Get started

Bullishmomentum

BTCUSD Perspective And Levels: Runaway Train?BTCUSD update: New all time highs as I write this, right into the 8250 target area. The next level to watch for is 8500 which is the top boundary of the reversal zone. Yesterday I updated my previous BTC report, pointing out that price was in the process of breaking out of the bull flag formation and on its way to 8k. This price action is very clear and very strong. If you are long from lower prices, this target area is a good place to lock in some profit. Keep in mind when I write that, I DO NOT mean sell your whole position. Taking some profit at highs is a good habit because it reduces risk and you are selling while you can, and NOT when you have to. Give some of it to the buyers while they are buying. Remember, the higher it goes, the risk of retrace increases that is why you do not want to buy highs, you want to sell them. This does NOT mean this market is a short either. After the .618 resistance area was cleared without any bearish structure in sight, I have been warning about shorts. There is no structure on the larger time frames or breaks of any minor support levels. Even though the risk of retrace is high that is not enough to justify a short. There are market conditions where the risk is unattractive for both longs and shorts and this market is in that situation now. If you want to participate in this action, the only way to keep risk within reason is to day trade. I write this over and over. The bearish structure will appear on a 15 minute chart, and a reasonable stop is 30 to 50 points on such a short time horizon. So is your profit target. If you risk 30 points and you are up 50 points in a matter of an hour, you take the profit, not try to hold it for a home run. That is why I also repeat, IF you do not have a solid day trading plan and you do not know how to define stops and targets on small time frames, then do not trade this market at all. It is too fast and requires an agile mindset. What is the reversal zone? I have been referring to this as the "fakeout zone" in previous reports. It is an extension that is measured from a range high or low. In this case, a measurement from the 5400 low puts the reversal zone boundary at 8500. On top of that, price has reached the 8250 target area which is a 1.618 extension projected from the 6300 low. Add to that, the bullish structure that has lead to this high is a clear impulse wave with 5 distinct legs. Together all this means price is in a convenient area to present a bearish reversal pattern or structure. This is why I say take profits, but do not short until the larger time frame structure is present (a double top, lower high, pin bar). Another thing to consider, shorting the high in an attempt to get in at the top is the same as buying a market when it is making new lows in an attempt to catch the bottom. It is a losing proposition because the one time that you are right does not cover the losses for the other 5 times you were wrong. If this market is going to retrace, it will begin with the initial wave, followed by the failed high or lower high. The retest and failure is the best time to short, so as long as the market keeps pushing highs, shorts should not be taken on larger time frames. In summary, this market is making all time highs which is not that surprising considering the recent bullish structure. While the world will be celebrating this event, keep in mind price is within the reversal zone (below 8500) and is a very risky buy or sell at the moment. Since I do not short these markets, my only choice is to buy, and the level I am most interested is the 7180 area (.382 of bullish structure). A bullish reversal on a smaller time frame is likely to offer attractive reward/risk for a swing trade at that level while the market likely aims to retest the high once more. Overall, do not worry about missing out on longs or shorts, the opportunities will materialize, just wait, recognize and repeat. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
82
ETHUSD Perspective And Levels: Breakout Or Fakeout? The Sequel.ETHUSD update: After breaking the 355 resistance zone high, price touches the 371 target before running out of steam. Is this market poised to break through the 400 level? The signs are not there. YET. In my previous report, I wrote about the minor range breakout, the minor resistance within the larger resistance zone, and a potential retrace back to the 315 area.(It went to 320 instead). I also explained the 371 extension which price has now touched. Why is this market not going to the moon? Here's why: Price has finally broken beyond resistance levels that have been in place for weeks now. That is certainly a bullish sign, but it has stopped within the fakeout zone which is capped by the 374 level (this zone is an extension measured from the 275 low). And touched the 271 extension (1.618 projected from the 286 low) and just stopped, forming an inside bar at the moment on this time frame. If the momentum was still present, it would keep going or at least close out on the highs of the candles. Based on this price action, I am anticipating a minor retrace back to the 335 area (.382 of current bullish swing). That is also an old resistance which should now act as a new support (inversion). IF this market can produce a higher low in this area, the next leg up could be the 395 historical peak (it will have to break through the 371 high and close strong). IF this market can break beyond 395, then the 406 extension is the next target (1.618 measured from the 321 low). Based on the way price is moving now, it is reasonable for this target to be reached within a week if structure remains bullish (remember things change fast). The current candle has less than 8 hours to close. If it closes within the range of the previous candle and then breaks the high (currently 364), then bullish momentum is likely to continue. If instead it breaks the low (currently 350), then it is more likely to retest the 335 support. I am interested in a swing trade long IF the market can find support and a bullish reversal on a smaller time frame at that level. In summary, this market is now showing significant signs of buying after breaking above the long time 355 resistance level. If price can maintain the bullish structure by presenting a higher low somewhere above 335, it is then more likely to retest the 392 level and beyond which makes it worthwhile for a swing trade strategy. I will be watching the 335 to 340 area for a bullish reversal either on a smaller time frame, or a candle on the larger time frames and evaluate risk from there. I will also be watching for a reestablishment of a rangebound market until a significant catalyst can come along and really drive price. In case of a range I will be looking for trades in the lower support area of 300, and 275 if this market decides to retest those levels (which does not look likely at the moment, but it is a good idea to be prepared). It is more important to be flexible and manage risk than anything else in this game. I report what the market is saying, not what I think or what anyone else says or writes. Forecasting is about analyzing clues and projecting scenarios that MAY or MAY NOT happen, and as the market unfolds you adjust based on the NEW information as it becomes available. That is what short term speculation is all about. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
41
BTCUSD Perspective And Levels: Signs Of Strength For Now.BTCUSD update: Price is pulling back in a very shallow consolidation which is now presenting a bull flag formation. This price action is not characteristic of a weak market or a bearish C Wave. If anything price is poised to retest 8k and possibly higher. Weak markets do not consolidate near highs, and do not unfold in bullish formations on larger time frames. This market is not weak, yet. I have been writing about the tricky B Wave, which typically unfolds in 3 legs. The current structure appears to be in a minor Wave 4 and setting up for a new high attempt. That is not characteristic of a B Wave which means the market has negated that scenario. It hasn't even compromised the 7350 minor trend support (.382 of recent bullish swing) and is no where near the 7k support that I was using as a reference to confirm a C Wave was in play. Weak markets reject levels and sell fast, and often originate from a failed high or double top and this market is not showing any of those structures at the moment. The fact that the 7350 and 7k supports are still intact is another bullish sign. Until those levels break, this market is a high risk, low probability short. (In other words a pure gamble). Based on this time frame, a break of 7800 will also signal buying and possibly the start of the next leg that can go as high as the mid 8ks. Projecting an extension from the 6300 low shows a 1.618 at 8381 which is just under the 8468 level which is the upper boundary of the fakeout zone that I wrote about in my previous report. (It is a projection measured from the 5400 low). This type of price action is ideal for day trading in my opinion because you don't have to take the large time frame risk, while capitalizing on generous moves. The reason why a swing trade is less attractive is because it is not worth the risk at these levels. I have to risk around 400+ points to possibly make 300 or slightly more? Day trading stops are more like 50 to 100 points while you can capture 150+. Makes much more sense. In summary, this market still continues to show signs of strength. A shallow retrace, bull flag, untested minor supports, all point to a better chance of higher prices. How much higher? Based on proportions mid 8500s is reasonable at this point. There are many different forces at play in a market like this and little to no regulation. There are pros and cons to every situation. The strength may not make sense in terms of logic, or this market may be propped up by the BTC community through their technical advantages, or maybe it is full of fake Tether as some have suggested. The reasons don't matter if you are a short term speculator. Price action is showing signs of strength, so embrace it or avoid it, no one is forcing you to participate. For my swing trade plan, the risk is unjustified so I will stay flat. If this market is going to sell off hard, it needs a surprise (like an exchange going out of business) because at the moment, there is very little price action to support a bearish argument. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
43
BTCUSD Perspective And Levels: Hope Short Refers To Your Height.BTCUSD update: Price has pushed to 8020 without any bearish hesitation on the larger time frames in the 6950 to 7350 resistance zone. What happened to the C Wave that I have been writing about? If you look at my previous BTC report, I specifically explained that B Waves are TRICKY. I also explained that price had to break back below the 6500 area in order to confirm that a C wave was in play, otherwise the market is likely going higher. The current price structure may still be a B Wave, but the factors that support that argument are much fewer in number. The bearish factors that can lead to a C Wave are the potential double top (8040 is not much higher than 7899). And also the failed breakout zone which price can actually go as high as 8500 and sell off hard from there. Why 8500? The range between 7899 and 8500 is an extension zone that is proportionate relative to the 5400 low. When failed breakouts occur, they are more likely to occur within this zone. If price pushes beyond 8500, then that is a sign of strength and signals higher prices to come. There are NO bearish reversal structures or support breaks to justify shorts at the MOMENT. The 7k level is the trend support (.382 of bullish structure from 5400 low.) There are NO bearish reversal candles or larger time frame triggers that signal selling. At the moment there is a mini consolidation that is unfolding which usually leads to higher prices since these are trend continuation patterns. As far as the C Wave, price must break below 7k in order to prove that a selling wave is in progress. Shorting before this happens (IF it happens) especially without any larger time frame structure is a low probability trade. An example of structure is the recent double top formation that occurred at the 7899 high (a week and a half ago). I do not consider this new high part of a triple top until there is proof of a reversal. Again there is nothing. Also something to keep in mind, markets that are weak test resistance and often reject it quickly. If the current situation was a triple top, price should be rejecting the 7900 level and instead it is consolidating on it. That is not a sign of coming weakness. I keep emphasizing that being flexible is key in fast markets like this. On the short time horizon, there is no time for opinions. Is it possible that the BTC minors and developer community are using their pull to manipulate this market? Sure, so even more reason to be flexible and recognize what the market is doing NOW and if there are any signs that it wants to reverse. Steve Spencer (The S of SMB Capital), my former boss and world class trader still says, "Be in the present, be flexible". This is an absolute must for short term speculation. In summary, this market is consolidating at a potential peak which can be taken as a sign of strength. Is it risky to get long if it breaks higher? Absolutely, especially on larger time horizon strategies like swing trading. "This market is always risky" you say, but it is riskier at the moment because it is flirting with all time highs, not a higher low which is where the reward/risk is favorable for swing trades. Wave counts work until they don't, just like everything else in TA. Our job as price action traders is to uncover the clues available now and adjust to changes as the market evolves. Listening to the market is an essential skill for short term trading, while imposing your own ideas upon it will give you a completely random result, but our own natural bias enjoys thinking we were "right". Good trades come from good plans, and flexible mindsets. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
31
ETHUSD Perspective And Levels: Strength Returning?ETHUSD update: Price structure is showing signs of continued strength with a higher low and breakout of a smaller range between the 275 and 310 area. It still has to get through a wide resistance zone that has been holding this market back for over a month. Based on the new bullish structure, 372 is a realistic short term target. I have not been writing about this market because it has been uneventful in terms of signals or opportunities defined by MY swing trade plan. The most recent price action now offers structure that suggests this market is setting up for a broader break out. In my previous report, I described the range between 275 and 310, but that was just a minor range within a very large weekly range. The large overhead resistance zone that has been established for over a month is the 320 to 355 area (.618 of bearish structure off the 395 high). Within that zone there is a minor resistance between the 323 and 338 levels (.618 of the recent bearish swing off of the 335 high) which price is gyrating within at the moment. Even though these resistance zones are in play, what makes this price action compelling is that fact that price is now coming from a base of strength. There is a higher low established at 286 level and a higher high at 339 which is the resistance zone high. (These zones have been on my charts weeks in advance, and they are still in play, special note for those who do not believe in the merit of TA). This higher low structure also allows for new support levels to be anticipated which are the 315 level (.382 of structure), 312 (old resistance/new support) and the 300 to 288 area which is relative to the .618 of the bullish structure. When you project price extensions from the higher low, the 372 target is the 1.618 extension which makes it the potential short term target if this market has enough momentum to break out beyond the 355 level. What is my plan? Previously I wrote about waiting for a retest of the 270 range support, but in light of the new bullish structure, I am now looking for a retest of the 315 level for a swing trade long. The 315 level offers slightly overlapping support and better reward/risk according to MY plan. So I will wait to see IF the market retests that level and look for some kind of bullish reversal, whether it is a smaller time frame chart pattern or larger time frame candle stick. In summary, this market has finally developed some price structure worth writing about. The higher low and minor range breakout are bullish signs that can be the beginning of a much larger breakout that can take price beyond the 355 level. Based on proportions, the first target at the 372 level would be a good place to lock in some profit and reduce risk if you are currently long. Remember anything is possible in these markets and if this price decides to retest the 280s again, I would be interested in buying there also. On the weekly chart, this market IS still range bound so make sure to keep expectations within that context. I do believe in the long term (months) the big picture consolidation will break out and this market will see much higher prices, but it is not in a hurry at the moment, and you shouldn't be either. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
11
BTCUSD Perspective And Levels: B Wave And Resistance Zone.BTCUSD update: Price is retesting the 6950 to 7350 resistance zone (.618 of recent bearish swing) which is the 3rd leg of Wave B. This is where it gets tricky. Will it retrace lower or keep going? In my previous report I wrote that I was anticipating this upswing because this is a typical zig zag formation that is characteristic of Wave B counter corrections. I also wrote that it was an attractive day trading opportunity and I hope traders managed to get in on the move. Why is this tricky now? Isn't it going to 8k? I always say anything is possible, BUT price is right in the middle of the .618 resistance zone that is a typical area for corrective waves like this to complete. Price is more likely to turn lower from here and begin the C Wave which can take this make back to the high 4ks. For those looking for shorts, this is the area to begin evaluating for weakness. There is none at the moment. On top of that, the 6950 area is an old support (previous Wave iv) which is likely to act as a new resistance. Another reason to lock in profit and reduce risk if you got long in the 6500 area yesterday. What if price just keeps going up? It is less likely, but it can happen. Another scenario is Wave C may not unfold and the market may only produce a shallow retrace before attempting to retest the 8k high. The bearish confirmation that I am looking for to signal that the C Wave is in play is a break of the 6550 level which is now the .382 of the recent bullish swing. A break and decisive close below that level will mean price is probably on its way to retest the lower levels described earlier. If price instead produces a higher low above the 6550 area, then it is signaling further strength. This has happened a couple of times in this market recently so you must be on the look out and you must not carry any opinions. Recognizing and adjusting are the key skills, especially in a fast market, NOT the intellectual pursuit of fundamentals. This mindset is specific to these type of markets and short time frame trading NOT long term investing. So what's my plan now? I am not buying these highs, especially in the middle of a resistance zone. I am not buying any pullback UNLESS price action proves itself by showing solid bullish formations above the 6550 level. I will evaluate that IF the market offers the opportunity. Otherwise I am flat. In summary, moving 500+ points a day is great and full of opportunity on smaller time frames. I will tell you from experience, don't get use to this. Once the CME gets involved and regulators start regulating, I would not expect this market to move as generously as this. I saw it happen in the stock market, futures, and forex markets. There will always be opportunity, but there are times when it is extremely generous and now is one of those times. I can't repeat this enough: be quick, and do not get caught with an opinion. If price action is saying "turn" just turn, don't fight it. If it is saying "higher" don't fight that either. It is all about how to "listen" to what the market is saying. That is the skill we are always refining as short term traders and active investors. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
84
BTCUSD Perspective And Levels: The Fast And The Flexible.BTCUSD update: This market moves fast. The anticipated retrace is in play as price has taken out the 6469 level signaling bullish momentum. 6950 to 7350 is the resistance zone to watch for the next bearish reversal. As written about in my previous report, the 6950 to 7350 area is the .618 of the recent bearish swing. Often, when a Wave B unfolds, it happens in 3 legs (typical corrective wave). This means from here, price can retrace or consolidate slightly before making another decisive move higher into that resistance zone. If the formation resembles a zig zag going into the 6950 area, I would be anticipating a bearish reversal and the beginning of Wave C. Waves C's are the emotional wave, they are often fast and ugly. IF the market decides to follow the scenario that I am anticipating here, then it may retest the high 4ks from this point. As the Wave B is unfolding, it is possible for price to pullback to the 5870 to 5632 which is the minor .618 of the current move from the 5400 low. IF price retests this area and reverses, it can offer a chance to get in for the completion of Wave B into the 6950 area. That is around a 1k point move that can happen fast (a day or two). Keep in mind the 6950 level is only a possibility and there is no guarantee that price WILL retest the area. It may fail sooner. So here is what all this means: A pullback to the 5870 area may offer a buying opportunity to capitalize on an attempt to push toward the 6950 zone. If price reverses above the 5870 area, it would be a higher low formation which will strengthen the argument even more. For day trading this trade is simple because you can measure risk from smaller time frames and exit for 2:1 or 3:1 without much drama IF you are paying close attention. This can even qualify as a one or two day swing trade, BUT again you must be nimble because any sign of failure and the position must be exited. I do not anticipate this market going back up to 8k in this next bullish retrace. This market is FAST and there are A LOT of IF's. Flexibility is more important than anything else. If you cannot be flexible and recognize changes as they are unfolding, then avoid this market altogether until this corrective formation plays out. Since I am flexible, and this market is so generous with momentum, I am open to take a swing trade long IF price retraces back to the 5870 area and forms a reversal structure within that zone. If I can justify 2:1 or 3:1 based on that structure at that time, I will take the trade, but like I just wrote, the target will either be 6950 or below if price shows signs of turning earlier. I am doing my best to describe trading scenarios, but I cannot force you to understand the concepts of flexibility and change. If the market offers the scenario I just described I will do my best to show the actions that I take by updating this report. At the moment there is a clear relationship with BCH. If price goes lower in this market, BCH goes up and vice versa. From what I understand, BCH solves the scaling problems that BTC is facing. Now that BCH has the world's attention, there will continue to be a tug of war between these two markets which offers more opportunity for day traders in my opinion. Meanwhile the rest of the alts are going nowhere fast. Watch BCH for an inverse relationship. An example is if BTC retests 6950 and fails, in theory, that should be a buying opportunity in BCH. In summary, there is a great deal of momentum pushing this market as well as BCH. This means this is no time for opinions, and where TA will help you the most. If you can't be flexible, then the most you can do is hope things go your way which is NOT a strategy that I recommend. I am watching for the higher low and reversal in the 5870s for a possible long, BUT if it gets there without fulfilling my criteria, I will avoid the trade altogether. And if you are confused by all this, trade forex, its slower. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
28
LTCUSD Perspective And Levels: Breaking Out But To Where?LTCUSD update: Consolidation break out attempt at the 60 level. Compared to the other coins, this market takes much longer to make significant progress but is worth mentioning because a minor retrace can offer attractive reward/risk for a swing trade long. Also this breakout can be the beginning of a broader bullish movement. The 60 level has been the range high resistance for a number of weeks now and has finally been compromised. What makes this break out compelling is the higher low formation at 53.35 and the resistance break at 56. These are bullish formations that imply this breakout has a good chance of following through. This may also be the beginning of the breakout of a very large degree Wave 2 which this market has been stuck within for weeks. Potential near term targets for this move are 65.22 and the 72 area which are both extensions projected from the recent 49 low. Using the 53 level as a reference point to define risk, any minor retrace that stays above the 56 break out level offers attractive reward/risk for a swing trade long. The 58.35 level is a minor .382 measured from the 53 higher low offers a potential reference point for entry. Often on breaks outs like this retracements are shallow if this market is truly strong. My plan is to wait for a minor retrace to somewhere between the 58 and 60 level and look for a small time frame reversal. Using 53 as a reference point for a stop, if I get long at an average price of 58.50 let's say, and my first target is 65, I am risking 5.5 points to take some profit at around 7 points which give me a slightly higher than 1:1 reward risk. Compared to the immediate potential of the other coins, this market is not as exciting, BUT it has certainly been more stable and if this is a broader range break out, it has the potential to run to the low 70s which makes the trade idea much more worthwhile. This is also the type of coin that is an attractive long term hold (as long as some other coin doesn't come in and make it obsolete). So if I manage to get some on a small retrace in the high 50s, I do intend to keep some as part of a core position which has no near term target. (Multi year play). I do like the fundamental story behind this coin and I think it has merit for usability in the future (but I will get out immediately if something better comes out. Cannot get stuck on any opinions ESPECIALLY in these markets). In summary, this market is much quieter and more stable in terms of price action. Often there is not much to say, but today's move could be the initial break out and beginning of a much broader trend that can take price to at least the mid to upper 60s. It is worth mentioning because any shallow retrace will offer reward/risk that is attractive according to my plan. Remember IF it pulls back, there has to be some form of reversal pattern to justify entry on a smaller time frame. If price retraces further and fast and falls back below 56, then that will imply this move is a fake out, and I will reevaluate the entry. In the longer term I think this coin still offers a lot of potential and is certainly one that I want to accumulate if it begins working it's way higher on the big picture. Markets always retrace to some degree, so there is no reason to get overexcited and buy into the top of the breakout. Let the market come to you. Comments and questions welcome.
BITFINEX:LTCUSD
by MarcPMarkets
36
BTCUSD Perspective And Levels: Risky Business.BTCUSD Update: Nothing new on the new high front except for a new high of 7598. When markets trade like this, it is always a good idea to really zoom out to get a sense of proportion and risk. People ask me why is it that I won't go long if I am projecting targets at the 8k level? I realize when I answer, "Risk is too high" that is vague. So in this chart I will demonstrate what I mean. For those who are new to trading in general, the expectations that you have in terms of time frame are a big part of defining risk. Swing trading (days to weeks) generally presents a multitude of risks, with one being larger daily price ranges compared to day trading (minutes to hours) especially in nutty markets like this one. This is why I have been encouraging day trading and staying away from swing trades. When I say I am not taking any swing trades long, it is because of the potential of the pullback vs. the potential of continuing higher. The weekly time frame of this market paints a clear picture of this potential in terms of price proportions. Two price extension levels projected from the recent wave 2 and 4 swing lows point to 7901 and 8006 levels as the 2.618 and 1.618 proportions respectively. These are extensions measured on the weekly time frame and are overlapping near a common price point. Overlapping extensions on large time frames like the weekly usually offer a more reliable point of reference in terms of potential. In my previous report I had a smaller time frame extension in the lower 8k area as well. That is only about 4 to 500 points away which can be achieved in a matter of hours. (Great for day trading). This is a reasonable expectation of potential because it is based on price structure. Now let's consider the pull back potential. When I measure the entire rise in this BTC beginning in the 150s, I get a .382 support at 4776. That means it is reasonable for price to pull back to this level, and still be within a price structure that is bullish. This level also coincides with the old resistance of 4970 (Wave 3 high). Now keep in mind, this does not mean price WILL retrace this far, it means that IF it happens, it is perfectly normal and would offer a buying opportunity. (A move like this can take weeks to play out). So what does all this mean? In theory, if I got long now for a swing trade, and I want to set a reasonable stop based on big picture price structure, I am looking at 1500 points, vs a potential 500 point profit (1:3 reward/risk?). The situation that is driving this market is unusual and serves as an outlier. As a short term trader, I am looking for repetition so that I can determine reliable signals and achieve consistent results, not long shot one offs. If I wanted a long shot, I would play roulette. 1:3 reward/risk? That means if I short it, my reward/risk is 3:1! The bears are forgetting that this is not the only factor when it comes to measuring risk. There is also the probability of the trade going in your favor on this time frame. As I wrote about in my previous report, there is no structure in place at all that makes for a broader bearish argument. This conflict is also another good reason to either day trade or stay out. This environment presents a problem that day trading solves because you are not exposed to all this risk, but can still benefit from the lingering bullish momentum. In summary, when it comes to swing trading, being aware of the big picture is a helpful exercise that offers insight that is not available on small time frames. The example that I illustrated here is not a prediction, rather it is an idea of what is within reason based on price proportions. Price may not come close to retesting 4770 when the larger magnitude correction unfolds, but even if it pulls back half way, you are looking at the higher 5ks which is quite a ways from where price is now. If this doesn't paint a clear picture of risk, than I don't know what will. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
21
BTCUSD Perspective And Levels: No Signs Of Selling. Yet.BTCUSD Update: 7530 all time high is reached as this relentless rally continues. The question is what is how much higher can it go? One extension is taken out after another. The next price target based on an extension projected from the bottom of the most recent bullish structure is 8271 (the 2.618 extension). Yes it is hard to believe price can make it that high, but this market does not care what we believe. At the moment, there is not much on the chart that shows any signs of immediate weakness. Pull backs are shallow and no where near any major support levels. This is why I have been saying in order to trade this market and keep your risk low, it is important to stay focused on the smaller time frames where you can make adjustments quickly. There are opportunities both long and short if you have the plan and the agility. As far as shorts go, this market reminds me of the Dow futures back in 2007. At the time, the market was relentlessly strong and I felt that the strength was simply unjustified. So I was shorting it and getting hammered over and over. It was pushing 14k which were all time highs. Eventually the market sold off, that was some time in 2008. I was a little early. The lesson that I learned besides not to short a market pushing new highs is this: If you are going to short the bigger picture, at least wait for some form of structure like a double top on a large time frame like a 4 hour or above.This may require a ton of patience, but even if you are wrong, and the market still goes higher, your chances of a profitable outcome are much better. Shorting a market on new highs because you feel "how much higher can it go?" is a bad reason to be short. If you want to see a great example of a market that offered structure for bigger picture shorting? Look no further than the EURUSD on a 4 hour or larger time frame. Head and shoulders after head and shoulders. That is what a bigger picture short looks like. Now if you are day trading than you can get away shorting as long a you are taking your profits quickly. A shallow retrace for this market is 300 points, which offers plenty of opportunity for this type of strategy. As far as my plan for this market (since I am looking for longs only), I would like to see IF price can retrace back to 6567 which is now the .382 of the recent bullish swing. While a break of that level can take prices to the 5798 area which is the .382 of the broad bullish structure. IF the market retraces to either one of these levels, that is where I will look for bullish reversals for a possible swing trade long. I do not expect a retrace of that magnitude until after the upcoming fork is out of the way. Also remember that in order f or a retrace like this to unfold, something will have to surprise the market. Just like the Chinese government nonsense over a month ago. Remember that? Yeah neither does this market. In summary. strong markets like this are not driven by logic, and as one trader wrote in a previous comment, "Noone wants to buy the top" so it tough not to get involved one way or the other if you let your emotions get the best of you. Taking swing trades at these levels is high risk long or short (unless you don't mind taking 1k points of pain). Day trading is where the best opportunities are because you are looking for small profits (30 points is small). In terms of proportion, this market can see the 8k level, especially since there is no real selling signals to speak of. My plan as I have written before is to wait for a retrace back to one of my projected levels and look for reversal from there for a swing trade long. No need to get emotional, just a matter of waiting. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
33
BTCUSD Perspective And Levels: New High And More Risk.BTCUSD Update: 7350 all time high reached which is nothing short of amazing. The best way to participate in this market is day trading because IF this market continues higher, the risk will only increase. I have been mentioning it more and more in my previous BTC reports, this is a day trading environment. Why? You can find signals on smaller time frames, capture 50 to 100 points within an hour, and get out for relatively lower risk. That cannot be done on the swing trade time frame because the risk is enormous. Think about this for a moment: No one knows where the high will be. No analysis, indicator or technique will ever forecast the high or low especially on a large magnitude with any degree of consistency. What if you were the trader who bought at 7200 thinking this thing is going to 8k and watching it sink to 6765 over the next couple of hours? Based on the price extension projected from the 5365 low, 7154 is the 1.618 target which again only serves as an estimate. The fact that price went above and back below this level in a matter of hours is certainly something to note. Nothing goes up in a straight line. People who are new to this do not understand the risk of retracing increases, the higher the market goes. At the moment, the first retrace level that IF reached would be perfectly reasonable is 6465 which is the .382 of the recent bullish structure coming from the 5114 low. That is where I would be interested in looking for an entry. If that level happens to break, the next level is 5705 which is the .382 of the entire bullish structure. This level also happens to overlap the .618 of the recent bullish swing which is 5920 to 5520 area. These are the levels that offer more attractive reward/risk compared to where price is now in terms of swing trades. Not to mention, the wave count is clearly within a 5 of 5, and extensions and extreme sentiment often occur on this wave. Yet another reason to not take any swing or position trades at these levels. This is why day trading has a purpose, but also requires experience. Without a well defined structure, your expectations will be unreasonable which will set you up for naturally taking risks that are not proportionate to that time frame. So if you are newer, my recommendation is stay out, or find another market. At the moment, it is easy to get consumed by all the hype and media attention and rocket paintings because it appeals to our greed and fear of missing out further. A lesson I learned a long time ago is that when things in the market look their best, that is usually the worst time to buy, and when things look their worst, that is usually the best time to buy. This market looks poised to go to 8k. This is why I will NOT touch it, not even with borrowed money. In summary, this market is impressive, and could possibly be driven by the expectations of "free money" in the upcoming Segwit2X. Either way, it is not a market that offers attractive reward/risk and does not meet the criteria of MY swing trade plan. Like everything else, it will retrace, but when? It can happen any time, and if I am going to do anything in this market, I would rather wait until one of my retrace prices are reached at least. If you are looking for action, look to the smaller time frames if you have the experience and well defined plan. Better opportunities in these markets are not finite, there is no need to chase, it is just a matter of waiting it out. Comments and question welcome.
BITFINEX:BTCUSD
by MarcPMarkets
88
BTCUSD Perspective And Levels: Converging Trendlines?BTCUSD Update: New highs but on below average volume as it attempts to break out of the fake out zone at 6410. This new high and failure to sell off below the 6k level makes the alternate wave count that I have been writing about clear. What makes this new high suspect is the volume. If you notice, what has been happening in recent price action is a volume spike occurs on the initial leg of the move, and it dramatically declines as price attempts to follow through, like in this case, to a new high. This type of behavior has been followed by a reversal of momentum which makes the current level very risky for new longs. On top of that, price is attempting to push the upper boundary of what I like to call the fake out zone. This is a projected zone that is based on the range of the previous swing high of 6151 to the low of 5365. There is no guarantee that price will fail, but if it does, it is most likely to happen within this zone. Combine that with the below average volume situation, and you can get a better sense of what this market is likely to do in the next couple of days at least. Even though the alternate wave count appears to be in play, it is now possible to draw convergent trend lines on the highs and lows of this price structure. This rising wedge formation implies shallow pullbacks and slightly higher highs in the near term, but longer term this is bearish. Once 5 waves are complete within this structure, a serious correction is likely. Based on a measurement and projecting from the 5632 low, this market can go as high as the 6700s (which is the 1.618 extension from current swing low) before the major correction possibly unfolds. These type of formations commonly appear in Wave 5. One thing that I have to mention about Elliott Wave is that like anything else in TA, it is not 100% accurate. Nothing is. When the market negates a wave count, you have to adjust to the new market information and relabel the formations. This is why it is important to understand and use multiple elements like support and resistance, candle sticks and chart formations to provide guidance as well. (This is especially helpful when markets change fast like this one). So what is the best way to play this market? Day trading offers the best reward/risk in my opinion because it allows you to participate in very short term moves, along with low risk stops and helps you avoid any major adverse movements. It also allows you to trade with a lot more flexibility because the movements on that time frame are proportionally large in either direction. It is not easy though because you must be nimble. Day trading requires a ton of attention, and a very well defined plan. Like I wrote before, if you do not have a process that provides guidance for your decision making, then do not trade at all, especially do not day trade. In summary, the current price action has made for a clearer wave count which is bullish, but also offers perspective on how much longer this momentum can persist before a more serious correction. At the moment, this formation may conveniently line up with the Segwit2X coming up in a few weeks. The best strategies to employ in this environment in my opinion are ultra short term, and if you are sitting on some coins with a nice profit, remember it never hurts to lock some in. These type of rising wedge formations often lead to much more dramatic market reversals, and until that is out of the way, I do not plan on taking any swing trades in this market. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
36
ETHUSD Perspective And Levels: Higher Low Formation.ETHUSD Update: Consolidation breakout to 310 off of the higher low formed in the 280s. This is a bullish sign and implies further strength, with a reasonable target in the 320s. I have been long from 298.84 for a number of days, and actually got stopped out of half of my small position after making an adjustment (this is all explained in previous reports). So I am holding onto 15% of my regular position size. And the possibility of this scenario is the reason why I did not exit my entire trade when it was consolidating in the low 290s. On the next retrace and reversal confirmation, I will look to buy back in with the expectation of a target in the 320s or 330s. This is a tough market and is not one to get overly excited or aggressive about. @Goldbug1 had it right by buying for the long term which means he would not fall victim to the erratic gyrations that are more and more frequent (check out his other alt trades too, impressive). If you zoom out and look at this market on a daily or weekly time frame, you will see price is right in the middle of a huge consolidation that may very well be a giant Wave 2. Which puts the current price action into perspective. Any sudden price spikes, especially on low volume such as this one, are to be met with caution. With that being said, the current spike does establish a clear higher low (HL) in the low 290s area which is a bullish sign. Higher lows often lead to higher highs. So this is my justification for adding more to my current position on a retrace that meets 2 criteria: it forms above the 297 to 293 zone (minor .618 of recent bullish swing) AND I get a reversal formation such as a double bottom or pin bar on smaller time frames such as the 30 min to 1 hr respectively. The reason why I am not painting rockets (besides the fact that I usually don't) is because if you project a price extension off of the higher low, you will see the 1.0 level is just below 330, and the 1.618 is in the 350 area. On top of the resistance zones that are present, and the context of the giant consolidation, this market is not set up to do anything spectacular in the short term in my opinion. Sure a piece of news can spark a move, but if I am going to capitalize on short term fluctuations, I want to at least have a reasonable idea of what my profit potential is, and that is why TA is so helpful. Eventually, if this market breaks above the giant consolidation, it can go up big, which is no where near happening since we are in the middle of the range at the moment, not the highs. In summary, the current price spike does add more to the bullish argument and provides structure that not only implies further strength, but allows for a reasonable expectation of the 320s as a profit target. As long as the next retrace (if there is one) occurs above 297, I will look to add to my long as per my criteria being met. Don't lose sight of the overall context by taking some time to review larger time frames like the daily or weekly charts. Capitalizing on the constant flow of opportunities in these markets is more about managing risk, not jumping into every move. Profit is a by product of good risk management. Questions and comments welcome.
BITFINEX:ETHUSDLong
by MarcPMarkets
35
BTCUSD Perspective And Levels: Wave B Means Bull Trap?BTCUSD update: After retracing to the swing low of 5365, price appears poised to retest 6k again, but what to expect from here? I wrote in my previous BTC report that this market has more bearish signs in light of the Elliott Wave count, but after this bullish swing, the count may be thrown into question. Is this market nearing the peak of Wave B of 4? Or is this Wave 1 of 5? At the moment, price is sitting within the 5863 to 6009 minor resistance zone which is the .618 area of the recent bearish swing. IF price sells off from here, it will be establishing a lower high which is a sign of weakness. Lower highs often lead to lower lows, which in this case would unfold as the possible C Wave which can retest the 5365 low, or even the 5169 support (.382 of recent bullish structure). Keep in mind it is possible for B Waves to establish a higher high which would lead to a large head and shoulders formation in the current environment. Either way the current levels are too risky to establish any new swing trade longs. What IF price does not make a new low on the next retrace? What IF instead, it makes a higher low somewhere within the 5603 to 5500 area which happens to be the .618 of the most recent bullish swing? This scenario will more likely lead to an alternate count where the current bullish swing would be Wave 1 of 5 (instead of B of 4). The bottom of the higher low would be Wave 2 which would open the possibility of an upcoming Wave 3 which we know is never the shortest wave. This scenario would reveal a stronger possibility of the market working its way up to Wave 5 of 5 which can take price into the 6500 area. This count all depends on how price behaves upon the retest of the 5603 area. If it falls through, then it is safe to say that the bearish C Wave scenario is in play. In summary, the market must decide which path it is going to choose, and the best we can do is be prepared for both scenarios. In the short term, it is more important to be flexible and have no opinions, especially if you are shorting or day trading because things change so quickly in these markets. Using Elliott Wave along with projected support and resistance levels can at least narrow the possible outcomes to a more manageable number and offer some sense of short term direction. And right now, the short term looks more bearish. As far as swing trades go, I am avoiding this market until the next support is tested and then evaluate from there. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
31
ETHUSD Perspective And Levels: Higher Low 290s?ETHUSD update: Price is fluctuating in between the .382 and .618 support areas that I wrote about in my previous report. I am long from 298.84 (as mentioned in my update) with my stop now adjusted to 279. I will explain. After reevaluating the price history along with 283 being within the .618 support zone, I thought it would be better in this case to adjust slightly lower to accommodate the support structure in the area. My risk does not increase by much and my rr ratio changes to approx. 1.5:1. I do not usually adjust a stop against a trade, but I make this rare exception because this is where the stop should be based on price structure. Since this market has retested the 297 level that I wrote about previously, it is consolidating (as evidenced by the 4 hour doji candles) and may need some more room for a possible fake out. This is when price goes lower, but without making a new low. In this case, as long as price holds above the 273 support, this market will be in the process of forming a higher low. Higher lows as we know are a sign of strength and often lead to higher highs. A decisive break below 273 which is the recent low, then this market will be more likely to retest the 250 support zone that I wrote about previously as well. IF price holds, especially above the 286 area, then there is a greater chance this market retests the 310 area in my opinion. I plan to add to my position if price can show additional strength which can unfold in a number of ways. One way is a push back above 300 along with a minor retrace followed by a bullish reversal on a smaller time frame such as the hourly. Another way would be the break above a bullish pin bar IF one appears after another retest of the 290 low. Either way there must be some new supportive structure to justify an add of 30%, otherwise I will just hold what I have. In summary, even though there has been a lot of noise resulting from the BTC fork, TA still provides reliable levels to work from. Often environments like this are perfect for day trading because you can capitalize on these fake outs rather than get stuck in them. Most importantly, you have to have a plan, or some kind of decision making process in place that is based on information generated by the market. Otherwise it is easy to get caught on the wrong side of extreme prices, especially in this market. Comments and questions welcome.
BITFINEX:ETHUSDLong
by MarcPMarkets
27
ETHUSD Perspective And Levels: That Was Fast.ETHUSD Update: 304 trend resistance taken out quickly while price is holding above the level, on top of the fact that this level also corresponds to a recent lower high which means momentum is now decisively bullish. I wrote about this level in my previous report, but I did not think it would be compromised so quickly. Like I always say, anything can happen. The question is what to do now? In my previous report I wrote about being flat until the market could show clearer signs of stability. Well this type of move opens some new possibilities. My plan now is to wait for a retrace and then buy back in on the first reversal back up. I am not going to buy into these highs as bullish as the market looks at the moment. The first level I am now watching for is 297 which is the minor .382 of the current swing, and if price happens to push below that, then I will be watching the 287 to 281 zone which is the .618 area of this recent bullish move. Keep in mind price may present an even more shallow retrace, so I will be prepared to buy back in with a 30% position if I see signs that make sense. The fact that the 304 level has been taken out implies further strength ahead and this move can be the initial leg of a retest back into the 330s (the one I was trying to get long for to begin with). Also watch out for the fakes, there have been numerous, An example would be if price retraces to 297, shows a reversal, runs up to 305, and then retraces back to 287. It can happen. So if I manage to get long, and price starts behaving like this, I will get out quickly, because I can always get back in. This is not an easy process, but that is how some environments are. You have to roll wit the punches. Also for those who have been shorting, as I wrote in my previous report, the break of this level is a clear sign of momentum change. Just a heads up. Shorting (which I avoid in these markets) is now higher risk as resistance levels are more likely to break and supports hold. If for any reason price decides to retrace further than the 280s, then the 270 level is one that I will be watching for a larger time frame double bottom reversal. I do not expect price to retrace that low, but that is my plan IF it chooses to. Also 270 is going to be a reference point for risk as well. It is actually an extension level measured from the 286 range low and proved to be the bottom of this impressive rally. In summary, this surprise up swing is a signal of momentum change back to bullish. The fact that the 304 resistance has been taken out makes it reasonable to expect higher prices in the near term. Things change fast in these markets, and being able to adapt quickly is an important part of short term trading. Upon a retrace of 297, or the 287 to 281 zone I will be looking for reversals to go long. I will evaluate the risk at that time, but I can tell you now, I will probably be using the 270 area as my initial stop. Also if I manage to get back in and price is not cooperating, I will look to get out quickly as well. In a bullish momentum environment, price should not be falling apart, even if it fakes out, it should be shallow. Remember we are not missing the train ride, because it is not going to the 330 area in a straight line. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
40
ETHUSD Perspective And Levels: 295 Reversal.ETHUSD Update: The 295 support is compromised again, but price has not been selling off hard. The 286 level is the support that price has rejected significantly and I believe this area offers lower risk opportunities for long swing trades. My previous trade was stopped out at 294, and I am back in at 297.63 (30% of initial position size) my new STOP is 283 and my new target is 335, reward/risk is around 3:1. So why long again? The 286 area is still the acting support, and I have been watching for a bullish reversal pattern somewhere between the 295 and 270 area which is now in play. The pattern is a double bottom appearing right on top of the 295 support on the 4 hour time frame. As I have written about before, the 295 level is the .382 of the recent bullish swing, combined with the historical buying action around the 286 level, and a double bottom formation on a 4 hour? The factors are lining up while the risk is still relatively low. Even if the trade stops out for a loss, I will be happy to buy into this scenario every time. The reason why I am in with a smaller position is a function of risk management. If this current 4 hour candle closes strong, and the high is taken out, I will buy another 30% in that scenario and have a position that is 60% of my usual size. On the other hand, if this is a fake out, and price continues below 285, I have an even smaller position and will incur an even smaller loss. The reason I am aggressively buying back into this market is the reward/risk is most attractive here since my STOP is at 283. If price can stabilize and produce a subsequent higher low while working it's way back into the 305 area, I will consider putting on another 40% to equal 100% of my normal position size and will evaluate the price action from there. My initial TARGET is 335 which puts my reward/risk around 3:1. IF this market continues to fall apart instead, I will not add to this position and possibly exit earlier if I see the weakness. The first sign that this market has any chance of working its way back up into the low 300s will be a strong close of the current candle. A bullish engulfing would be a very good sign. A bad sign would be breaking below 290. If this market pushes below 286, the next significant support is the 258 to 232 area which is the .618 of the entire bullish structure from the sub 200 low. Also if this position begins to falter or show signs of weakness, I will be quick to adjust my targets and/or get out earlier. It all depends on what kind of price action unfolds. The secret to making money (its not really a secret) is not about being "right", it is about getting out with small losses and making more than you lose when you win (position sizing has more to do with it than TA). This process can unfold in a series of stop outs before the win. TA provides the framework to be better positioned for the winning scenario and to provide a reasonable estimate of the risk involved. Just ask some of the top analysts in the community like @goldbug1 and he will tell you the same thing (and make sure to read his excellent analysis too). In summary, the recent pull back into the low 290s still presents an attractive reward/risk opportunity for swing trades in my opinion. With the 286 level so close, any price stability and higher low formation form here will present a clear sign of strength and higher prices in the near term. A retest of the 330 to 350 is not unreasonable at this point, and that is my expectation for my reentry back into this market. The key behavior that I will be watching for is continuous confirmations of strength, like a strong 4 hour close, a push back up to 310 and a subsequent higher low. If this trade stops out, I will stand aside and reevaluate the market from there. Comments and questions welcome.
BITFINEX:ETHUSDLong
by MarcPMarkets
47
ETHUSD Perspective And Levels: Bottoming Formation Hourly.ETHUSD update: Failed low (double bottom) formation appears on 1 hour time frame which is a trigger for a swing trade long. I am in from 309.95 (50% position size) with a target of 335 and STOP of 294. Reward/risk is about 1.5/1 (this will change as I make adjustments based on new price action). I updated my previous post as soon as I took the position. The push off the 287.46 low is a typical momentum reversal sign which are tough to buy into initially because it happens fast and there is not a lot of structure to measure risk from. I mentioned in my previous report that I was watching the 290s and low 300s for a possible higher low in order to justify buying back in. 310 isn't the perfect price, but it still offers attractive reward/risk. The higher low that has formed in the 305 area can also serve as a reference point for risk. A reasonable stop would be 303. I chose to put my stop underl the .382 support at 294 to give it a little more room to fluctuate. (Since I am only at 50% position size, I can afford wider stops). I plan to put on the other 50% upon a break of 316.85 which is just above the recent swing high. While I am eyeing the conservative target of the 335 area, depending on how price action unfolds, I may hold onto part of the position to see how far it can run. A retest of the recent high is not unreasonable while a break can lead up into the 380s. This is the kind of price action I like to see after a retrace to a significant support (295). Even though price went about 10 points lower, in the context of the bigger picture, it is not that much lower which means the bullish trend that took price into the 350s is still intact. This also means momentum should favor bullish setups, especially when price structure forms on time frames such as a 1 hour or 4 hour. This is when factors are lined up and reward/risk makes sense. Keep in mind, price can fluctuate back toward the 305 area which would be perfectly normal, and I would still consider that supportive. Also it is not surprise that BTC bounced off of the 5234 level simultaneously which happens to be the .382 of it's entire bullish swing as well. In the bigger picture, the retrace in that market was normal and is not that far from pushing highs again. As long as that market stays supportive, I think that can only help add to the bullish momentum in this market. Certainly something to watch for. In summary, the healthy retrace to 295 has been a little tricky, but supportive price structure has finally appeared. The higher low at 305, and the .382 support bounce at 295 offer clear reference points to measure risk from. At the same time, it is also reasonable to expect at least a retest of the recent high in the 350s which makes for a reward/risk scenario that is attractive for a swing trade. As long as the 295 support holds, price action should be more on the bullish side. IF 295 breaks again, and the 286 low is compromised, that will negate the bullish structure that is in place. And in that scenario, I will be stopped out and will stand aside to reevaluate. Comments and questions welcome.
BITFINEX:ETHUSDLong
by MarcPMarkets
60
BTCUSD Perspective And Levels: 6K Break Out. Now What?BTCUSD update: Price breaks out to the 6k key level. Based on the price extension from the current bullish swing, a reasonable target after the 6k break is the 6220 area, but as prices rises, so does the risk. I am not one to paint rockets, but the breakout in this market is a sign of strength that should lead to higher prices in the near term. The pullback to the 5240 level was actually a very normal and healthy retracement within the trend. 5314 is now the .382 of the recent bullish swing and the fact that is area held recently means that the bullish momentum is still intact. Since the 5114 low was put in, price structure pushed off of the support which developed into a higher low around the 5600 area. This means 5485 to 5328 is now the .618 of the minor bullish swing off the 5114 level and is a possible support zone for any minor retrace that may occur off the 6k level. If you measure the price extensions from the 5114 low, the 1.0 appears around the 6220 area. This is the more conservative target that I am eyeing in terms of extensions. Based on this structure, this level would present a good place to lock in some profit if you are holding a position. Locking in some profit means selling a small percentage of your holdings to reduce risk and capitalize on the strength while it is present. As the saying goes, "Sell when you can, not when you have to." Also in order for this run to sustain itself, the 6114 level needs to be compromised. If it is not, then this market is more vulnerable to a significant retrace sooner than most will expect. This is based on a conservative price extension where breakouts often fail if they cannot push beyond this point in a timely manner. In my opinion, the favorable volume spike should help price push through. Why is this price action at 6K not extreme? The first time price pushed up into the 5920 area, it got there without any significant retrace. This time, it came from a retrace of a projected trend support level, and retested the high and broke out (along with a volume spike). Since it is coming from higher lows (5240 and 5600), this is just a normal trend continuation breakout that now has some room to run (in contrast to pushing highs without any consolidation or test of support). What about buying now? No way. Buying highs is always a more risky proposition. There may be room to run, but IF price decides to turn back sooner, you will be stuck. That is why I get so bullish on lows as I have in the ETH market. I won't buy highs, but I will buy pull backs when signals appear and criteria lines up at levels that make sense. BTC is now in break out mode which is great for the investors and traders who bought into the pullback, but much riskier for any new longs. The best place to start looking for a more attractive buying opportunity is the 5485 to 5238 zone. It is a minor support, but in a strong market, any bullish reversal pattern in this area has a much better chance of holding in my opinion. A break below that, and price will be retesting the 5114 low. Those are the prices to be evaluating for new longs. In summary, the 6k breakout is certainly an amazing and historical event. There will be TONS of hype, rocket painting, and a media frenzy which makes sense because they are in the business of capitalizing on eye balls, but as price action traders and investors, we know better than to get sucked into that. Based on recent market structure, the break out is certainly normal and does imply further strength, with the 6220 area serving as a conservative near term target. Remember, the market is not running away. It will retrace, like it always does and always will and there will be another opportunity to buy into this market at prices that make more sense in terms risk. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
36
EHTUSD Perspective And Levels: Double Bottom For Swing Long.ETHUSD update: 315 support reached as pin bar appears on this time frame to show a possible double bottom formation. I am long at 321.24 (50% of position size) with a stop at 314 and target of 345 Risk/reward is about 3:1). The retest of the 315 level has played out as I wrote about in my previous report. And the price action at the moment is showing a bullish reversal formation (pin bar) just above one of the levels I was interested in for a swing trade long. My plan is to buy more if price breaks above 324 to have a full position with the same stop and target (I am going to put most of it for sale around that price and hold onto some to see if it can make a new high). This trade is most attractive because I can define my risk of only 7 points and a minimum target of the mid 340s because it is reasonable to expect this market to at least attempt to retest the highs. I do not care if it can break higher or not, 3:1 reward/risk is more important. A break below the 315 level will take this market into the low 300s and possible mid 290s supports where I will look for reversal patterns again if I get stopped out of this trade. I have only half my starting size in order to better manage the risk, so if I lose, I am losing smaller, and if this market takes out the next level 324, I will put on my full position, while taking basically the same amount of risk but with slightly more confirmation. These entries are not perfect, and one scenario that may unfold is the failed low on a smaller time frame. This is where a double bottom variation can occur just below 315. I will be stopped out if this happens, but if I see the formation that am looking for I will get back in. These type of reversals are the ones that I prefer the most, but appear randomly so I am prepared for that situation as well. In summary, the 315 support level retest has appeared and I am now long from the 321.24 level with half of my usual position size. The reward/risk clearly makes sense and I am prepared to add upon a break of 324. If the trade stops out, it is small, especially compared to the anticipated target area. I received a few messages yesterday talking about the failure of the fork. These forks seem to be buy the rumor, sell the news. I am not factoring any of that into this trade, I am only focusing on what the chart is telling me now. Questions and comments welcome.
BITFINEX:ETHUSDLong
by MarcPMarkets
79
LTCUSD Perspective And Levels: Range Break Out.LTCUSD Update: This market breaks out above the 57 range high back into the mid 60s and is just below the 69 to 80 resistance zone. It is coming from a higher low at the 50 level (I wrote about this previously) which is a structure that implies further strength. I wrote about the failed low at the 50 level over a week ago and in light of the BTC rally this market has slowly worked it's way back to the top of the range and broke the 57 resistance which should not be too surprising since it came from a double bottom structure. The question is what to do from here? I like this market both for swing trade potential and as a long term investment. A retest of the high 50s (old resistance) should provide a new support upon any retest. This would be a good place for a swing trade long since risk can be defined by the 50 support level and a reasonable target in the low to mid 70's offers sound reward/risk in my opinion (around 2:1 at least). The old 57 resistance is now the .382 support of the new bullish swing which makes this level even more relevant for evaluating bullish reversal patterns on smaller time frames. The reward/risk from the high 50s is even more attractive in light of the 1.618 extension which happens to be the 84 level (this is based on the measurement taken from the recent bullish structure). Of course, a supportive BTC market will have to continue in order for this market continue working its way higher. IF BTC is in the middle of a serious retracement, and this market is testing supports, then I would not be so quick to buy. I consider a serious retrace at least 600 or more points on BTC. In terms of long term investment, I do believe in the merit of the technology and I don't think it is a bad idea to hold some as a core position with no target. If this market happens to offer the entry criteria that I am looking for, I plan to hold some as an investment as well. In summary, this market has been generally stable compared to BTC, and much more affordable than ETH. Also Fundamentally, this market is one that I believe in for the long term which is why I do not mind holding some as a core position IF my long criteria is met in the high 50s. If I see BTC selling off, I will avoid buying anything until it finds it's next level of stability and then reevaluate from there. So remember, IF this market triggers a long, there will be 2 strategies in play. The swing trade with a target in the mid 70s and a core position without any exit prices. Comments and questions welcome.
BITFINEX:LTCUSD
by MarcPMarkets
23
ETHUSD Perspective And Levels: Range Break Out.ETHUSD Update: 350 high is reached which is just under the 352 border of the .618 resistance zone that this market has been hesitating below for weeks. 357.50 is also the 1.618 extension of the entire bullish swing which serves as a potential target. The move in BTC is impressive and highly irrational, but the move in ETH, although promising, is not that impressive because it is still inside a major resistance zone. And just like with BTC, I have no intention of buying highs, especially euphoric highs such as these. A retrace to the low 300s would be an area that I would now consider for a swing trade in light of this new price action, even though the zone has not been fully cleared. The reason is the low 300s is now the .618 area of this new upswing, and if price can present a reversal pattern below 310, it would be reasonable to expect a retest of the 350 high at least. That scenario offers better reward/risk in my opinion, much better than buying the high and hoping it goes higher. These are hot markets at the moment, with BTC almost reaching 6k and pulling back 300 points within hours is ripe with day trading opportunities. And these conditions are best suited for day traders because you can participate, have the potential to capture relatively large moves while maintaining your risk on a small time frame. I do not day trade these markets, but if you have the ability to provide the attention required by this type of strategy, it is worthwhile for now. Why not take swing trades? Risk is too high. I know this is the unpopular thing to say, but that is how my trading plan protects my capital. Once these hard forks are out of the way, who knows how these markets are going to react. Investors who are in from great prices are playing with house money and even though any retrace will be unpleasant, it will not be worrisome either. People who think these coins are going up big from here, are the ones who will feel the most pain in my opinion and are more likely to be pushed out of their positions when the retrace occurs. I do not want to be caught in that, so I will simply wait. The fact that these markets are finally making significant moves does at least open the door to new potential opportunities, but the factors have not aligned within my swing trade strategy yet. In summary, markets that go up in straight lines, like BTC and now ETH can give it back just as fast. I have seen it happen enough times in other markets to know. If you are in, ride it for as long as you can, but at least lock in some profit along with way. The fact that prices have made these highs is certainly a long term sign of strength, but to expect prices to continue at this rate is unrealistic. As I have written about before, my plan required these markets to demonstrate strength, and they are finally presenting the bullish structure and momentum to justify looking for longs, just not at these levels. Remember if you want more action, trade smaller time frames. I have no problem waiting for the type of opportunity that my plan is best suited for, it is just a matter of the factors lining up, and eventually they will. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
43
BTCUSD Perspective And Levels: Euphoria Prices.BTCUSD Update: New high made at 5420 which is just above the 5385 level which happens to be the 1.618 extension of the entire recent bullish swing. This is pure greed and euphoria in action, and for those who do not know yet, a hot market usually cannot sustain this rate of momentum. I have been cautious up to these highs and I am staying away from any new swing trades in this market at these levels. Yes, new all time highs are certainly a bullish sign, but risk of retrace is way too high at the moment. Based on the current structure, the first reasonable level for a normal retracement is 4914 (.382 of current bullish swing). Price can retrace to this level and this trend would still be intact. And the 4914 is a minor support, because the structure measured is the most recent swing. IF this level is broken, 4437 is the next reasonable level for a retest (.382 of entire bullish swing). This is the level is where I would like to see price stabilize and show reversal patterns for a possible swing trade opportunity. As long as price maintains this level, an attempt to retest the high would be within reason and worth taking the risk in my opinion (IF the market offers the opportunity). The fact that price has gone up so quickly after working its way to the 5K level is a bearish sign because often this is when the majority of the "active" crowd is long. To be more specific, "majority of the active crowd" means the current population of investors who are trading in and out of this market regularly (which is a relatively small market) and when this crowd is mostly long, bullish momentum is likely to dry up. This is what I mean when I use the EXPRESSION "There is no one left to buy" which is not to be taken literally. The size of the candle on the larger time frames is what points to this condition. People have been writing to me about being short, and this is a very tough market to outright short. One way to consider benefiting from a significant retrace would be to buy alt coins against BTC. In theory they should rise as BTC gets cheaper. This is an investment strategy which means buy and hold. I do not have any specific recommendations as far as which alt coins to choose, but I would say if you own alt coins, now would be a good time to add to your core positions since they will be cheap relative to BTC. In summary, it will be interesting to see how investors behave after the forks are out of the way next week. As these markets mature, the coin relationships will change. Just like a month ago when BTC sold off, everything followed, and that relationship has slowly unwound, but that does not mean it won't come back. As traders we cannot expect anything (especially in these markets) to be fixed, or consistent when it comes to relationships. This is why technical analysis is so helpful because no matter what happens, price will still find support and resistance, it will still trend, and it will unfold in formations that offer some clues as to where price is more likely to go next. It is all a matter of evaluating new information and adjusting. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
56