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Bearishmomentum

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
BTCUSD: Bearish Momentum Into Bullish Price Zone?BTCUSD update: New low made at 8342 which has taken price through the 9280 support and the 8659 reversal zone boundary as bearish momentum persists. Now that the market has made a decisive move, and compromised important levels, it is now reasonable to consider the possibilities of a range bound environment. As I wrote in previous reports, in order to go long, the market must prove itself. Although it showed some temporary signals of strength, like hesitant price action, potential reversal bars, etc, the proof to go long never materialized. What matters most is how a candle closes and I pointed this out specifically in my previous report. And on this time frame, which carries a lot of weight, the closes have been bearish. With that being said, the lower price goes, the more attractive it becomes to buy. Even though it went below the 8659 extreme support boundary, it is attempting to retrace. Also just below that is the 8174 to 4983 major support zone which is relative to the .618 of the entire bullish structure of this market. Even if price pushes into this zone, I will be looking to add to my long position. Keep in mind, this market has now established a lower low relative to the 9208 low, but has plenty of support and room to reverse which makes this market more susceptible to gyrating within a broader range. Especially now that price is overlapping the Wave i territory. The other level to monitor is the 9616 trend resistance (.382 of recent bearish swing) which will continue to adjust lower until the market establishes a low. Once price closes above this level, often that is a confirmation that the next bullish leg is in progress, otherwise bearish momentum is in play. In summary, do not over react and do not get sucked into the internet hype machine that looks to capitalize on out of comfort zone moves like this. Instead, put it into perspective and recognize what is ahead, and what needs to happen in order for an attractive buying opportunity to materialize. Buying fundamentally strong markets during times of weakness is a best practice, but you do not just buy because the market is pushing a low. You wait for a reversal at a high probability level. Price is hovering at such a level, and has an even more attractive area just below. Let the market prove itself, or stay out of its way. I do not short these markets, but if I could, I certainly would NOT be looking to get short now, especially near the reversal zone boundary. I am still holding my position trade long, and waiting patiently to add as more attractive prices become available. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
37
BTCUSD: Sell Off Slows At Key Inflection Point?BTCUSD update: The 9208 support level is still in play as price action unfolds as a spinning top formation (at the moment). It is too early to call this a bullish reversal, but price is in a high probability area for such a scenario. If the market produces a spinning top like the one visible at the moment, it will then complete an inside bar formation. Candlestick patterns alone can appear anywhere and often do not offer any special information about the balance of power going on inside the order flow that shapes the candle by the time it closes. It is the location that makes the formation more actionable and in this case we are at such a location. As I wrote about in my previous report, the 9208 level is the previous swing low, it is slightly below the 9604 level which was a minor .382 support. As long as price stays above this general area, it is indicating strength. By staying above 9208, the market is maintaining a broader higher low formation and is consolidating on a larger degree. This can even be considered a larger Wave 2 formation if it does not fall apart. The 10288 level is the minor .382 of the recent bearish swing and IF price can close above it, that would be a confirmation that the next bullish swing is more likely in progress. Keep in mind, what I just wrote is one scenario out of many. Another scenario is price can continue to sell further into the reversal zone which is contained by the 8659 support boundary. This is often where traders get faked into selling longs or worse, sucked into a short position. Can it break lower and keep going, sure, but I believe that to be a less likely scenario because of the overall bullish bias in this market. In summary, managing a position or timing a swing trade using a chart is about recognizing the meaning of a chart or candlestick pattern in relation to the context of the environment it is appearing within. Price at the moment is still in an area where there is a higher probability that a bullish reversal unfolds. Knowing exactly what that looks like, or know exactly when to take action is a function of experience. Just because I describe a scenario does not mean it will happen, it describes what I want the market to show me if I am to do anything further with the position that I have. I define my own rules that determine how I make decisions, and then I let the market prove itself, or not. By doing this, I am letting the market lead, I am not forcing my own ideas upon it. Opportunities often materialize during the less exciting market environments where the herd gets bored and loses interest. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
24
BTCUSD: Watching For Buyers At 9280 Support?BTCUSD: Bearish momentum is in play now that the previous bullish trend line and 10754 support have been broken with conviction. This bearish scenario is still limited by the structure that this market is within which offers two specific levels to watch for a reversal. This kind of move scares people which is good for others who want to buy at better prices. In my previous report I wrote about possible strength hidden near the double top. I did not write that this market was strong.In fact I wrote about letting the market show its hand, and that this bearish scenario was possible IF the market broke below 10754. Letting the market prove itself costs money, because it means you have to give it room to breath. If you are the type of trader that can't afford to let the market breath, or playing too close to the vest, you are going to have a much tougher time participating in the favorable market moves as well. Now that we have a scared crowd, the question is where are they going to get shaken out, in other words, where are the extremely prices relative to the current structure in place? The double top that is now confirmed is a bearish formation, and it implies further weakness UNTIL another signal or formation negates it. The first step to anticipating this type of price action is to first locate where it is most likely to happen. 9280 is the swing low that has potential to attract buyers. As I write this, price is moving toward this level without much hesitation, but remember this large bearish candle still has plenty of time to close. It is the close that matters more than where price is intra candle. The second level to watch is the 8659 extreme support boundary. Anywhere between the 9280 low and this extreme level is where new selling enters the market (break out traders) and where scared money often gets shaken out. This is the high probability reversal area, where I want to be prepared for a reversal signal to add to my long position. In summary, even though the immediate momentum is bearish, that does not mean the long term outlook has changed. The broad double top is in play, until it gets cancelled out. Minor sell offs like the one occurring at the moment are normal and healthy, no matter what the hype-sters are saying. As long as the broader outlook and premise are still intact, bearish activtiy such as this is more likely to lead to a lower risk buying opportunity, which will not be so obvious on a chart. Can the market collapse altogether? Sure, anything can happen, but I am willing to bet that prices will be higher in the long run. Part of positioning yourself for a broader move is to know where the prices are with the greatest likelihood of reversal, from there is it a matter of waiting for the market to prove itself, and once it can, you have to be able to take the risk in an environment of imperfect information. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
28
BTCUSD: Impulse Still Intact? Watch For Break Of 10256.BTCUSD update: Price action is still being lead by bearish momentum, but the range of the most recent candles are tightening. Even though this may not appear as anything unusual, because of where it is occurring, we can get an idea of what is likely to happen next. In terms of the wave count, and impulse structure, the Wave 1 high was 9074, and so far the current Wave 4 low is 9280 which means no over lap. As long as Wave 4 does not go into the area of Wave 1, the transition to Wave 5 is still very reasonable, especially since price is not much lower than the 9604 support level (.382 of recent bullish structure). Buying into this type of price action in anticipation of the bullish reversal is aggressive, especially since there are no confirmations of momentum changing, only a tightening range which just acts as a heads up. The more conservative play is to wait for a decisive break and close above 10256 minor resistance level (.382 of current bearish swing). This level adjusts as price action pushes lows and serves as a gauge to determine when momentum is much more favorable for longs. IF the current bearish momentum persists, and price pushes into the Wave 1 area, the impulse wave will be negated and I will view this market as being within a broader consolidation, which is not to be mistaken for a bearish condition. As long as price does not push new lows (below 6K) I will be looking for reversal patterns at the predetermined support levels to add to my long. The consolidation premise helps me to adjust my near term profit targets lower to the 11Ks which keeps my expectations within the boundaries of the market structure instead of optimistic targets based on feelings. In the broader consolidation scenario, I want to see how price behaves within the 8171 to 7239 support zone (.618 of recent bullish structure). This is a predetermined support that over laps the 8171 to 4983 major support zone that is the .618 area relative to the entire bullish structure of this market. In range bound markets, broader supports AND resistances tend to hold and I will look to capitalize on that if it unfolds this way. This price action is NOT enough to change my over all outlook to bearish. In summary, price is still in a good position to form a higher low and rally to the 13Ks. Whether you are position trading or swing trading, you must always be aware of where price is on the road map and what to anticipate if the condition changes. Less experienced traders get stuck on a "one scenario" idea, and get bent out of shape when the market does not comply. This focus on being "right" is irrelevant. Timing any financial market requires that we make decisions and take risks in the face of limited information. The only way to thrive in this type of environment is by learning to accept new information and adjust to it which forces us to accept that the market is always "right". The best we can do is measure, evaluate, compare and then decide if the market is in line with our criteria, enough to justify taking a risk, or not. This is why it is so important to follow your OWN criteria and use outside analysis to supplement your own, not to replace it. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
24
BTCUSD: Lower Prices Likely? Unless Reversal Pattern Appears.BTCUSD update: 10429 minor resistance has held and price is now retesting the 9600 support. Unless this market can show a reversal formation on this time frame, price is likely to push lower. Like I highlighted in my previous report, the lone bullish candle (that at the time of writing was a spinning top but closed stronger), was never able to close above the 10429 resistance (.382 of current bearish swing). Closing above that level is the signal that I require to confirm that bullish momentum is back. The 9604 level (.382 of current bullish swing) and convenient location for a Wave 4 bottom is being tested again. One bullish reversal formation that I would like to see is the failed low in this area. That is when price goes slightly lower than the previous close and then closes strong. In this case, IF this scenario were to unfold, the next candle should be a pin bar, or engulfing candle. If this occurs I would consider adding to my position. What if you took the aggressive long swing trade that I described in my previous report? It is possible you have been stopped out if you used the 9600 level as your reference point. Remember swing trades and position trades are not the same. They each operate on different time horizons and carry different risks. People that trade smaller time horizons often take on larger positions faster and is why a stop must be used in order to control the increased risk. Position trades are accumulated over time and are more in line with principles of longer term investing. This means numerous small positions add up to an aggregate position with an average price. My risk is controlled through strategic sizing rather than a stop which allows the bigger picture to play out and not get kicked out of a position too early. The risk in this type of trade can be bigger, especially if the overall outlook or premise changes. I understand and accept these risks. What about the Wave 4 bottom? The current support area is a convenient place for a Wave 4 to Wave 5 transition to take place, but does not mean it will. Typically, wave 4's are tricky and can include numerous false starts. Keep in mind as long as the low of Wave 4 does not over lap with the high of Wave 1, the bullish impulse wave is still intact (which means there is plenty of room for a minor double bottom or failed low formation). IF price action over laps with the highs of Wave 1, then the impulse would be negated and the market would be signalling more of a range bound condition rather than a trending one. In summary, as long as there is no reversal pattern, it is reasonable to expect price to push into the low 9Ks or even retest the 8174 to 7230 minor support zone (.618 of recent bullish swing). Before I add to my position trade, I would like to see a solid form of bullish confirmation such as a double bottom or higher low off of the current level. Unless I see that, I will just sit on what I have and wait. As a trader or investor, you must always be prepared for anything because nothing is certain in any financial market. If this market falls apart, I can handle it because I am sized appropriately to my risk tolerance. If you can't handle it, that means you are in too big and lack a well defined plan. I cannot emphasize enough that if you cannot handle losses, then you are in the wrong game. The ability to embrace risk is what facilitates rational position management and trade criteria no matter what time horizon you are participating in. The inability to lose is what facilitates fear, and scared money never wins. When it comes to timing financial markets there are countless pieces of information to consider and compare, and it can be confusing to say the least. To help clear this confusion, begin with broader time horizons and a focus on risk. Participation may be much less eventful, but the outcome will be more in line with best practices which often lead to more positive outcomes. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
11
ETHUSD: Weaker Than The Rest? Watch 824 Support.ETHUSD update: Price action has been under performing the BTC market in terms of the recent bullish move. This market did not break its overall bearish trend line, and has formed a minor lower high at the 955 level. This means short term bearish momentum is in effect which decreases the likelihood of the 824 support holding. Lower highs often lead to lower lows. As BTC and LTC showed some considerable bullish structures in their respective movements, this market has not. The 1004 to 1114 resistance level (.618 of recent bearish structure) has never been compromised, and the bearish trend line that was established during the fourth week of Jan is also still intact. On top of that, a new minor lower high at 955 lead to the bullish trend line break while price is now testing the 824 level which is the .382 support of the recent bullish swing. These observations are all signs of short term weakness and this bearish momentum can persist until a reversal structure unfolds. At the moment, price is within the 872 to 739 support zone (.618 area of recent bullish structure) which is a convenient area for such a reversal, but until it appears, I would hold off on any new long positions. A break of the 824 level, and this market is more likely to retest the 739 support zone boundary. Again the key to using these levels is what to reasonably anticipate. The type of momentum that is taking this market lower needs to be counter acted with structure like a mini double bottom or higher low. A simple candle reversal will not be enough because there are too many bearish signals in play. Do not be confused by the different magnitudes. It is possible to have short term bearish momentum within a longer term bullish structure. If you are looking to build a long position in this market, the objective is to wait until price action realigns with the bigger picture, and at the moment it is in a convenient location to do that. My concern with the bigger picture is the 973 lower high which can lead to a larger magnitude lower low. I am not saying it will happen, but because of this structure, there is an increased chance that the 670 level or lower can be retested. In summary, interpreting the price action is not the same as reacting to it. I am using these bearish observations to better determine how to position myself for a position trade long, especially since I do not short these markets. Compared to the other major coins, this market is acting weaker and for that reason, I will require much more validation before taking a position. The predetermined levels and areas offer price locations to anticipate bullish reversals, but there is no guarantee that they will appear. By having a flexible mind set, I can acknowledge the immediate market intent while waiting for it to unfold in the way that conforms to my position trade entry criteria. If it never meets my criteria, I simply sit it out. I always talk about buying weakness, which you can do aggressively or conservatively and I make this decision based on market conditions. If price is aggressively selling into a reversal zone, I will be more aggressive and buy right into it with a small position and wait for stability before building the rest of the position. If price is selling in an orderly fashion like it is at the moment, I would rather be much more conservative and wait for the momentum to show clear signs of change. There is no "right" way to do this, it all depends on your general outlook, your plan, your risk tolerance and the time horizon of the position you are looking to put on. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
9
ETHUSD: Beginning Of Consolidation Or Next Bear Move?ETHUSD update: The shallow higher low structure across the coins is lacking follow through that used to be much more common in these markets months earlier. Is this the beginning of the next bearish leg? Or is the higher low consolidating instead? It is important to understand that after the type of sell off that occurred recently, markets often don't just reverse back up in an instant. Many of the participants that were buying fearlessly months earlier are now not so fearless. New participants who are entering the market can also see how large and fast a correction can be and are cautious. This sentiment is often reflected in the news and hype outlets that these participants often react to. What typically follows a period of highs or a dramatic correction is consolidation. The market needs to prove that it is stable which in this case would mean failure to make new lows, and secondly, there needs to be a string of bullish catalysts that get the hype machine going again so that the herd reacts by buying. In this market, the key signs of strength to watch for are: A retest of the 778 higher low. This can unfold in the form of a failed low, meaning price touches the 739 lower boundary of the current support zone and holds by printing a common reversal pattern like a bullish pin bar. A break of the 921 resistance level which is related to the old support/new resistance concept and also a .382 resistance of the recent bearish swing. The break and close above this level will confirm the higher likelihood of a bullish continuation structure. An extending triangle formation over the next few days which demonstrates a lack of selling in my opinion especially if this occurs within the 872 to 739 support zone (.618 area relevant to recent bullish structure). Can't this formation also be considered a lower high which is a sign of weakness? It can be, but typically weakness does not waste time. Often selling unfolds much faster than buying in financial markets in general. (It will take a week to go up 100 points and then give it back in 2 days). So as long as price is holding rather than pushing lows, it is less likely to be a lower high, especially since this consolidation is occurring within a major support area. In summary, which direction the market chooses is up to the market. The best we can do is interpret the price action and measure where it is more likely to go, and adjust as new information becomes available. Charts and chart patterns do not move markets, they only serve as a reflection of order flow. Since history repeats itself and markets trend, it is possible to gain some insight into the immediate intentions of the herd and that is what TA helps us do. Good TA is not trading, it is a visual guide that can help us make trading decisions that are more in line with market intentions. Trading is about putting capital to work in an a way that will generate profit over some period of time. Your time horizon determines what information carries more weight when using TA. I have been bullish in these markets because long term fundamentals have not changed. It is a just a matter of waiting for the technical aspect of the market to realign on the time horizon I am trading and that is the position trade horizon. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
10
BTCUSD: Poised For Retrace. Back To 7Ks? Or New Low?BTCUSD update: 8427 resistance decisively broken, so where is the steep rally? A retest of supports is necessary to "prove" that the bears are no longer in control. At the moment, a shooting star candle formation is unfolding just after pushing the 8427 level that I have been writing about. And if this candle closes in this configuration, it is a bearish sign. Keep in mind this period has at least 10 more hours before the candle is official. The close will more than likely determine if this market is going to retest a lower level, or continue the initial rally leg that has been building since the Senate hearings on Tuesday. One of the basic tenets of technical analysis is that markets trend. Trends occur on every time frame and carry different weights. A 1 minute trend is much less significant than a 4 Hour trend, etc. Over the previous month, the intermediate trend has been bearish, while the bigger picture is still bullish. This can be confusing and is why it is so important to know what time frame you are looking to operate on before taking any trade. In order for this intermediate bearish trend to break, the market needs to fail to make a new low and instead, take out a previous peak. This is a process, not a single event. 8171 to 4983 is a major support area (.618 of entire bullish structure) but does not guarantee a reversal will materialize. One scenario that will signal the return of strength before it is obvious is what I call the broader higher low formation. "Broader" means it must happen on a large time frame like a daily or 12 hour. A convenient support area for this higher low is the 7149 to 6677 minor support zone (.618 are of current bullish swing). If price retraces from the current pin bar, I will be watching this minor support zone for bullish reversal patterns. Since the 8427 resistance was compromised, I am anticipating that there is a greater chance the minor support holds. A bullish reversal off of this zone should then lead to a higher high if the market is changing direction. Keep in mind, a broader higher low does not necessarily lead to a new bullish trend. This market may become more range bound before the bigger picture reasserts itself. The focus is to observe the signs and anticipate the most immediate move relative to your time frame and adjust accordingly, not to "predict" the broader moves of the market and feel good about being "right". In summary, this market is not out of the clear yet. IF the minor support in the high 6Ks is broken, this market may retest lows. IF the support holds, then anticipate the next resistance to be compromised and adjust accordingly. I am playing the bigger picture and in a situation like this, my choices are to add to my position, decrease my position, or do nothing. Since I am sticking to my bigger picture plan, I will not be shaken by a new low, I will just hold on to what I have and wait until the market shows a more supportive environment. This is not that difficult to do because my position is not margin based. I compare it to holding physical gold as opposed to paper gold (futures). IF the higher low forms, I will be looking to add once more, and from there only add on resistance break outs. My decisions are a function of the time frame that I am operating on, and is key to avoiding confusion and sticking with the plan. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
28