10,000 Funding Rates: Longs receive 0.0156% TD’ Sequential: G2 = G1 | Would pass on bullish entry if trades above due to bearish 9 MA waiting right there. Ichimoku Cloud: Absolutely loving the traditional settings. The price has been stuck to the bottom edge for 10 candles. Average Directional Index: Turning up getting ready to challenge 20 while -DI is > +DI Price Action: 24h: +3.7% | 2w: -1.3% | 1m: +13.1% Bollinger Bands: MA at $3,770 should be resistance. Stochastic Oscillator: Buy Signal Summary: I am feeling very grateful that Ugly Old Goat shared his expertise about futures curves on a series of Medium posts. That is the only thing that kept me from going short yesterday when everything else appeared to be breaking down. Consensio was fullish bearish, we closed below the cloud and below horizontal support. Nothing else would have kept me out of a short and it is such a strong indicator that it actually made me feel comfortable about holding onto the XRP long. The more you follow certain indicators and see them work the more you will gain confidence in them. Seeing the bounce today really exemplifies that for me. It makes me really excited about adding that to my toolbelt. From here I will be watching for a close > $3,800. That would put us back into the cloud, above the MA on the Bollinger Band and above all of the MA’s that I use for Consensio. From here I believe the best entry is to wait for price to breakthrough $4,200 and I will be considering setting a stop buy in that area.
BITSTAMP:BTCUSD
by Sawcruhteez
11
Bitcoin Daily Update (day 304)Disclaimer: If you are primarily interested in copying other people’s trades then this is not for you. However, if you are willing to put in the work that it takes to learn how to trade for yourself then you have found the right place! Nevertheless please be advised that you can give 10 people a profitable trading strategy and only 1-2 of them will be able to succeed long term. If you fall into the majority that tries and fails then I assume no responsibility for your losses. What you do with your $ is your business, what I do with my $ is my business. Click here for my Comprehensive Trading Strategy | Click here for my Comprehensive Trading Process | Click here to learn about the 2 BTC' to 20 BTC' Trading Challenge *Using Weekly Chart* Consensio: P < M MA < S MA < L MA | S MA made first bullish cross with M MA since July and it appears to have immediately reversed. Patterns: Phase 7 hyperwave | Bear Channel Horizontals: $3,500 support being tested | R: $3,592 Trendline: Channel is included on today’s chart Parabolic SAR: $5,170 and accelerating down rapidly Futures Curve: Backwardation is only reason I am not short. BTCUSDSHORTS: Consolidating at support. Will we get higher low or not? Funding Rates: Longs pay 0.01% | Very surprised that longs are paying shorts after the last couple days. TD’ Sequential: Bearish price flip Ichimoku Cloud: Bearish af Relative Strength Index: Finding resistance at 38. Average Directional Index: Shows that bear trend has only just begun. Estimate that we are on the 50 yard line. Volume: Not all too impressed with the volume on the selloff. Would like to see a bar that is closer to the volume we saw on the week of Nov 19. Price Action: 24h: -2.1% | 2w: -7.9% | 1m: +9.1% Bollinger Bands: Didn’t even retest MA on this last move. Bottom band = $2,572 Stochastic Oscillator: Made bearish cross < 20 which is as bearish as it gets Summary: This is a very tricky spot. The daily close below $3,550 support combined with the weekly bearish engulfing is a strong indication to enter short. However the futures market is still in backwardation and I refuse to enter short as long as that is the case. I got whipped around too many times shorting BTC during $6,000 consolidation and I could have avoided every one of those entries if I used the futures curve as my final confirmation. That is the most important indicator to me right now and I will be watching it closely. If the market re enters Contango then I intend to start shorting again. I am as confident as could be that we have not seen the bottom yet, however I also thought this would be an ideal area to provide the support needed for a relief rally. Therefore both sides of the trade are appealing. Great time to sit on my hands and wait for a clearly picture to present itself.
BITSTAMP:BTCUSD
by Sawcruhteez
1
What is backwardation?Hello all, I've been doing a lot of educational posts lately, because price has just been static. For your knowledge, I am still long on bitcoin and believe the bottom is in, but I would like to talk about something that was bullish that does not exist today: backwardation. Backwardation is an economic phenomenon proposed by John Maynard Keynes decades ago in his publication, Treatise on Money . Backwardation is when the futures price of some asset is trading lower than the spot price. What are the implications of this? Well, let's put on our thinking caps for a moment and try to understand economics (something I implore you all to try and do). If something is more expensive now than it will be in the future, that simply means it is more demanded NOW than later (or sudden decrease in supply or both). People are not wanting to wait for something, they want it right now. This is very notable in commodities like oil when sometimes there is a short-term shortage that will be gone later. I live in Texas, and we have hurricanes regularly. When this happens, you will always see gas stations filled with people who are trying to fill up cans of oil so they can leave and not stop for gas because it might not be an option in the near future. This would be an example where backwardation is occurring. This is why it is a bullish phenomenon. It's telling you that for some reason, the commodity is in great demand now. This was happening in bitcoin for quite some time, but is not happening today. Is it bearish? Not exactly, we don't have the full scope. Technically, based on the economic theory, it is neutral. The inverse of backwardation would be, you guessed it, "forwardation" or as is usually called "contango." Contango would be a bearish scenario. Perhaps I will write another article on this later in the future. But, to understand it, you simply work in reverse. Instead of a shortage, you have a surplus etc. Logic is the same. I hope you all learned something by reading this! Understanding economics and game theory is the best skillset you can have to be a thoughtful trader or entrepreneur. Hope this resonates with some of you and you become a student of these disciplines like me. Of course, understanding a lot more is good, but if you can understand these things, you can be the best CEO. A CEO does not NEED to know programming. A great CEO DOES need to see the big picture and how to ride the economic sea strategically. Good luck all, thanks for reading. -YoungShkreli
BITFINEX:BTCUSDEducation
by CantorTechnologies
10
Short crude oil as inventories pile up continues. With crude inventories seemingly increasing week on week since the start of 2017, crude oil price has been trading in a range of $50-55 per barrel. From a technical perspective, the market has rejected price levels from 53s to 55s on 8 different occasions. My view is to stay short on CL while resistance at 55 still holds, key support areas will be 50s to 51s. It's best to watch how the markets react to these levels and adapt to price action accordingly. Key risk: Tensions between US-Iran The Trump administration is moving to impose sanctions after Iran conducted test missiles, with Iran's increasing market presence on oil production, unexpected geopolitical tensions will cut supply on crude oil.
NYMEX:CL1!Short
by RuzainiRashid88