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Bullishmomentum

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
BTCUSD Perspective And Levels: 5K Or The Top?BTCUSD Update: Impressive move to 4940 which now puts this market within striking distance of 5k with a proportional possibility of 5109 (2.618 extension of current swing). Any hesitation from here also brings up the massive double top scenario which is why I am staying away from all of these markets at the moment. In my opinion, the higher it goes, the higher the risk. I have written about the possible bearish C Wave which never triggered (4109 support held) and the large resistance zone that had to be compromised in order for this market to prove its strength (4548 top of the zone taken out). Since that zone has been taken out, this market has been pushing aggressively toward the 5k high. I can now say the market has proven itself, and there are new levels that may offer swing trade possibilities that I will write about since they are present, BUT I am still suspect of this move especially in light of the double top. If this market pushes beyond 5k, it is going to generate even more attention than it is getting now,, attracting more and more longs who will be the source of selling momentum when this market retests supports. i was using this market as a guide for the alt coins since a few weeks ago, they were all playing follow the leader, which is no longer the case. Fundamental factors, software updates, drama, whatever you want to claim is the reason, the fact remains that the alt coins are not following the leader now. I really don't need to know why. This lack of following makes me very cautious and prevents me from buying anything at the moment. If BTC retraces to its nearest support levels, I am curious to see how the alt coins are affected. Will they do the opposite and push highs? I am not betting on it. 4629 is the .382 support of the current bullish swing which is a reasonable level for this market to retest, when the selling momentum returns. A reversal at that level can offer a swing trade opportunity since the structure is in place now, so I will consider it, but my target expectations from there will be very conservative. I have to wait until the retest in order to perform the projections. A significant break below 4629, will likely take price back to the 4432 to 4304 support zone (.618 of recent bullish swing) which would need to hold if this market is going to at least retest the highs, which again can offer a possible swing trade setup but if this area breaks, it can signal a much larger sell off, especially if the 5k top is basically intact. (Double top scenario). In summary, I cannot help but to be extremely cautious at highs like these. There is no real selling at the moment, or any major signs of reversal yet. I simply do not like buying highs because of the potential selling that can follow. A retrace to the 4629 area can at least offer some decent profit potential, but validation is required (this is why I won't simply place a GTC limit order at that price). Sure I want to be long, but NOT at the current level of risk. I will wait for the next support and see how it goes from there. When the market aligns with my plan and standard of risk, I will be open to take action. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
37
ETHUSD Perspective And Levels: Long? Or Wrong?ETHUSD Update: Bullish momentum takes price back up to 315 high while BTC touches 4500. Is this the time to finally give in and buy? NO. When a market looks obvious from a conventional stand point, that is usually time to sell or avoid. Let me explain. I have been writing about bearish signs appearing in BTC and in this market for weeks now. Minor retracements have been met with persistent buying all while in a resistance zone (BTC) or just under one (ETH). I realize there are fundamental events that are highly anticipated and will be taking effect in the next couple of weeks and perhaps this buying is related to that. The bearish signals that I have been writing about (pin bars, double tops) have not triggered in any of the markets, which on the short term can be interpreted as an absence of selling. So if these markets are negating the bearish arguments, why not start buying so that further gains will not be missed? Risk, that's why. Although the bear triggers have not been compromised, these markets still have not pushed through the appropriate highs in order to signal strength of a larger magnitude. 4548 is the number for BTC which clears the .618 resistance zone, and 350 for ETH in order to clear it's .618 resistance zone. These zones warn of a broad lower high which is not obvious to the crowd because everyone is focused on the small time frame price action, and the excitement and euphoria that is all over the media outlets. I do not have any fear of missing out because I know that markets retrace, and my rules guide me NOT to buy highs. And we are at a high (a lower high which is the absolute highest risk area to take on new longs, especially for a swing trade). This is a great environment for day trading because minor supports are holding, like the 280 area, and price is moving decently relative to the risks associated with that type of strategy, but I am not day trading and more concerned about managing risk than "missing the boat". At the moment, 303 is the .382 support for this movement, and 296 to 291 is next minor .618 zone which can serve as a good place to look for day trades. If price falls back into the 280s or below, I will be looking for the bearish scenario that I have been writing about. If price pushes above 315, then it is likely to test the 320 to 350 zone, which again can present day trade opportunities in which I will just be an observer of. No swing trade longs for me. What concerns me the most about this stubborn price action is this: Bloomberg is increasing coverage of these markets, even a former colleague of mine is appearing on Nasdaq's internet news channel and talking about these markets as an authority, meanwhile he sells stock option trading software. From a contrarian perspective, this is equivalent to the shoe shine boy talking about a stock, 100 years ago. They would say when the man on the street was talking about a stock, it was time to sell. It is another way of saying that the majority of the crowd is long, and soon there will be no one left to buy. Back during the Dot.com era, at the height, everywhere you went, every restaurant and party, and even TV shows were referring to stocks. This persisted for about a year before the market peaked. The details may be different, but the idea is the same. In summary, the short term price action appears to be bullish but hasn't met my criteria for me to justify taking risks on swing trades. If you have the time and patience, minor support levels are offering quick profits if you are disciplined enough to taken them. There is nothing technical about observing general signs of crowd sentiment, but my experience tells me these signs cannot be ignored, even in the face of minor bullish price action. If this market is going to work its way back up to 400 or above, the signs will be much clearer and risks will make much more sense after the resistances are cleared. This is a process, not an event. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
42
ETHUSD Perspective And Levels: Selling Structure But No Selling.ETHUSD Update: Lower high in place at 301 to 307 area which has occurred after the break of the 291 support (.382 of bullish swing). This is another bearish sign that shows this market is more likely to sell off, rather than go to new highs. I have been writing about this market and BTC for days now. The wave counts have been pointing to further weakness even in the face of what appears to be persistent strength. The confirmation that bears are in control will be established IF the 280 level gets taken out (this will be a bearish breakout and lower low compared to the previous low). The smaller time frames have been showing strength and traders who do not know how to incorporate the bigger picture cannot see the limitations of this bullish price action. BTC is still stuck within its resistance zone, while this market, if it manages to push higher, still has to have enough buying to get through the 320 to 352 zone in order to prove it has enough strength to continue to even higher prices. IF it pushes the zone, that does not constitute a buy signal. It would have to establish new supports and reversal structures in order for MY plan to qualify a long. The failure off of 312 and subsequent lower high which is now 307 can be the beginning of the selling structure that can turn into the bearish Wave C that I have been writing about for days. The conditions are present to facilitate a selloff, all that is required now is a spark, like some piece of negative news. (If the market sells hard, people will think the news caused it, but the market is vulnerable now. Just needs a reason to push it.) Again I have been using information to stay flat. If some very positive news comes out instead, that can erase the factors that are pointing to serious selling. News is a random element that must get priced into the market. What less experienced traders do not realize is this: news, as much as you like to think has a rational effect on prices, is NOT rational. It's interpretation is dependent on the sentiment of the market crowd, not our individual logic and irrelevant opinions. This is why there are times when news may come out that is good, but "not good enough" or bad, "but not that bad" in the eyes of the crowd. This is why I will let the market crowd figure it out, and once an imbalance is reached (more sellers than buyers or vice versa) then the price action will show clarity allow for decision making to be much easier. In summary, the lower high that is in place at 307 is just another sign that adds to the growing bearish argument in this market. A break below the 280 level, especially accompanied by a catalyst, will confirm bearish momentum which reduces the probabilities that supports will hold if the market retests them. I am just reporting the clues that the market is offering at the moment and they can be erased if some very positive information enters this market. My concern is risk, not being right or wrong and based on the current price action and structure, it appears risk for a long swing trade is very high relative to the potential reward. So I continue to stay flat and wait until the market offers better opportunities. Patience preserves capital, took me years and a ton of money to learn that lesson. Questions and comments welcome.
BITFINEX:ETHUSD
by MarcPMarkets
30
BTCUSD Perspective And Levels: Bullish Yet?BTCUSD Update: I have been explaining my bearish reasoning while the price continues higher. Is it still bearish? Yes and I will use this chart to help explain why. As I wrote in my previous BTC report, price is in the middle of a major resistance zone which is the 4203 to 4548 area (.618 of recent bearish swing). It is a very wide zone which means short term price action can work its way into the zone and appear to be bullish on smaller time frames. This type of price action is great for day trading because it is possible to take quick profits out of these fluctuations. I am not day trading though and looking to position myself for broader moves. Again if you want action, focus on day trades. Within this resistance zone, there are even more specific levels to watch. The 4334 resistance in particular is one that is related to significant selling (look back at chart history). Price is hesitating here at the moment, which is NOT a short signal, but a possible starting point (especially to watch). The other clue that keeps me bearish and prevents me from taking any new swing trade long positions is the wave count. My previous report shows the possible peak of the B Wave, and when the third leg of that wave (bullish Wave C) is evaluated, it is clearly showing a 5 wave structure which fits within guidelines of an ABC correction. A Waves and C Waves are typically motive. And once 5 waves are complete, the market is poised for the next wave to begin, which in this case is the bearish C Wave that I have been writing about. Consider the clues: Price fluctuating within a major resistance zone, Wave C of a corrective B (lower high), and a price level 4334 that has proven to be a resistance before. All you need now is a reason. I mentioned this requirement for a catalyst before and one trader rattled off a whole list ranging from China, to ICO scams, etc. When I say we need a new catalyst, we need one that IS NOT PRICED IN yet. It has to be a new piece of information for the market. It could be anything that can spark the initial wave of selling. Just like the previous sell off was actually happening days before the China news reached the market. I am NOT shorting these markets, but if I were, I would wait for a selling confirmation. Usually this happens once that catalyst is in play. The first thing I would look for is a break of 4032 (new .382 of bullish swing). Once that happens I will then look for a subsequent failed high. Another consideration for investors (besides going back to fiat), is to buy more cheap coins while your BTC can afford to buy more. This has NOTHING to do with swing trading, but something that I would consider because buying alt coins with BTC is an alternative way to be short BTC (I wrote about this a few weeks back). This assumes you have a long term investment plan for your portfolio of alt coins. What if BTC keeps going higher? Anything is possible. A bullish catalyst can surprise the market and negate the bearish signs that are present. Like I explained in my previous report, TA is about evaluating clues and preparing for possibilities. As price action traders we must always be flexible and open to new information. If this market continues to push higher, I need to see the 4548 level get taken out before I start evaluating support levels for new longs. In summary, the best we can do is define possibilities based on information the market provides (through price action) and prepare from there. At the moment, this market is still in a position that is poised to sell off, it is just a matter of a motivational spark. The initial selling may not even be that dramatic, and then the catalyst surprises the market. If I am wrong, and the market continues higher, I don't lose anything because I am not risking anything. Instead I adjust, and if this market is going to have a significant rally, it will offer plenty of swing trade opportunities. Questions and comments welcome.
BITFINEX:BTCUSD
by MarcPMarkets
28