Get started

Bearishmomentum

EURUSD: Avoid The Middle, Wait For One Of These Levels.EURUSD update: This market is in a clearly defined range between the 1.2150 low and 1.2550 high while the big picture is still bullish. Traders often put too much weight on fundamentals while participating on the smaller time frames and this is a mistake. Short term ranges like this one offer day trade and swing trade opportunities both long and short. The key is having profit expectations that are in line with the technical structure of the market. As you can see, price fell out of the 1.2379 to 1.2410 resistance zone (.618 of recent bearish swing) upon the formation of a bearish pin bar. This should be not surprise. Since I am not short at the moment, the best I can do is wait for another setup. This can unfold upon a retest of the resistance zone again (all depends on price action in the zone). Or I can wait for a long setup within or just below the 1.2268 to 1.2220 area (.618 of recent bullish structure). 1.2181 is the reversal zone boundary which offers the most attractive area for a swing trade on the long side. Keep in mind, considering the context of the bigger picture, swing trade longs have more potential than shorts. It is this context that should govern your profit target choices. Based on the big picture (you can see the my Elliott Wave chart on S.C.) this market is poised to go higher. As long as the wave counts stay intact, I will continue to expect more from longs. A bullish break out of this broad consolidation can take this market back toward the 1.3000 area over a number of months.
by MarcPMarkets
1
BTCUSD: The Crowd Losing Interest? Time To Do The Opposite.BTCUSD update: The first bearish trend line is in the process of being compromised which is a bullish sign. The problem is, this market is becoming more sluggish than expected. As this market takes its time to form a possible bottom, it is important not to lose sight of the most reasonable possibilities. The 6970 level is where the first bearish trend line is located. You can observe from this chart that previous attempts to break above the trend line has been met with swift selling. This time, the selling (small upper wicks on current and previous candles) is not so swift. This indecisive price action can be interpreted as an absence of selling, or a quiet accumulation which has been going on for at least a week now (the previous minor upswing). You can also make the argument that this initial bearish trend line is still in play since it has not been broken with any conviction. With this in mind, price can still reasonably retest the 6204 level before mounting a reversal. In order to reduce the chances of this scenario, this market needs to clear 7492 which is the .382 of the recent bearish swing. I would consider a close above that level as a form of confirmation that bullish momentum is regaining control. Until then, I would still be open to the possibility of price retesting 6204 or even 6K. In summary, one of our authors on S.C. (Gillian) wrote about a very interesting and telling observation about the level of interest in this market. She described how the Google searches related to Bitcoin trading has dramatically declined. This is very typical of the herd mentality. The main stream loses interest, the media stops hyping about it, and the opportunity to buy at some very attractive levels goes unnoticed. In my opinion, this is the best time to build a position. Not at 12K, not at 16K or 18K. That is when the crowd will get excited to buy, and the smart money unloads their cheaply acquired inventory for profit. Less experienced investors who do not understand the concepts of market sentiment, are impatient and want this process to happen now. It can take a year. As long as the technology and ecosystem are expanding, it is just a matter of time. The best thing you can do is accumulate small, and then find the alts with the highest potential, and invest into those. That is where the growth opportunity is (did you see the OMG signal on S.C?) Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
4
BTCUSD: Slow But Still A Good Level To Buy.BTCUSD update: Price has not made a new low while breaking above the 6864 previous candle high. This is a bullish sign which is especially emphasized since a long trade was called on S.C. yesterday. Now this market needs to follow through by breaking the bearish trend line and eventually taking out the 7492 level. The next relevant resistance is at the 8090 area. The 6K psychological support is holding. The 6204 reversal boundary was never touched while price finds some support near the 6805 level which is a reversal zone boundary relative to the 7240 low. The process is slow, but the market is telling us something here. If it was majorly weak, it would not waste any time and blow through the 6K low, not hesitate. This price action can be interpreted as a decline in selling pressure, and with short interest so high, this is can lead to a serious squeeze as shorts are forced to cover and become motivated buyers. What is lacking in this market is a significant bullish catalyst. With all of the macro economic drama, it is almost like the world is not paying attention to this market at such an attractive area. Usually in situations like this, some piece of news will hit the market unexpectedly and cause a reaction. There is no way you can measure this using technical analysis. Instead, TA helps you to position yourself to capitalize on where the market is going anyway, the news just pushes prices faster. IF price closes above the bearish trend line in the low 7Ks, followed by a close above the 7490 level (.382 of recent bearish swing), then it will have a much better chance of reaching the 8091 to 8543 resistance zone (.618 of recent bearish swing). For those who are entering swing trades at the current level, the 8091 area serves as a good initial target to lock in some profit. If you are in a longer term trade, it makes more sense to wait for broader resistance levels in the mid 9Ks and above before locking in some profit (this all depends on what your average entry price is). In summary, when the mainstream loses interest in a market, which often happens after a long and drawn out unfavorable environment, it is usually a good time to invest. For anyone who remembers, back in 2013, this market reached 1K for the first time and it was quite an event. Once it reached its peak, it then spent the next 2 YEARS gyrating in an uneventful, boring market that went as low as the 200s. I remember articles being written about how this market was a failure, etc. It then went to 20K as we all know. So much for being a failure. Even though we are in a much different environment with many new factors driving this market, human nature is still the same. This market in particular is a deflationary asset, which means it has a built in bias to go higher over time. Unless something seriously changes fundamentally, I am a long term buyer, especially when the market is beat up by short sighted and reactive participants. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
39
LTCUSD:Accumulate Lightly Or Avoid, But Potential Is Attractive.LTCUSD update: Price is poised to push the 106 low as this market along with the rest of the coins continue to follow BTC's bearish sentiment. All of these markets are at attractive locations when it comes to putting on position trades but until buyers establish themselves, either stay out, or accumulate lightly. The 118 level was relevant, until price could not mount a meaningful rally and failed to break the bearish trend line. This opens the door to the failed low possibilities which would establish that the selling is drying up and set all of these markets up for a short squeeze. I have been talking about this in recent reports. A short squeeze is no different than when a market reaches its peak and falls apart. A failed low is basically a fake out. With short interest being up at record levels, the trade is too obvious. Like buying at 20K and confidently expecting 30K, in this situation the herd is shorting or exiting in anticipation of sub 100 prices. Even though all of the technical structures point to lower lows, it is important to consider the possibility of a broad double bottom which is easy to lose sight of in situations like this. The nearest level to watch is the 102 area because it is the reversal zone boundary relative to the recent 109 low. It is also sitting just above the 100 psychological support which can attract buying as well. If price closes below these levels, the 71 reversal zone boundary becomes an increased possibility. As bearish as this environment looks, I am anticipating the fake out which has not materialized yet. The most conservative action you can take in these markets in my opinion is to wait it out until stability reappears in the form of price structure. This means forfeiting these extreme low prices, and buying after price breaks above 134 and compromises the bearish trend line. If you would rather capitalize on these attractive prices, then the next best thing to do is accumulate small amounts. Cost averaging makes more sense in these markets if you are not using margin. The small amounts are what protect you in terms of limited exposure if there is a dramatic move. If you get too big too fast, as many often do, you put yourself at the mercy of the market. Do not let greed drive your actions because that makes you no different than the herd. In summary, picking tops and bottoms is no different than playing the lottery. If you can comprehend that the bottom is a process, you will be better prepared to capitalize on the extreme price moves and reversal patterns that can occur at locations like this. This market is setting up just like BTC, and what makes it more attractive is the low price and high potential. Keep in mind the next major resistance is in the low 200s and can be reached quickly if the huge short interest gets squeezed (they are forced to become buyers by their own fear, or margin liquidation whichever comes first). Participating in such a move has little to do with technical analysis, and more to do with your ability to embrace risk. The more you can afford to lose, the stronger hand you have. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
11
BTCUSD: Broad Double Bottom Attempt At 6K Support?BTCUSD update: Bearish trend line stays intact as price quickly gives back it's recent gains. The 7492 level was never compromised which means a new low is very possible. The current formation can turn into one of the specific scenarios that I am waiting for to buy more and that is the failed low scenario. In my previous report, I mentioned the possibility of the scenario that is unfolding at the moment and warned against initiating any new longs at the 7400 area. I also mentioned that a market bottom is not an event, but a process. This market can still very well test the 6K low and possibly even go as low as 4559 which is the broader reversal zone boundary relative to the 6K low. The emotional and reactionary nature of this market emphasizes that possibility even more. I want to see a reversal candle like a pin bar establish itself around the 6204 area which is a minor reversal zone boundary relative to the 6425 low. If this happens, it will offer an attractive swing trade opportunity because of the well defined risk, while at the same time offering an area to add to or establish a position trade as well because of its bigger picture location. The reason why I keep bringing up that the bottom is a process is because there is no guarantee that a long signal off of this low will be the bottom. If a signal appears, I will highlight the details on S.C. only. If price falls below 6K, I will be looking for a broader reversal some where between 6K and 4559. A break below 6K will negate the current wave count that I have posted at S.C., and will signal that this market is in a much broader consolidation rather than a Wave 2 bottom. In summary, buying into these lows, as I have mentioned before, from a risk standpoint is more attractive than buying at a short term peak. The problem is momentum is still bearish and you have to be okay with taking pain (do not do this with margin). The more conservative choice is to wait for the nearest bearish trend line to be taken out along with the 7490 level (.382 of recent bearish swing). Then look for the higher low, because with that structure in place, the market will be signalling that the bears are losing control which is not the case at the moment. The current lows offers great prices, but price action says lower prices are still very possible. Which avenue you choose is dependent on your own ability to handle risk, what you can afford to lose and what your goal is (long term hold or short term trade). I am still bullish and will consider both swing trades and adding to my position IF the market can show the setup that I want to see. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
9
ETHUSD: Retrace Offers Insight Into Short Squeeze.ETHUSD update: Across the board these coins have attempted to retrace as they follow BTC's lead. Unlike BTC, this market has managed to break a bearish trend line. This is the first step toward change, but just like BTC, must meet certain criteria before it is reasonable to expect a more significant bullish move. Clearly, everything is following BTC and all have similar price action. Now that the first bearish trend line is broken, the next thing that needs to happen is the break of the 451 level (.382 of recent bearish swing). As long as this level is not compromised, bearish momentum is still in play. This is why I emphasized in my previous BTC report that it is risky to buy the initial lower high, unless you don't mind taking some pain. The pain comes in the form of the next retrace or test to see if the bears are at full capacity (market establishes a lower low). If a new low cannot be established, then that is a sign that a short squeeze is likely. Being that the short interest is at an all time high in BTC, (the crowd is never right at tops and bottoms), it is just a matter of catalyst that can turn this market around fast. Even if the 451 level does not break first, this market can still present a double bottom or failed low situation which would offer great buying opportunities in my opinion. The 374 support (old resistance/new support) and the 344 reversal zone boundary are the levels to watch for these two bullish scenarios respectively. A decent short squeeze can take this market back up to the low 500's to test the broader bearish trend line which can serve as a good potential target to measure reward/risk from. In summary, buying into lows of a bearish environment can be tricky because there is no way to know if the low is in or if this market is going to push a new low. No matter what the trend, a retrace always presents a test that can be used to gauge the strength or lack of strength of the participants that are affecting price the most. Keep in mind, not all new lows are created equal. A failed low is a condition where price goes slightly lower which makes it look like the trend is continuing, only to reverse quickly which is often a sign of hidden strength and means that there are not enough new bears joining the party. Also remember that a bottom is a process, not an isolated event, which means patience often pays in these situations. If this market is bottoming here, there will be plenty of opportunities to get in at attractive reward/risk ratios. Questions and comments welcome (to see a very broad view of this market with a wave count, see my chart on S.C.)
BITFINEX:ETHUSD
by MarcPMarkets
14
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
ETHUSD: Momentum Bearish But Great Time To Accumulate.ETHUSD update: This market has been relatively weak compared to the other major coins but that does not mean it has lost its long term merit. In fact, these are great prices for getting into a top coin that can be used especially for investing into much higher potential alts which are very cheap at the moment. In this market, price has fallen through all major supports, broken below all the reversal zones, and is still restrained by a well defined bearish trend line. Momentum is still bearish and even though price action is attempting to recover along with the rest of the coins in this space, it will require some patience to work with. The 374 support level is one that goes back to the previous year that happens to be an old resistance / new support area and buyers have proven to be present there. The problem is since momentum is still generally bearish, this may just be another pause before testing lower prices. There is no way to know for sure. Even in the face of such bearish momentum, I think this market offers a great opportunity to accumulate a top token that can be used to invest into other much higher potential alts. Which ones? You will have to visit S.C. to read about the ones that we like, but the question is when do you buy this coin? Just like in anything else, there is an aggressive way and a conservative way. The aggressive way is more attractive IF you are flat. People that are just getting into the game now and missed out on all the pain have a chance to buy at extreme whole sale prices. Sure prices can go lower, but I think the bigger picture reward/risk is now biased to the bullish side. Even if you are in and holding from much higher prices, it will depend on your comfort level since you are taking pain already. Buying at these lows goes beyond technical analysis and is based more on the long term view of these markets in general. In my opinion, the lower this market goes, the more of an opportunity to accumulate and build a nice inventory. The conservative way is to forfeit these low prices and look to buy after the bearish trend lines get taken out.The first trend line is around the 420 area. That scenario would signal that the bearish momentum is running out of steam. The second sign you can wait for is a close above 451 (.382 of recent bearish swing). The benefit you gain from waiting for these less attractive prices is that momentum is more likely on your side. Less pain, more gain. This is a better way to go if you have been sitting on a position and would like to wait for more favorable conditions to cost average further. In summary, on a short term technical basis, this market does not look as stable as the others, but if you are looking to use this coin as a means to invest into others, then your timing does not have to be perfect. The best thing you can do is define your goals for this type of investment which will help shape your strategy as these markets eventually stabilize and make their way back. The least effective thing you can do is react to dramatic price action, or worse over exaggerated news which has no bearing on where these markets are going in the future. Success in these markets sums up to your appetite for risk. If you are afraid to lose, you open yourself up to a greater possibility of losing. If you can afford to lose and accept it, you open yourself up to a greater possibility of winning. In other words, scared money never wins.
BITFINEX:ETHUSD
by MarcPMarkets
10
BTCUSD: Don't Pick The Bottom, Let The Market.BTCUSD update: Bearish momentum is driving price toward 6K support as this market pushes through the 6805 reversal zone boundary. Remember there is no way to pick a bottom in a situation like this. The best we can do is estimate where a reversal is likely and let the market prove itself. If the market continues to stay weak, it can go as low as 4559 before reversing. This is where risk management comes into play. I keep getting questions about why I am not shorting this market. The quick answer is I refuse to trade these markets on margin so technically, I can't short these markets. Even if I wanted to, I would only look for opportunities on a day trade basis because the risk of a short squeeze is way too high to hold on at these levels. As I have written before, this situation is no different than when this market was pushing extreme highs. I don't buy highs and I don't short lows. I have been writing about the 8171 to 4983 support zone (.618 of entire bullish structure) for weeks. As long as price stays within this broad zone, I am either looking for signals to add to my position, take shorter term swing trades long or just wait until bullish confirmation returns. I am not going to sell anything at these levels unless I am getting stopped out of a predetermined swing trade. The more conservative thing to do is wait for a reversal to confirm and the scenario that will validate this for me is a close above the 7492 level (.382 of recent bearish swing). This event would indicate there are enough buyers to compromise the immediate bearish trend line. It does not mean this market will go straight up, it simply means momentum is beginning to change. The next step from there would be a higher low formation. In summary, whether this market decides to bottom at the current level, or reverse at 6K, the conservative thing to do is wait it out and let it choose. The only way I would be buying at the current level, is if I had no position at all which is not the case. And that is where risk management comes in. I have enough of a position where if this market keeps going lower, it won't be pleasant, but I will not get shaken out. The only way I will add to this position trade is by waiting for conservative scenarios like closing above a bearish trend line. Overall, as ugly as it looks, 6K is still holding up and can be the bottoming formation that establishes a broad Wave 2 (find the weekly BTC chart on the S.C. site for more on that). Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
18
BTCUSD: 6K Level Is Attracting Buyers, But Is This The Bottom?BTCUSD update: Price is attempting to stabilize just above the 6K low which is a very important level for this market. It just so happens that the buyers are entering around the reversal zone boundary which is not uncommon. This is a very attractive area to accumulate a position, especially if you have been out of the market waiting to get back in. Is this the bottom? There is no way to pin point it, and since momentum has not changed back to bullish, it is still within reason to see price test 6K or slightly lower before a major reversal unfolds. On this chart, I manually created a symmetrical triangle that has a base at the 6K low. For me, this is a visual cue of what the bottoming process looks like. There is no precision to this, it is a cue that highlights how much time there is between the lows. As you can observe, there is over a month which for me points to the fact that selling is relatively slow, and more than likely there is more quiet accumulation going on here. This is what broad market bottoms look like in general. Can price go lower? Yes. Consider where price is. The 8171 to 4983 support zone (.618 of entire bullish structure from the 150 lows) is a wide area where there is a higher probability of price finding stability. So price can reasonably go below 6K and will still be within this zone. Beyond that, there is a reversal zone boundary at 4560 which is relative to the 6K low. So in an extreme situation, price can push into this zone, scare everyone out, and still reverse sharply. These levels help to put these extreme moves into perspective and help you to anticipate what "should" happen next IF buyers are returning to the market. IF price closes below 4560, and does not reverse over the next candle, that is a sign of a much more serious problem and where I sit back and do nothing until the market proves stability again. Often people are confused when it comes to buying now at great low prices or missing these prices in exchange for the market moving more favorably once they are in. This is a trade off. Buying lows in a weak market is a tough game to play, but it is not a bad idea as long as you are careful with your sizing, NOT using margin, and believing in the long term outlook of this market. Keep in mind, if you thought this way at 10K, and bought too much, you now know why I keep emphasizing careful sizing and risk management. It is what I like to call the inventory game, which means you are cost averaging into a market that should come back in the long run. If you would rather forfeit these lows and wait for momentum to be in your favor, then you must wait until price closes above 7581 (.382 of recent bearish swing) . That would be the first sign that momentum is changing back to bullish. In summary, this market has been drifting lower but relatively slowly in my opinion. You can capitalize on this situation and accumulate small positions and continue to add if this market reverses, OR you can take the more conservative route and just wait until the bearish trend lines are compromised. Either way, as ugly as these markets look, I have no interest in being short because for one, I do not trade these markets on margin, and for two the risk of getting caught in a short squeeze is very high just based on the location of where price is fluctuating at the moment. Know you risk, and choose the scenario that is better suited for your personality and goals. Be in a hurry to gain perspective, NOT profit. There is always opportunity somewhere and it is having a good perspective that allows you to anticipate it and capitalize on it, not chase it. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
31
BTCUSD: 6K Low Is Near. Setting Up For Double Bottom?BTCUSD update: Bearish momentum takes price as low as 6614 which is ugly for position traders, but again situations like this call for patience and perspective. The 6K low has not been compromised yet, and even if it is retested, it is very possible that a broad double bottom formation materializes. There are still quite a few technical factors that offer plenty of potential for this market to reverse from the current lows. First, keep in mind that this market is revisiting the broad 8171 to 4983 support zone. This wide range is the .618 of the entire bullish structure originating from the 150 lows. It is around 3K points wide, which means the market can test the 4983 lower boundary and still be within an attractive buying level for position trade strategies. Two additional levels are also important to consider: The 6K psychological support and most recent lowest low, and the 4559 reversal zone boundary. These levels can be used as short targets if you are courageous enough to short these markets into those levels, but I prefer to anticipate the bullish reversals instead. 6K is important because IF price finds buyers there, this market can establish a broad double bottom which offers larger magnitude profit potential (9Ks profit target area at least). The reversal zone is an area where price has a higher probability to reverse sharply if buyers intend to keep this market from falling apart. IF price closes below the reversal zone, I would steer clear of any new long positions until stability returns. At this point, if you do not have a position, or managing a small inventory, then these lows present a very attractive place to add if you can afford to be aggressive. The problem is there are no signs that indicate any strength or reversal is likely. If you are managing a decent inventory (enough to demand your attention) then the best thing to do in my opinion is wait until the bearish trend lines are compromised before adding more. For that to happen, price needs to close above the 8K and 9K levels which means you forfeit the current wholesale prices in exchange for a more favorable and supportive market environment. In summary, I have to repeat this often at these levels, do not react, instead look at the bigger picture and recognize where this market is. It may look ugly, but it is still fluctuating in a technical area where a broad bullish reversal is possible. The way to manage long positions through this is to be conservative with your inventory. If you have too much on, and you can't afford to lose it, then the only thing you can do is lighten it up to reduce risk, but keep in mind you are selling into a major low. I have been long and buying more since January for my position trade and will only add on a swing trade basis which means I will take profit on those units earlier if the opportunities present themselves. Otherwise, I will just be patient and wait for the bottoming process to play out. Based on the current structure, price can go below 6K and can become a double bottom variation or failed low which is the scenario I am anticipating. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
17
LTCUSD: Double Bottom Territory? Wait For Reversal Patterns.LTCUSD update: Price is pushing into extreme low territory as these markets continue to sell off. As I wrote previously as ugly as they look, if you are building inventory and not using margin, then situations like this are buying opportunities. Most importantly, you must not get sucked into the hype. Selling the bottom is the natural choice for the herd, not the trader who is prepared. As bearish as things appear at the moment, BTC has not made new lows. I do not see price below 6K yet, instead it is retesting important supports. Same goes for this market, price is attempting to retest the 118 reversal zone boundary which went as low as 106 previously (twice). There are no signs of reversal so price is poised to go lower. How low can it reasonably go? Based on the 106 low, the next reversal zone boundary is the 71 level. This means price can reasonably make a slight lower low and then reverse dramatically which would appear as a failed low. So the levels to watch are the 118 area, 106, 100 (whole number) and 71 as the extreme. IF a reversal candle establishes itself around any of these levels, that can be the beginning of a broader double bottom formation. Keep in mind, as long as none of these bullish signs appear, you can use the bearish trend line that was established in February as a guide to avoiding any new longs until stability reappears. I have been wanting to call a swing trade in this market, but it refuses to break that bearish trend line, and until that happens, it is reasonable to expect bearish momentum to continue. In summary, the crowd is always wrong at tops and bottoms. We are near a bottom, do not react like a member of the herd. These weak hands are being shaken out as a result of their fear and lack of planning. If you are holding a position trade like I am, it is a matter of holding what you have and waiting it out. The only reason why this can work is because there is no margin involved (it is no different than buying physical gold or silver and stacking it). As a position trader, I'm an inventory manager. When wholesale prices are available, you add to your stack, but carefully. The way to do that in this market is to wait for the bullish signs to return. Remember I am looking at these markets from a long term perspective, I believe in their merit AND I am willing to take the loss IF they fall apart. This is why risk management through careful sizing is so important. Well thought out sizing is what helps you maintain composure in times like this as opposed to reacting to the uncertainty. Don't react, anticipate. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
12
BTCUSD: Signs Of The Bottoming Process.BTCUSD update: Weak prices but no new lows as this market tries to find stability within a multi degree overlapping support area. Often a market bottom is not a simple event, it is a process that unfolds over time. As long as the 6K recent low is not taken out, this market is building a broad base to rally from in my opinion. Right now there is an inside bar in place within the 7980 to 7652 support zone (.618 of recent bullish swing). This zone is overlapping the 8171 to 7239 support zone (.618 of the recent bullish structure off the 6K low) and that is overlapping the 8174 to 4983 support zone (.618 of entire bullish structure since the 150 low). That is a lot of overlap. Now, all the overlap in the world does not guarantee that price will find a bottom here, but it certainly makes for a very strong technical argument for accumulating and holding your coins in this tough environment. In addition to that, there are a series of extreme reversal zone boundaries that are based on recent lows which are 7776, 7401 and 6941 respectively. Any reversal candle off of these levels will be a buy signal according to my plan and criteria that I look for. So what does all this mean? As ugly as this market gets, remember where we are in the big picture. There is a greater chance that a broader bottom develops rather than dramatic new lows which all the hype and herd mentality traders point to. One clue to watch for, especially for people who consume news, is when this market starts shrugging off negative news. Often that is a sign that buyers are absorbing what ever supply is left while no new selling is entering the market. There is NO precise way to measure this relative to the news, it is more of a general observation that helps to put this environment into perspective. A bottom process is one where lows can be retested a number of times, resulting in a lot of false starts and lack of bullish follow through. Just like we are experiencing now. My swing trade was stopped out, but I am looking to get right back in. What needs to happen now in order for me to enter into a more conservative position is to wait for evidence that this bearish momentum is losing its grip. That level for me is a break of the 8230 level (.382 of recent bearish swing). There are a number of ways to play that break which I will explain further on S.C. In summary, higher lows often lead to higher highs and represent underlying strength as expressed by the order flow on the larger time frames. A reversal from the current location which constitutes a higher low formation can lead prices back toward the mid to high 8Ks or higher. Do not lose sight of where this market is trading and get sucked into the herd which is calling for shorts. This is no different than when they were calling for 30K when this market was at 18K. The levels are laid out for you on this chart, it is up to you to determine where you are comfortable taking risk and how much risk. I intend to go long again, and I am going to wait for the confirmation which will cost me the most attractive prices, but what matters more is the market staying on my side in terms of momentum. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
46
ETHUSD: Ugly Markets Very Attractive For Buyers?ETHUSD update: New low made at 448 as price pushes into the next reversal zone and hesitates. New lows are a bearish sign, especially when they are occurring below the major support zone. Is this a signal to get short? To exit altogether? No, as ugly as these markets get, it is important to recognize that they are still in an expanding ecosystem. Remember I am only interested in these markets from a bigger picture perspective. I believe in the technology that is behind these tokens, especially the main ones like BTC, this market and LTC. These are not markets I am interested in shorting, even if I could. If I want to short something, there are other markets that are much more liquid and much easier to access than these markets (Like FX or mini S&P futures). On top of that, if I had easy access and liquidity in these markets, (meaning I do not have to worry about the broker telling me they can't let me cover when I am trying to get out) I would on participate on a day trading time frame because I do not want to stay short a market that is on its lows (especially when its pushing extreme reversal zones). With that being said, there is a reversal zone boundary at 424 which is relative to the 452 low. This means IF price is going to reverse, it needs to do it within this area. IF instead it closes lower with conviction, then I would simply steer clear of any new positions until stability reappears in these markets. What does stability look like? For one, the two bearish trend lines that are in play need to be compromised. Then price action would then have to build a more bullish structure such as a broad higher low or double bottom which would express more of a longer term sign of strength returning. Until those scenarios happen, I would suggest staying out completely, accumulating small size on the lows, or if you are managing a long position, just ride it out. In summary, the current situation reminds me of the way this market was at the highs. The world was euphoric and expecting price to go up forever, now we are in the opposite situation. These markets are full of fear, and it is no surprise that is happening after more institutional players got involved back in December. As long as there is a growing ecosystem and these tokens maintain their usability and relevance, new low situations like this only present very attractive prices to build inventory. I do not care what the news is saying, or the hype, because that information is only being generated to capitalize on the fear. I also want to capitalize on the fear and the way to do it is to buy small and build your inventory while the herd either exits, shorts it or loses interest altogether. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
23
BTCUSD: Pushing Lower, But Don't Overlook Major Support.BTCUSD update: Price has broken below the minor support around the 8400 level and has gone as low as the 7800 area. Is this market a short? I don't know about you, but I do not care how weak a market looks, I will not short a major support area. I recently took a long swing trade on top of my longer term position at 8815 and got stopped out at the 8200 area. Why did I not hold it as part of my longer term inventory? The answer is I am looking to keep my risk under control. I still intend to get long again, especially around the current level, BUT confirmation must appear otherwise no trade. I do not trade these markets on margin, so I cannot short. And like I have written previously, if I was able to short, I would like do it on a day trade time frame, especially within a major support zone that price is fluctuating within at the moment. The 8093 level is where price is hesitating and I am not surprised since it is the most recent reversal zone boundary based on the 8271 low. On top of that, 7776 is another reversal zone boundary that is relevant to the 8342 low which price seems to be reacting to as well. Any bullish reversal patterns that unfold within this area, I will be looking to get into another swing trade long. In summary, these are slow and increasingly indecisive markets. Price is having a hard time putting together a solid rally off of this major support level , but that does not mean it is going dramatically lower as many believe. Momentum is generally bearish and a major change will not be valid until the longer term bearish trend line is compromised (way up at 9600). This is why managing inventory in conditions like this can be more effective than putting on swing trades. I have enough inventory and only looking to take on more risk (swing trades) if the signals appear. Managing inventory means averaging into a position that you are comfortable with if the market goes back to the lows. Remember you want to buy when a market looks it worst, and sell when it looks its best. If price pushes the 6K low, I will be looking for a failed low opportunity to buy as well. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
24
LTCUSD: Poised To Break Bearish Trend Line. New Trend Beginning?LTCUSD update: Higher low established at the 156 level serves as a sign of strength as this market is setting up to break the bearish trend line that has been in place since February. On top of that, price has been fluctuating within a major support zone for almost two weeks which implies further strength to come. Patience is key in this slow and uneventful environment. This market is full of false starts and no follow through which means there needs to be a bullish catalyst to spark the follow through required to begin the next broad movement higher. A close above the 165 level would confirm the break of the bearish trend line and could be the beginning of a price structure that can lead back to the low 200's at least. Keep in mind these markets are all following BTC. This market in particular, looks almost identical to the BTC chart. Both of these markets are fluctuating within major support areas which serve as an important factor when it comes to considering market context. In this market, there is the 161 to 139 major support zone (.618 area of recent bullish structure) and overlapping that is the 151 to 145 minor support (.618 area relevant to recent bullish swing). And just above that is the 153 extreme reversal zone boundary that is relevant to the 156 low. Even though the momentum is generally bearish, price is within an area where a bullish reversal and break out is highly likely. Although price is moving slowly, a bearish catalyst can always come out and scare these markets lower. As long as price stays above the lower bullish trend line (140 area), I will not be concerned with minor fluctuations lower. IF price breaks and closes below the 140 area, then that would open the possibility of a retest of the low 100's. Just something to keep in mind. In summary, when markets trade in tight narrow ranges and put the herd to sleep, that is the best time to accumulate inventory in my opinion. Position trading is a good strategy in this environment especially because it allows you to build without the wild gyrations. This is what you want to do BEFORE a bullish catalyst causes a major reaction and gets everyone's attention. Once that happens, that is when you should be looking to lock in profits and capitalize on all the traders and investors who don't know any better and react to the hype that follows such moves. Just like in BTC, there are a number of bullish trigger scenarios that can unfold from this point. Do you know which ones? And if a trigger goes off, do you have a plan of action? Are you position trading (building inventory)? Or swing trading? IF a long trigger goes off, I will include that information on the S.C. website only. Questions and comments welcome (better to PM if you have a pressing question. Since I must focus my attention on S.C.).
BITFINEX:LTCUSD
by MarcPMarkets
14
BTCUSD: Further Strength Limited Until Trend Line Break?BTCUSD update: Price peaks at 9177 high while the next retrace into the 8400 area is in progress. This is where I am anticipating the next higher low formation, which I will interpret as a sign of strength that can lead this market out of the persistent bearish momentum that been holding it back for some time. Keep in mind the higher low formation is not the only scenario that can appear and part of having a flexible mindset means considering the other scenarios that can also unfold. Having a plan of action for each scenario is what puts you ahead of the herd and allows you to capitalize on an opportunity or protect yourself from an adverse move. The higher low followed by a pin bar, or reversal combo at the 8412 support (.382 of recent bullish swing) is one scenario. Other scenarios include a retest of the 7776 area (a previous reversal zone boundary) followed by a reversal candle and the extreme low (failed low formation) at the 6941 level followed by a reversal candle. Each of these scenarios offers an opportunity to participate in a broader higher low formation. What needs to happen next if this market is going to continue higher is the bearish trend line that is now connected by the 9177 high needs to be broken. As long as price trades below it, bearish momentum is likely to continue. In summary, like I have written before, analysis and trading are two separate processes. Trading has to do more with making a decision: how long do you want to hold for, on what signal to buy, where to place the stop and target, and what is the target size? Your evaluation of the trend and the levels serve as a guide to help you answer these questions, and if you cannot answer them before you place a trade, you really should stay out until you have a better understanding. I am waiting for a particular candle formation and trigger in order to go long and capitalize on the higher low. IF the signal materializes, the trade details will be available on the other site. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
14
ETHUSD: Extreme Lows. Chance Of Reversal High?ETHUSD update: New lows made at 452 as this market gets punished by the possibilities of securities regulation by the SEC. There is only one level left where there is a chance of a bullish reversal, but until some significant bullish structure materializes, I would stay away from this market as far as initiating new positions both long or short. The SEC interference creates a ton of uncertainty, and markets do not like uncertainty at all which can lead to extreme fear. That is what we are seeing at the moment. The fact that price did not reverse within the 713 to 520 support zone is not a good sign, but does not mean this market is going to zero. 469 is the reversal zone boundary relevant to the 565 low. The current candle is touching that level as I write this. The fact that price is in this location makes it high risk in both directions. Buying right now is extremely aggressive because there are no signs of buyers, and shorting here is extremely risky because chances of reversal are high. Situations like this are the reason why I do not get too big too fast when it comes to building inventory for a broader market move. Only fractional sizing and the willingness to lose will prevent you from being shaken out. When I say the willingness to lose, it means you are sized to the point where if this market really falls apart, it will not wipe you out. That is the risk you take when position trading. As far as shorts go, IF you had the ability and courage to short this market, and managed to hold it, now would be a good time to consider taking profits or at least tightening protective stops. Again I do not short these markets because I do not trade them on margin, but if I was short, that is what I would be thinking at the moment. In summary, as long as momentum is bearish, I would avoid any new longs. If you are feeling aggressive, you can wait for some sign of reversal off of this particular area and initiate a small position, but do not expect stability or follow through until there is an appearance of a clear reversal structure (higher low) and/or break of the bearish trend line. The best thing you can do during a situation like this is plan ahead, and NOT react to what is happening now. Reacting is what leads to selling bottoms and buying tops. This situation is no different than buying at 1350. If the whole regulatory situation turns out to be less threatening than expected, this market is going to squeeze hard, and you do not want to be caught on the wrong side of that. Can this market go lower? Sure, anything can happen, but remember when a market looks its worst, often that is a better time to consider buying. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
11
BTCUSD: Bears Persist At Short Squeeze Levels?BTCUSD: Price pushes off of 7605, touches 8604 in a matter of hours, BUT it did not close strong. This price action is apparent across the board and for me means ones thing: bulls are not in control, yet. The next scenario that I am anticipating is a failed low formation which needs to unfold above 7401 if buyers are to return and initiate the next bullish leg. All eyes are on this market. ETH and LTC are pretty much following this lead. Buying activity appeared at a very attractive support area BUT like I wrote about in my previous report, strong closes are required in order to prove that there is follow through. When indecisive or weak closes appear instead, that means the bearish momentum is still intact. That also means lower prices are a much higher probability. The question is, how much lower? That is where the current location and price structure come into play. Price is now within the 8171 to 7239 minor support zone (.618 of recent bullish swing) which is also overlapping the broad 8174 to 4983 major support area (.618 area of entire bullish structure). I have been writing about this overlapping support area for weeks. Trading within a support area is an important piece of information to know, but not necessarily enough to buy into. Within the minor support zone, there are two reversal zone boundaries that are important to note. Reversal zones are areas that are proportionate to a low or high point where price is most likely to reverse. If a fake out is going to happen, that is most often where it happens. In this case. 7776 and 7401 which overlap the 8171 to 7239 support zone are the lower boundaries of two reversal zones relative to the 8342 and 7665 lows respectively. That is why even though price is still controlled by bearish momentum, it still has a chance to reverse. Right now in order to prove that bullish momentum is returning, price needs to reverse from where it is and break above 8200. Until that happens, this market is likely to continue lower, even beyond the reversal zones as long as momentum stays bearish. That is why it is more conservative to bet on the proof of the reversal (follow through) than a reversal attempt (pin bar alone). In summary, if you took the recent pin bar long (there was a great signal posted on other site), it hit its short term target within the same day, but if you held onto it looking for a broader move higher, the fact that the next close after the pin bar was not strong was a clear sign that you should either get out, or sit on what you have and see if the failed low scenario plays out (which is much more risky). It all depends on what your goal is: short term or long term. I am still managing a position trade long, and holding for the next broad move higher. IF the reversal zones do not hold up, it means I will have to take more pain which I am willing to do. I have the long term perspective and recognize that these low prices in general are a buying opportunity. As long as the original premise and underlying technology maintain their relevance, these persistent sell offs offer better prices to buy. Questions and comments welcome and see explanation of the recent trade on SC.
BITFINEX:BTCUSD
by MarcPMarkets
21
LTCUSD: 149 Low Hint Of Reversal? Bears Still In Control.LTCUSD update: Pin bars appear across the board at key support areas.In order for a solid reversal to follow through, the next couple of candles need to close strong. If they don't, all of these markets become more vulnerable to retest the newly established low. Pin bars at such a relevant location signify that the predetermined support areas of all the major coins are attracting buyers. When a long tail forms on a candle, it is expressing an important story. It is telling us that as ugly as the market looked at those lows, there were not enough new sell orders to keep momentum going. The long tail is evidence that there are more buyers around these lows which should not be a surprise. The key to using this valuable information is waiting for "follow through". Follow through is when price presents a change, (pin bar) and it is then followed by a dramatic push in the new direction. If there is no dramatic push which should happen relatively fast (next bar or two) then that means buyers are not serious yet. What is more likely to happen during a lack of follow through is price will often test the low once more, only to fake out again. The reversal process often begins with a candle formation, but this does not guarantee that the next move is simply higher. IF momentum does not pick up, then watch for a retest of the 151 minor reversal zone boundary low. Possibly even the 139 low, before significant buying activity returns. Even though price is now within the 186 to 138 major support zone (.618 of entire bullish structure), and the 161 to 139 minor support zone (.618 area of recent bullish swing), it still has plenty of room to gyrate before enough buying comes in to push prices dramatically higher. In summary, I often write about the importance of defining your time horizon and developing your plan around it. I have been managing a position trade in this market and that means I will keep adding to it carefully IF the market offers those type of opportunities. Adding carefully means waiting for distinct signals, and fractional sizing. In other words I am managing inventory. All of these markets are now in very attractive buying locations, but that is not enough to buy, especially if you are managing positions. Price is still expressing bearish momentum and if it cannot produce a series of strong closes, it will be much more likely to retest lows. This market and BTC are still far enough from their respective lows (106 in this case) to produce a very broad higher low formation and that is what I am waiting patiently for to add to my position again. If price wants to go lower, I will just hold what I have an wait it out. This is the risk you take when looking to capture broader moves. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
7
BTCUSD: New Lows? Welcome To The Fake Out Zone.BTCUSD update: Price has made a dramatic lower low at 7665 and is now right in the middle of the 8171 to 7239 minor support zone. Even though the short term momentum is now clearly bearish, it is very important to not lose sight of the location of this price action. In my previous BTC reports, I wrote about quiet markets being a sign of possible strength, and about how it is better to wait for the market to show its hand and being prepared for the possible outcomes both bullish and bearish. Well the market has spoken. First by taking out the 8822 inside bar low, then closing below the 8659 reversal zone boundary and now testing the broad support zones that we have not seen for a while. At first glance, it looks pretty negative but when you consider some of the factors driving this sell off like Goldman Sachs and Google recent news, it is not hard to see that this is nothing more than overreaction. Bigger picture fundamentals have not changed. For short term traders who are day trading or even swing trading, this is certainly a welcome move, if you have the ability and courage to short this market. As for position traders who are long, such as myself, I see no reason to sell. In fact in light of the recent spike in short interest, this market is in an ideal position for a dramatic fake out and squeeze. Short positions are piling on as price pushes into a major support zone? On top of that, the 7776 level is the reversal zone boundary relative to the 8342 swing low. Proportionally the current price location is the most likely place for a short squeeze to begin. In other words this is where the herd sells the bottom. Now keep in mind, a fake out or reversal is not in play until reversal candles form, close and get their highs taken out. Just because we are in a high probability location does not guarantee that it will happen. Waiting for price to prove itself is what prevents premature trading which leads to trouble, especially on the smaller time frames. Right now momentum is bearish and it must be expected to continue this way until a change materializes and proves itself. How you manage your decision making in this situation strongly depends on your outlook and time horizon. I am not day trading these markets, and secondly I am managing a long term position. I can't just throw out my long term outlook and change my entire plan because of a market over reaction. Like I wrote about in my previous report, I have accepted the risk inherent in this market which means I am not afraid to lose. This is what prevents me from getting shaken out during times like this while adhering to my bigger picture plan, especially since this market has not yet pushed below 6K. In summary, look at this move for what it is and do not get sucked into the massive hype that looks to capitalize on it. As long as price stays above 6K, it is more likely to be range bound on the broader time horizons which is what carries more weight. Sure, short term traders who had the courage to get short 1k points ago look like a hero, but if you are not one of those traders, then NOW is NOT the time to start shorting. I have been writing for weeks about the possibilities of the market choosing a short term bearish scenario only to set up for a fake out, particularly at these levels. And when I see the right patterns, I will add to my long, because this is where bigger picture risk is relatively low. If price continues lower which is also possible, I will just hold on to what I have and wait. As long as nothing changes in terms of the broad fundamentals of these markets, this is nothing more than a buying opportunity engineered by the big money. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
22
BTCUSD: Not That Weak? Quiet Market Offers Clues.BTCUSD update: 9616 level was compromised but bullish momentum did not take hold. As long as this market can stay above the 8342 low, it will still have a chance to break higher. In my previous BTC report, I highlighted the 9616 break out level which is the .382 minor resistance relative to the recent bearish swing. Price pushed it, and failed. Is this a bearish sign? The fact that price pushed through, even though not followed by bullish momentum is still a sign of strength. A break of this level does not guarantee follow through, it acts as more of a heads up. As long as price does not fall below the recent swing low of 8342, it is setting up for a bullish move in my opinion. Remember if this market was really weak, it would be making bearish progress quickly. This can still happen, especially if a more significant catalyst comes out and pulls the rug from under this price action. The fact that it is holding above the 8659 level indecisively is a sign of strength especially in the face of Goldman Sachs' attempt to talk it lower. IF the current candle closes in its present configuration (inside bar) then what happens next will provide a much better clue as to where this market is going. A break above 9482 will establish a higher low, which can lead to a retest of the 10422 resistance (.618 of recent bearish swing). IF bearish momentum increases, and price closes below 8342, then I would expect a retest of the 8171 to 7239 minor support. Aren't lower highs like the one at 9900 a sign of weakness? Yes, often lower highs are followed by lower lows, but when in range bound environments such as this, the chances of a fake out are much more likely compared to a decisive move lower. This is especially the case when price is sitting above a number of overlapping support levels. In summary, as I have mentioned before, when conditions are unclear, let the market show its hand. When questioning the market, valuable information is gathered not only from what the market is doing, but also from what it is NOT doing. Even though this market may look weak to the casual observer, it is not pushing lows which to me is a hidden sign of strength. Don't be mislead by uneventful conditions because more often than not, that is where opportunity exists. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
18
LTCUSD: Positioning For The Next Breakout To 230?LTCUSD: Following BTC's lead and in the face of minor bearish pressure, this market is showing signs of renewed strength that can lead to a revisit of the 230 area or higher. In this report I will explain why the short term bearish momentum is misleading in this context. Yesterday BTC presented a situation where it failed to push lows which signaled that these markets are not as weak that they appeared just days before. The momentum that was driving the minor sell off has been absorbed within the broader support zones across the major coins. That sell off did not even come close to making any significant new lows, and instead has established another higher low formation (relative to the most recent bottom which is the 106 area in this case). That means? The bigger picture still has a bullish bias. In fact, the 161 to 137 minor support zone (.618 area relative to recent bullish swing) has not even been compromised as it overlaps the 186 to 137 major support zone (.618 of broad bullish structure). So even though the short term momentum has been bearish, this market is still maintaining a bullish configuration which offers a very well defined buying opportunity. I have been managing a position trade in this market for some time and will continue to add to it and lock in profits as these opportunities present themselves. How you position yourself for the next bullish leg all depends on how much risk you are willing to take. Since I have a position trade, I am willing to take much bigger risk. This means if price breaks below the recent swing low (which is now the reference point to define risk for a swing trade long), I will not exit my position. Instead I will wait for the next series of reversal signs and look to buy more. For short term swing traders, there is a clear set up here with a specific entry point and stop. Can you see it? These specifics will appear on this report on my other site. The initial target for this trade is the 225 area. Keep in mind a break out at this point can take this market much further. In summary, the bigger picture is where the bigger opportunities are. Less experienced traders make the common mistake of thinking the short time frames will offer better information in the form of "faster" signals or changes. They do not realize that the weight of this information is not equal and that the smaller the time frame, the less reliable it is, especially when trying to capture broader market moves. The smaller picture is still showing bearish momentum, which can be very misleading when it is within the context of broader support zones. It is still possible for price to retest the 161 level or lower, but I will view this as a buying opportunity, especially on any signs of failure like the one we just saw off of the 161 low. Understanding the context of the big picture is what makes this perspective and preparation possible. Questions and comments welcome.
BITFINEX:LTCUSD
by MarcPMarkets
17