Gartley or Butterfly on EurJpy ?? Reason to Short
1) 12930 - 13020 = resistance area
2) EurJpy is moving sideways, but making lower high within the range
2) Gartley or Butterfly ??
Stay tuned!
Lowerhigh
BTC Update! Bears remain in control - what I watch forGood morning crypto traders!
Last chart I discussed using $6441 as my personal stop loss based on it being the most recent Higher Low on the 4 hour chart. Once bulls lost the Higher Highs, I was expecting the bulls to then give way to the bears and let them take a Lower Low. This is where my Stop Loss triggers and locks in my profits from the trade and I happily sit back in cash to watch the trend change play out and see how long the bears will control it.
On this chart, I decided to do more education of how I analyze a chart.
Starting left to right. I placed the green arrows to show our initial uptrend from $6202. We went up, then formed a higher low and then a higher high and continued this pattern until we topped out at $6540. To this point bulls still feel fine as higher lows and higher highs are in tact. They dropped to $6441 for the higher low but then failed to make the higher high after that and then fell to a lower low. Here is the trend change from higher highs and higher lows to lower highs and lower lows. Traders have stops in place to protect capital and lock in profits after the initial uptrend.
Other bearish signs include the EMAs crossing over as well as an uptick in bear volume.
As stated last chart, I was happy sitting in cash unless the bulls were going to show a change from lower highs and lower lows back to higher highs and higher lows.
Bulls made a slight attempt in getting a higher high (all be it by $10) but when consolidating back down, they failed to give a higher low and we saw the spike in bear volume and a push down to this recent low at $6253.
So currently our support is $6253 and then $6202 which was our bottom from when the initial last bull move started at.
Resistance at $6384 for the bulls to re-attempt a higher high. EMAs acting as pretty strong resistance on this move as well so an easy spot for bears to pile in for short positions as EMAs get approached.
So again, remaining all cash and waiting for the trend to change back to the bulls favor. Remember, nothing goes straight up or straight down. There are trades you can make even bullish trades in an overall bearish market that we've seen for nearly a year now.
Just My 2 Sats!
Bitcoin and the Continuous Bear TrendBitcoin needs to break out of the "lower high" pattern of the past several months. To confirm an end to the bear run the price of bitcoin needs exceed previous lower high of ~$8500. I consider this a no-trade zone for now, but that could easily change. I expect it to make another lower high.
AUDUSD - Retracement to Ranging to Lower HighThe dollar has been weakening on retracement which has also caused AUDUSD to progress higher in the form of a major retracement.
That retracement went into a range between 0.7100 and 0.7150 for about a week.
And finally, as of yesterday, the first lower high of the month is created as price started to break away from the range.
This is largely caused by a strengthening dollar and it is very likely for the dollar to strengthen for a third consecutive day base on technical factors.
Most importantly, shorting the AUDUSD near the 0.7130 region allows a tighter stop loss and more space for profit.
ETHUSD: Lower High Points Back To 200?ETHUSD update: Lower high formation relative to the 300 resistance level translates to weakness ahead. Even with the recent attempt toward a more bullish effort, the overall structure remains bearish. If Bitcoin continues to 6K, it will be interesting to see how this market behaves in relation.
Like I recently wrote, we are all trading one big Bitcoin. The correlation remains high no matter what alt you are in. Until this space proves other wise, we use Bitcoin as the general sentiment gauge. Sort of like how we use the S&P for the stock market.
From a technical stand point, as long as the bearish trend lines stay intact, it is reasonable to anticipate weak price action. A close below 200 can lead to a retest of the 160 lows.
The question we would like to see the market answer is: what happens upon a retest of the low? If Bitcoin holds above 5700, this market is more likely to produce a failed low. That is where an attractive but aggressive long setup can materialize.
Although we have been on the sidelines for weeks , we would be open to the possibility of a swing trade long IF our strict criteria is met. This would be one of the few exceptions we would make for a weak market, but it really is a play on Bitcoin strength.
Keep in mind, a decisive close below the 160 level negates any bullish exceptions. We have no problem stepping aside. It has saved us a lot of capital over the recent month and a half.
In summary, Bitcoin leads and the alts follow. Bitcoin turns red, the whole space turns red. This is a general observation, since there are occasional exceptions like XRP (pure herd mentality). I know people hate to wait, but waiting saves tons of money. There is nothing to miss in these markets, especially while there is a ton of opportunity elsewhere like in stocks.
Learning to wait is a skill that is easy to understand, but hard to put into practice. Which goes to show, what makes this game most difficult is not the intellectual or technical part, it's the emotional part. Everyone has the ability to wait, but most can't do it. Why? The answer is not on a chart.
BTCUSD: Indecisive Price Action? Sidelines.Bitcoin update: Price action is holding just under the 6626 resistance level. This minor consolidation can establish a shallow higher low, but in light of the general conditions, follow through is less likely.
In my recent S.C., article I talk about the herd's need for action. There are people that are in this for the thrill of the emotional highs and lows, and then there are people who are serious about making money.
Since we belong to the second group, we recognize there is a time to be aggressive and a time to be conservative. Until conditions improve dramatically, we will continue to be conservative. This means SELECTIVE. This means not taking every signal, trigger, candle pattern or any other rationalization to "catch" the next move.
Yes, there is nothing exciting or glamorous about waiting. Our capital is preserved and prepared for deployment when the infrequent but high probability setups appear. The price action at the moment is random, it can go either way and there is no distinct advantage to buying here. 50/50 trades are not conducive toward building accounts over time.
In the market timing arena, the player defines the game, not the other way around. We like to compare this to the types of poker players that you will find at the average table. There are loose players who play every hand for the thrill, and there are conservative players who are there to make money and will throw away hand after hand until a more favorable opportunity unfolds. An opportunity that fits their criteria for their style of play.
In summary in order for us to take on new risk, particular scenarios need to materialize (shared with our members). The scenarios we anticipate are ones that offer a clear and natural advantage. Whether they pay off or not is a function of probability, but when you have pocket aces, you bet on them. Every time.
We employ multiple styles of trading and investing, neither of which come anything close to day trading. High frequency will fulfill your need for action, but the high costs will not fulfill your trading account. The occasional wins that do come out of such strategies are no different than the small rewards that come out of a casino. They are just enough to encourage you to keep betting, which is what keeps the house in business. Can you clearly articulate your style of trading?
ETHUSD: Nice Try, Long Way To Go.Ethereum update: The retrace attempt may look impressive at first glance, but the broader structure provides a more sober perspective. A move from the 160 area to 224 is nothing to sneeze at, but how much did you have to lose in the process of betting on this random event?
This is one of those situations where good is not good enough. Although the move to 224 has the impulsive traders hungry for more, both broader bearish trend lines are no where near being compromised. Like I have been writing in recent Bitcoin articles, the initial move is the most costly.
At S.C., in order for us to come off the side lines, this market needs to close above 300 at minimum. Otherwise it will have to take the time to build a much more convincing structure.
The initial move is the most costly because in order to prove itself, price needs to test a support to demonstrate the possibility of further strength. Buying too early means you are not only exposing yourself to this adverse movement, but also to the possibility of momentum continuation. Which in this case means a lower low.
In summary, market reversals are not a single event, they are a process. Now that the initial move is in place, our objective is to wait for the market to prove a broader reversal is likely. It can demonstrate that in a variety of ways with the most recognizable way being a double bottom formation.
Getting sucked into the initial move motivated by the fear of missing out is a common mistake, even if it pays a random profit. If this market probes higher, the broader structure is still not favorable for the type of swing trades we aim to take.
If this market is going to recover, it will take time to construct the evidence. Waiting for this requires patience in the face of movement that looks promising, but offers no distinct advantage. We would rather sacrifice what appears to be better prices, for conditions that are generally more favorable. This perspective specifically pertains to our swing trade methodology, and not our inventory management. We do not mix strategies.
That is how we effectively minimize losses and maintain positive longer term performance. In this game, you have the opportunity to only play when the conditions are best for you. Take advantage of it.
BTCUSD: Ugly Yes. Bear Market? Not Yet.BTCUSD update: Now you know why we avoid buying into highs. Price never reached the overhead resistance zone in the 7500's and has retraced sharply. The best thing to do in a situation like this is stand aside.
At S.C., we evaluate everything in probabilities and follow best practices. It was clear that the risk was high as price got closer to the major overhead resistance between the 7500 and 7900 area. We do not pretend to know where the market is going, but we do prepare for scenarios based on how we measure risk. We sent out a more detailed chart to our members explaining this situation yesterday.
When faced with this kind of bearish momentum, there is nothing to do but let the market play out. Price needs to stabilize and find a support before any further evaluation can be made.
As for our portfolio, we still manage Bitcoin inventory and have no intention of selling it. We do plan to rotate out of some of the weaker alts and reinvest that capital back into this market. We share our strategey for that specific rebalancing process with our members.
The alts got seriously punished during this retrace. Many of them have been presenting structures that have clearly warned of further weakness way in advance. This is why we have been so vocal about having a good defense and waiting for better conditions. (Just look at Ethereum).
In summary, getting excited and reacting to fast moves in a market is not productive. The best thing to do is take a step back and let the market settle. As ugly as it looks, nothing moves in a straight line.
We anticipate price finding support around the 6K area. Based on the current structure, it can even probe slightly below the 5750 level and reverse sharply. Do not lose sight of the broader location during periods of dramatic price action. If anything this market can be establishing a very wide consolidation.
As long as price is trading above 4983, it is not that bearish over the long term. Just something to keep in mind when the "experts" start calling for "BTC 3K!" in a couple of hours.
USDCHF - Day Short on Breaking of Bullish StructurePrice has been supported by a trendline as it climbed higher after every retracement.
The rising trendline is finally broken below as the trend reversed as price created lower high and lower low.
The price has now retraced back to the broken rising trendline with a touch at 0.618 level.
A day short to consider after half a week of an uncertain dollar.
BTC DAILY UPDATE (day 155) Previous analysis /position: Expecting a bounce from $7,650 to retest $8,000 and then strongly expected the drawdown to continue from there. Short ETH:USD from $450.
Patterns: Lower high appears to be established at $8,500.
Horizontal support and resistance: $7,500 support becoming resistance?
BTCUSDSHORTS: Pulled back sharply from 21,377 resistance. Will they refuel at 18,000 support? 61% long indicates long liquidations haven’t really started yet. Expect many stop losses to be at $6,800 - $7,250.
Funding Rates: Longs pay shorts 0.1%
12 & 26 EMA’s (calculate % difference): 12 = -3.54% | 26 = being tested for support | Both are starting to angle down.
50 & 128 MA’s: 50 = +9.26% | 128 = being tested for support
FIB’s: 0.236 = $5,920 | 0.382 = $8,496 | 0.5 = $10,677
Candlestick analysis: Long wick on top of monthly closed it inside the trendline. Daily hanging man preceded sell off.
Ichimoku Cloud: Bottom of cloud = $7,078 which is roughly in line with the top of the 12 hour cloud. Bearish TK cross on 4h.
TD’ Sequential: Daily R-2 < R-1 is providing short sale entry |
Visible Range: Point of control over last 24 hours = $7,536 | POC over last 5d = $8,170 | POC over last year = $8,050
BTC’ Price Spreadsheet: 12h = -0.58% | 24h = -3.35% | 1w = -8.21% | 2w = +/- 0 | 1m = +17.35%
Bollinger Bands: Testing daily MA for support.
Trendline: Retesting trendline that was broken on July 23rd.
Daily Trend: Bearish
Fractals: UP = $8,288 | DOWN = $7,207
On Balance Volume: Coming down w price
ADX: +DI and - DI are getting ready to make bearish cross with ADX > 25 indicates upcoming bear trend.
Chaikin Money Flow: Below 0.05 | Will it establish another higher low?
RSI: Threatening to cross below 50 and daily and just fell below 50 on weekly.
Stoch: Dumping on the daily. Still healthy on weekly.
Conclusion: It appears like the price has fallen through another level of support without getting a bounce. That means bears are getting confident and bulls are becoming skittish. Red 2 below a red 1 is providing a short entry but we are still at what I’m viewing as an area of support. Anywhere from $7,250 - $7,500 could provide a bounce to $7,800 - $8,000. If you do enter a position right now then I would still put the stop above that area. I still believe that ETH is offering a better opportunity to short, click here for my analysis on it.
BTC - Bitcoin planning ahead!This is the daily BTC timeframe looking at the downtrend.
We hit a possible reversal point which will lead us to the next Lower High (LH). If we manage to break the yellow line, expect bullish momentum.
(This is not financial advice, this is a volatile market where anything can happen)
HSI Futures: Top of range short This is a follow-up from my 15 May post; HSI futures completing an intra-day ABCD and making a lower high (78.6% retracement) with a negative MACD cross-over. Initial target would be 30,550, -2% for an eventual test of bottom of the range at 29,500.
BTCUSD: False Breakout And Pin Bar Point To Low 6Ks.BTCUSD update: Price has established a bearish pin bar after fluctuating around the 6431 to 6614 resistance zone. Like I wrote previously, this is a tricky area to enter new longs, especially with the 7120 reversal zone boundary coupled with a holiday trading environment.
6431 to 6614 is the .618 minor resistance relative to the recent bearish structure measured from the 6850 peak. Generally it is not the most attractive location to initiate new swing trade longs, but an exception is possible depending on the candle formations.
At the moment, there is nothing that offers a long trigger that would be worth making an exception for. With a bearish pin bar present, a break below 6414 would be a sell trigger according to the swing trade criteria that we follow.
At S.C., we always make it a point to follow best practices. That means aiming to buy near supports and selling near resistances. Since we do not short these markets, buying near a support would be the basis of our next swing trade idea. And the anticipated support is between 6126 and 5977 (minor .618 support relative to the current bullish swing).
There is nothing for us to do but wait, especially if price drifts into the 7120 bearish reversal zone boundary. With the U.S. holiday affecting the entire week, false breakouts are very likely which can lead to a sharper correction.
In summary, at S.C., we are anticipating a higher low formation following the next retrace in this market. This scenario would signal a broader bullish move is in progress. That is where we plan to initiate a new swing trade long. Until then, we wait and monitor inventory that we accumulated across the board while these markets were looking their worst (we published a number of articles on S.C. about our purchases).
There is no hurry to buy, especially in a holiday market where noise and lower volume is typical. Either this market will retrace and offer a higher low possibility, or consolidate and squeeze into the reversal zone. S.C. is where we will share a new trade idea if this market offers one. Otherwise we continue to wait.
ETHUSD: Next Test Of Support In The 430s?ETHUSD update: Price is hesitating just under the 494 to 518 minor resistance zone after taking out the bearish trend line. This is a tricky situation because at first glance, this market appears to be forming a lower high and following the recent "trend". What is not visible is the probability of the location of BTC which we have been reiterating is bullish and ultimately determines where all the coins go.
No matter how we analyze and examine this market, it is going to do what BTC decides to do. The only reason why I take the time to evaluate the levels and formations is because it is a way to quantify risk specifically for this market.
Since the bearish trend line has been taken out across all the major coins, at S.C., we are anticipating the next retrace to present a higher low. For this market, that means looking for a reversal pattern somewhere in the 430's.
If price falls through, then 392 is the reversal zone boundary to watch for bullish candle formations. Again this movement all depends on the sentiment and order flow of BTC.
In summary, the higher low that we are waiting for may not happen the way we anticipate. Especially in this holiday market, price may consolidate and squeeze a little higher unexpectedly.
At S.C. we are only interested in probabilities, especially on a broader magnitude. When these markets begin to align with our expectations, the next step is to refine the risk. One way we do that is using specific entry criteria that either the market will meet, or it will not. This is an imperfect process that does not catch every opportunity, but it serves a much more important purpose. It filters out a high frequency of trades with negative outcomes, preserves capital and allows for unemotional binary decision making. The benefits are definitely outweigh the occasional opportunity cost. What is your process?
BTCUSD: Bearish Momentum But Support Zone Still In Play.BTCUSD update: Price has taken out the previous spinning top low which is a bearish sign. Even though this is the case, the 6K and 5956 reversal zone supports are still in play. If this move fails to make a new low, this market will still be in position for a sharp squeeze.
5755 is the low that needs to be taken out in order to prove bearish momentum is still in full effect. Like I wrote previously, bottoming is a process, and it is far from precise.
At S.C., our swing trade was stopped out at 5980. Stops are not pleasant, but they protect accounts from being wiped out by hope mode. That is when you stay in the trade, hoping it comes back.
Our inventory strategy does not change in a situation like this and the stop order was only for that specific swing trade. We are watching for a reversal formation to get long again because our strategy takes into account the probabilities of the broader location, and does not place any weight on noise.
As long as price stays above 5755, it will likely be setting up for a squeeze. If price reaches 5669 and reverses quickly, that will also count for a failed low formation which will prompt us to look for a bullish reversal trigger as well.
The bearish scenario for us is a break and close below the 5669 reversal zone boundary. In that scenario, we will stop looking to buy and just wait for stability to return.
In summary, bearish momentum can present tough price action when it is right in the middle of a major support area. At S.C., we consider this random price action until the market provides proof by taking out a major level. These are the kind of areas where patience from experience comes into play. Our bullish outlook has not changed, because nothing says that this market is going to make a new low at this point.
The most we can do now is wait for structure to line up for the next swing trade long.
BTCUSD: 6K Psychological Support Means Higher Low More Likely.BTCUSD update: Small retrace back into the 6K psychological support. The 6350 area is now a lower high, but if this market was going to sell hard, the bearish candle should have been larger. Instead, price stops at the major support which hints at a higher low.
What I find most interesting is how the negative sentiment is at an extreme (judging by all the bearish talk), while a giant pin bar has printed on a major support level.
What many do not realize is, if this is a short term bottom, it is not going to retrace in a straight line. Bottoming is a process and what price appears to be doing at the moment is retesting the 6K psychological support. If it holds again, a higher low formation will be established.
Keep in mind price has been in a high probability reversal area for days. The process is slow, but once the structure materializes, it often just needs a spark. A news item of some kind that catches everyone off guard, especially the shorts.
Often in a high probability area, order flow expresses itself in ways that indicate some kind of accumulation is taking place. A higher low is one structural example of this process, and is especially relevant in situations like we have on this chart.
In summary, I have been writing about looking beyond the charts in a situation like this. The location and recent structures are all pointing to a greater possibility of reversal but it is not obvious which is why the opportunity still exists.
Price can even retest the 5669 reversal zone boundary and as long as it holds, this market is more likely to reverse than break below this entire support zone at 4983. Of course anything can happen, and an open mind must always be maintained, but at S.C. we bet on probabilities more than anything else. And there are just too many bullish signs in this situation to ignore. Over on S.C. make sure to follow our swing trade updates for this market.
ETHUSD: Lower High Obvious But Don't Ignore Support Zone.ETHUSD update: Price has reached the bearish trend line and is now hesitating. This is not unusual and was expected, that is why we placed our swing trade target at 540. The question is: what is price more likely to do from here? Lower low? Higher low? Or continuation higher?
In case you have not been following our swing trade on S.C., it reached its 55 point profit target 2 days ago. The selection of that target was partly based on the bearish trend line.
The bearish trend line has been slightly compromised, but not enough to change our short term outlook. Bearish structure still dominates the short term momentum and until that changes, we are going to be very conservative as far as putting on new swing trades and their respective profit targets.
The short term bearish argument is as follows. If the 516 inside bar low is taken out, followed by the newly established bullish trend line, then this market is more likely to retest the 458 reversal zone boundary. In an extreme sell off, price can even test the 423 reversal zone boundary. This is the type of price action we wait for when it comes to our inventory building strategies.
Again, the selling scenarios are all IFs. Meanwhile, price is still within a broad support zone. The 544 to 464 area is the .618 of a recent bullish structure. As imprecise as this area may be, it cannot be ignored. It does present a chance that a higher low or failed low formation can materialize here. This is what the bears are not seeing and will be seriously caught off guard. Great scenario for people who hold inventory.
Another sign that canot be ignored is if the bullish trend line stays intact. A long signal off of the current inside bars can also catch many by surprise. If this happens, it will most likely be lead by a similar signal in BTC.
In summary, before any of these markets show real signs of recovery, they need to take out their trend resistance levels. In this case it is the 625 level which is the .382 of the recent bearish structure. Until then, we are likely to see wide range bound markets that do not make any real progress.
At S.C., we are not convinced of a completley bearish market because of 2 conditions. The first is the general bullish price location. The second is the premise that this market is forming a broad higher low formation which is also still in line with the Elliott Wave count I posted recently.
This type of environment is not without its opportunities, but patience and realistic expectations are key. We let the market tell its story and adjust to it, always evaluating the risks vs. potential rewards. No matter where it goes, we have a plan of action for that scenario.
Your own plan will serve you better than anything else. As I have been reminding our followers at S.C., use quiet time to plan ahead and to expand your knowledge. You will be much better prepared for when these markets get busy and the reactionary crowd returns.
BTCUSD: 6850 Double Top Break Can Lead To Test Of 7Ks.BTCUSD update: Bearish pin bar low taken out by current candle, a sell signal, only for it to bounce right back. This is a bullish sign which makes sense in light of the general area price has been trading. Keep in mind, there is a great deal of conflict in this area with short term bearish structures going against a broader bullish location.
People are going to see different things depending on the time frame being observed. At S.C., we are focused on the potential of the big picture. Even in the face of a sell signal, this market is in a broad support zone that I have been writing about for months. This would be the 8171 to 4983 area which is the .618 of the entire bullish structure relative to the 150 lows.
Bearish signals in such an area are high risk, unless you are day trading and using small profit targets. Even then it is hard to justify the benefits considering the amount of attention and costs that go into such an activity.
If the 6850 minor double top breaks, this market can squeeze to the low 7Ks which is where the bearish trend line is located. This is a reasonable expectation for a short term move.
The question is, what happens at the trend line? If a lower high is established, this market can see another attempt at the 6K low. This scenario can present an attractive buying opportunity which we will be watching for.
If the trend line breaks, the 7790 resistance (.382 of recent bearish structure) is the next bearish obstacle. When that level is taken out, the short term outlook will switch from bearish to bullish which changes how we determine stops, targets and expectations.
In summary, I often have to repeat that this is not about predictions. It is all about IF. At S.C., we let the market make the choices and based on that information we make adjustments or take no action at all. Since we focus on the bigger picture, and follow best practices, we prefer to bet on the long side, even when it is counter to the short term price action.
Market timing is an arena where in reality there are no rules. The only limitations we face are set by our capital and exchange regulations. There is nothing that says when the game begins, how it is played or when it concludes. In this space, you must define every aspect of the game, and that is what an investment or trading plan is all about. Without one, you will be part of what makes a market liquid, not a participator who capitalizes on liquidity. Just something to think about.
LTCUSD: Bearish Price Action Near Bullish Reversal Zone.LTCUSD update: A strong outside bar has appeared in this market which can be the beginning of the next retest of the bearish trend line. The current hesitation though can be cause for concern, depending on how the candle closes. Keep in mind, this market is following BTC which means even in the face of bearish structure, the greater potential remains bullish.
The bearish trend line is still in play around the 108 level. Beyond that, the 125 resistance (.382 of recent bearish structure) still stands. Price still has a ways to go before we can get excited about any significant bullish gains.
Until it takes out those levels, it has the 90 reversal zone boundary holding up any attempts lower. This is the area to watch for accumulating opportunities.
With the price as low as it is, BTC does not have to go far for this market to spike higher. Look at ETH. At S.C., we called a swing trade long back on 6/13 which hit its 55 point profit target earlier today. BTC did not do anything spectacular, yet ETH outperformed. The same type of behavior can take this market by surprise as well.
In summary, short term formations may be bearish, but it is the probability of the bigger picture that carries more weight at these prices. The major coins are in an area where a large magnitude failed low can be forming. Like I wrote in a previous BTC article, these markets are in a hot spot, all they need is a surprise catalyst and off they go.
Most importantly you must be able to make your own decision. You must do it based on your own reasoning, not what the "experts" think. The herd of analysts are calling for BTC 3K. Now? Why weren't they calling for this when BTC was at 18K? If you read the reports I was writing at that time, I was promoting caution and staying flat while the crowd was feverishly buying.
If you find yourself confused by the conflict, then avoid these markets all together. Eventually they will work themselves out and make more sense, but by that time, you will be paying much higher prices.
Avoid the noise and follow the charts on the bigger picture. That is where you will find more clarity.
ETHUSD: Broader Wave Count Still Bullish. 600 Break Is Key.ETHUSD update: When the day to day momentum dries up as is the case with these coins, it is always helpful to zoom out. This is where Elliott Wave offers a lot of value because it shows us where we are on the bigger picture map, and most likely where this market is going.
People give Elliott Wave a hard time because they expect precision and that is not what it offers. Instead it provides a sense of location. It helps to answer "where are we?". And what needs to happen in order to make some sort of progress?
In the case of ETH, if the current structure bottoms out and establishes a Primary Wave 2, it will be setting up for a Primary Wave 3 of Cycle Wave 3. Basic rules of an impulse dictate that Wave 3 is never the shortest wave. Also Wave 3's and 5's have a tendency to extend. This all means there is a lot of bullish potential baked into these markets over the long term.
In order for this broad scenario to begin to confirm, the 598 resistance (.382 of recent bearish structure relative to the 828 high) needs to be taken out. In other words, once the 600 psychological area is cleared, this market will more than likely be in a subwave 1 of the Primary Wave 3.
If this market continues lower, it can go as low as the 380s and still be within the rule that says Wave 2 does not go below the start of Wave 1. This is why Wave 2's and Wave 4's are so tricky, especially at their extremes.
In summary, as we have been writing on S.C. about how quiet markets call for preparation. Do not force trades, instead define scenarios and be prepared if the market aligns, or if it doesn't. We are not here to predict, only trade probabilities and manage risk. No indicators are required to accomplish this, but a decision making process is.
Elliott Wave is an effective analytical framework to use especially for long term perspective. It does not make any promises, but it does provide a road map to compare scenarios against. Take advantage of this quiet time in the market and learn the basics. It is a big first step in developing your own perspective and that is more valuable than any ideas you get from an "expert".
BTCUSD: Conflciting Signals? Bigger Picture Potential Bullish.BTCUSD update: Symmetrical triangle has appeared after a series of inside bars. This continuation pattern implies lower prices, but the bigger picture location makes for a very conflicted technical situation.
The break of this triangle points increases the possibility of a retest of the 5956 reversal zone boundary. Or just above that at the 6005 historical support. The conflict comes in when you zoom out and observe the price location.
The 6005 to 6565 levels are both significant supports where buyers have appeared previously. 8171 to 4983 is the largest magnitude .618 support zone that is relative to the entire bullish structure originating from the 150 lows. And the failed low configuration relative to the April lows.
These broad considerations point to a greater probability of a large recovery move. As I wrote in my S.C. article on ETH earlier, these markets are in position to rally, all they need is a spark.
The "spark" or catalyst is something a chart will not help you see. Usually they come out of no where and take the market by surprise. Kind of like the way Draghi hammered the Euro 300 pips the other day.
What you must decide is what time frame you are betting on. The short term is still showing signs of bearish momentum with the trend line and 7790 resistance (.382 of recent bearish structure) still intact.
At S.C., we are not day trading. Swing and position trades contain the scope of our evaluation, expectations and trade decisions. This means we are still betting on the bigger picture. We are betting that the attractiveness of the broader location outweighs the small time frame momentum.
If price pushes lower, we take more pain and get stopped out and will simply look for an opportunity to get back in. Otherwise we are positioned to benefit nicely if the a bullish spark takes this market by surprise.
In summary, we don't bet on opinions, we bet on probabilities. Any updates will appear on S.C., follow along for a better idea of the decision making process we use, especially in situations like this.
