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Whipsaw

EUR/USD Ahead of PCE Price Index NumbersEurope’s single currency is poised to end the week on the back foot versus its US counterpart and snap a two-week bullish phase. As of writing, the currency pair is down by -0.9%. 50-Month SMA Resistance Starting from the monthly chart, the 50-month simple moving average (SMA) at US$1.1109 currently offers dynamic resistance, a line situated just south of resistance at US$1.1233. Together, this area could prove difficult to overcome. Should bulls eventually manoeuvre beyond the said area, nevertheless, and explore territory beyond the US$1.1276 peak (July 2023), this would be noteworthy and signal the beginnings of a longer-term uptrend for the pair. Scope to Continue Southbound Leaving resistance at US$1.1214 unchallenged, price action on the daily timeframe dethroned support at US$1.1127 (now marked resistance) and has opened the floor for further underperformance to support coming in at US$1.1019. This is joined by a channel resistance-turned-support line taken from the high of US$1.0916, as well as 38.2% and 61.8% Fibonacci retracement ratios at US$1.1040 and US$1.1005, respectively. Overall, the trend is higher on the daily timeframe and the recent correction may be viewed as a dip-buying opportunity, particularly at support between US$1.1005 and US$1.1040. H1 Resistance Above US$1.11 Ahead of the PCE Price Index release, we can see price action flirting with space south of the US$1.11 handle. Big figures are widely watched and traded numbers. Therefore, given that the trend is to the downside in the short term and the room seen to continue lower on the daily timeframe, a test of US$1.11 as resistance would be logical. Still, given resistance situated above US$1.11 between US$1.1113 and US$1.1111 (1.272% Fibonacci projection ratio), a whipsaw north of US$1.11 could also be seen (red arrows).
Short
by FPMarkets
What Is a Whipsaw, and How Can One Trade It?What Is a Whipsaw, and How Can One Trade It? A whipsaw occurs when a market exhibits sharp price movements in one direction, followed by a sudden reversal. This pattern can mislead traders and often leads to significant losses if not managed properly. This article explores the causes, identification, and approaches to navigating whipsaws. Understanding a Whipsaw in Trading A whipsaw pattern occurs when a market exhibits sharp price movements in one direction, followed by a sudden reversal. This pattern can be particularly challenging for traders, as it often leads to significant losses if not properly managed. In essence, a whipsaw is a series of rapid, unexpected price changes that can quickly lead to a loss. Whipsaws are common in volatile markets and can be triggered by a variety of factors, including sudden economic news, unexpected geopolitical events, or shifts in market sentiment. In a whipsaw example, the EUR/USD pair broke through a new high, attracting buyers who believed the uptrend would continue. However, the price then reversed sharply, causing those traders to incur losses. After, the price turned around and set a new high but turned down again. Understanding whipsaws is crucial for traders because these patterns can occur across various timeframes, from intraday charts to weekly or monthly ones. Still, those who trade on low timeframes are more susceptible to losses due to smaller capital and tighter stop-loss levels. Recognising the potential for a whipsaw helps traders remain cautious and avoid over-committing to a position based solely on initial price movements. Understanding Whipsaw Trading Recognising a whipsaw involves identifying its distinct characteristics and understanding the market conditions that typically accompany it. Characteristics of a Whipsaw A whipsaw is recognised by its sharp and rapid price movements in opposing directions, usually within a short timeframe. The key characteristics include: - Sudden Price Reversals: Prices often spike up or down, quickly followed by a reversal in the opposite direction. - High Volatility: Whipsaws occur in highly volatile markets where prices are sensitive to news and events. - False Breakouts: A common feature is a false breakout, where prices breach a support or resistance level briefly before reversing. - Stop-Loss Triggers: These patterns frequently hit traders' stop-loss levels due to abrupt reversals, causing unexpected exits from trades. Identifying a Whipsaw To spot a whipsaw, traders typically look for the following indicators and conditions: - Chart Patterns: Whipsaws are visually apparent on charts as sharp zigzag patterns. Traders often see a price move beyond a support or resistance level, followed by a swift reversal. - Momentum Indicators: For example, traders use RSI to gauge momentum. Whipsaws may be identified when the RSI shows overbought or oversold conditions followed by rapid corrections. - Candlestick Patterns: Specific candlestick formations, such as doji or spinning tops, can indicate indecision in the market, which is a precursor to a whipsaw. - Moving Averages: When short-term moving averages cross above or below long-term moving averages briefly before reversing, it may signal a whipsaw. To access these tools and identify patterns in real time, head over to FXOpen’s free TickTrader platform to get started with live charts. Examples and Timeframes Whipsaws can occur across different timeframes, from one-minute to daily or weekly charts. For instance, in intraday trading, a whipsawed stock might break out during the first hour of trading due to news, only to reverse sharply by midday. On hourly charts, earnings announcements can trigger whipsaws as initial investor reactions swing prices sharply before settling. Causes of Whipsaws A whipsaw, meaning a sharp and rapid price reversal, can occur due to several market events. Understanding these causes can help traders navigate and anticipate these volatile movements. Market Volatility High market volatility is a primary cause of whipsaws. When prices react intensely to news, economic data, or geopolitical events, the market becomes highly volatile. This rapid reaction can cause significant price swings in both directions, creating the whipsaw effect. Sudden News or Events Unexpected news or events, such as earnings reports, economic indicators, or geopolitical developments, can trigger whipsaws. For instance, a positive earnings report might initially drive prices up, only for a negative market sentiment or broader economic concern to quickly reverse this movement. Liquidity and Market Depth Low liquidity and shallow market depth often contribute to whipsaws. In markets with fewer participants or limited order sizes, large trades can disproportionately impact prices, causing sharp movements and subsequent reversals as the market absorbs these orders. Algorithmic Trading High-frequency trading and algorithmic trading can amplify whipsaws. These automated systems execute large volumes of trades at high speeds, often reacting to the same market signals simultaneously. This can lead to exaggerated price movements followed by rapid reversals. Trader Behaviour Emotional reactions from traders, such as panic selling or greedy buying, can cause whipsaws. When traders react impulsively to market movements, they contribute to the rapid up-and-down price swings characteristic of whipsaws. This behaviour is often driven by fear of missing out (FOMO) or fear of loss. How to Approach Whipsaws Navigating whipsaws requires a combination of strategic planning and disciplined execution. Traders can potentially mitigate risks and manage their positions by following several key principles. Higher Timeframe Bias Maintaining a higher timeframe (HFT) bias is crucial. By analysing longer-term charts, traders can identify the broader market trend, which can help maintain confidence during short-term whipsaws. This perspective may prevent knee-jerk reactions to minor fluctuations and align decisions with the overall market direction. Confluence of Factors When in a trade, seeking multiple factors of confluence is essential. This includes aligning technical indicators, chart patterns, and volume analysis with the HTF bias. A strong confluence of signals may provide greater confidence, reducing the likelihood of emotional reactions during volatile whipsaw events. Risk Management Strategies During a whipsaw, traders use three primary risk management options: Do Nothing Traders might choose to do nothing if they can justify that the whipsaw is a minor swing relative to their trade idea. If the price is already far from their stop loss, holding the position might be justified. This approach requires a solid rationale to avoid emotional decisions. Trim Position Size Reducing the position size, typically by half, decreases exposure to potential losses while remaining in the trade. This strategy allows the trade more time to work out without the full risk of a volatile market. Move the Stop Loss Moving the stop-loss level to a potentially safer, more distant level can potentially avoid being stopped out by volatility. However, this should be accompanied by reducing the position size to maintain consistent risk. For example, if a trader initially risks 1% with a 10-pip stop loss, moving the stop to 20 pips should be matched by closing half the position to continue risking only 1%. Exiting or Staying Flat In some cases, traders prefer to exit the position or stay flat until more confidence in the market direction is achieved. If a whipsaw is occurring, exiting around breakeven or at a slight loss might prevent the mental stress of watching a position swing back and forth. This approach can potentially preserve capital and emotional stability, enabling a clearer mindset for future trades. Common Mistakes to Avoid Navigating whipsaws can be challenging, and traders often make several avoidable mistakes. Understanding these pitfalls might help in managing trades more effectively. Overtrading in Volatile Markets Overtrading during high volatility is a common error. Traders often react impulsively to sharp price movements, entering and exiting positions too frequently. This can lead to increased transaction costs and reduced overall returns. Ignoring Fundamental Analysis Relying solely on technical analysis without considering fundamental factors can be detrimental. Economic data, news events, and geopolitical developments can drive whipsaws. Ignoring these elements can result in unexpected and adverse price movements. Misinterpreting Market Signals Traders sometimes misinterpret market signals, confusing a whipsaw with a genuine trend reversal. This misinterpretation can lead to premature exits from effective trades or entry into losing positions. Careful analysis and confirmation across multiple indicators can help potentially mitigate this risk. Neglecting Risk Management Failing to adjust risk management strategies during a whipsaw is a critical mistake. Traders might leave stop losses too tight, leading to unnecessary exits, or fail to reduce position sizes, increasing potential losses. Effective risk management, including appropriate stop-loss placement and position sizing, is crucial. Emotional Trading Emotional reactions to market volatility can cloud judgement. Panic selling or greedy buying often exacerbates losses. Maintaining discipline and sticking to a well-thought-out trading plan can help in avoiding decisions driven by fear or greed. The Bottom Line Whipsaws are challenging yet common patterns in volatile markets, characterised by sharp price movements and sudden reversals. Understanding their causes, identifying their characteristics, and employing strategic approaches can help traders navigate these turbulent conditions. Open an FXOpen account to access advanced trading tools and resources that might enhance your trading strategies and help you navigate market volatility with confidence. FAQs What Is a Whipsaw in Trading? In trading, a whipsaw refers to a scenario where the price of a security moves in one direction but then quickly reverses direction, resulting in rapid and often unexpected gains and losses. This phenomenon can be highly frustrating and costly for traders, particularly those who employ trend-following strategies, as it makes it difficult to analyse market trends. What Does Whipsawed Mean in Stocks? Being whipsawed in stocks means a trader experiences a sharp price movement in one direction followed by an immediate reversal. This often results in triggering stop-loss orders and causing traders to exit positions at a loss, only for the price to revert to its original trend shortly after. How to Avoid Whipsaws in Trading? To avoid whipsaws, traders typically maintain a higher timeframe bias, seek the confluence of multiple indicators, and employ robust risk management strategies. Reducing position size, carefully placing stop-loss orders, and avoiding impulsive trading decisions are essential techniques to mitigate the effects of whipsaws. This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
Education
by FXOpen
4
EUR/USD Eyeing Possible WhipsawFollowing yesterday’s FOMC-induced advance from daily support between $1.0726 and $1.0739, chart studies on the daily timeframe demonstrate the scope to navigate higher terrain until reaching a resistance zone between $1.0920 and $1.0883. Given the daily structure and having seen H1 price trading within striking distance of $1.08 support, this could prompt buyers at this level. However, with support positioned below the big figure at $1.0795, a whipsaw below $1.08 into the said support could be seen before buyers attempt to make a show.
Long
by FPMarkets
WHAT ARE Fakeouts, Shakeouts and Whipsaws?YOUR QUESTION ANSWERED! What on earth are Fake outs, Shake outs and Whipsaws? After this you will know… Fake-out: (When the price makes a false breakout of a chart pattern) A fake-out occurs when the price of a market appears to break out of a certain chart pattern. This could be a trendline, support, or resistance level. But then quickly reverses and retreats back within the pattern. Shake-out: (Where the market is highly volatile and the price moves to levels that hits their stop losses and gets traders out of their trades) A shake-out is a scenario where the market becomes highly volatile and the price moves rapidly to levels that trigger the stop-loss orders of many traders. Stop-loss orders are pre-set risk levels at which traders automatically exit their positions to limit their losses. A shake-out is designed to “shake out” weak or inexperienced traders from the market. When stop-loss orders are triggered, it can create a temporary spike in the opposite direction of the prevailing trend. Once these traders are “shaken out,” the market might resume its original trend. You’ll see this most commonly with low liquid, high volatile markets like Penny Stocks or Penny Cryptos. Whipsaw: (This is where the market will change its most prominent direction within the day). Whipsaw refers to a situation where the market quickly changes its direction within a relatively short period, often during a single trading day. This can cause confusion and losses for traders who are caught off-guard. Whipsaws can occur due to various factors, such as sudden news releases, economic data surprises, or changes in sentiment. They are characterized by sharp price movements that can make it difficult to make accurate trading decisions. Whipsaws are especially common during periods of high market uncertainty or when there’s a lack of a clear trend. Let’s create a quick summary of the three: Fake-out: (When the price makes a false breakout of a chart pattern) Shake-out: (where the market is highly volatile and the price moves to levels that hits their stop losses and gets traders out of their trades) Whipsaw: (This is where the market will change its most prominent direction within the day). If you have any trading question let me know in the comments
TVC:SA40Education
by Timonrosso
What are Fakeouts, Shakeouts and Whipsaws?Let's get straight into the three cronies of trading disaster when taking and holding a position. Fake-out: (When the price makes a false breakout of a chart pattern) A fake-out occurs when the price of a market appears to break out of a certain chart pattern. This could be a trendline, support, or resistance level. But then quickly reverses and retreats back within the pattern. Shake-out: (Where the market is highly volatile and the price moves to levels that hits their stop losses and gets traders out of their trades) A shake-out is a scenario where the market becomes highly volatile and the price moves rapidly to levels that trigger the stop-loss orders of many traders. Stop-loss orders are pre-set risk levels at which traders automatically exit their positions to limit their losses. A shake-out is designed to "shake out" weak or inexperienced traders from the market. When stop-loss orders are triggered, it can create a temporary spike in the opposite direction of the prevailing trend. Once these traders are "shaken out," the market might resume its original trend. You’ll see this most commonly with low liquid, high volatile markets like Penny Stocks or Penny Cryptos. Whipsaw: (This is where the market will change its most prominent direction within the day). Whipsaw refers to a situation where the market quickly changes its direction within a relatively short period, often during a single trading day. This can cause confusion and losses for traders who are caught off-guard. Whipsaws can occur due to various factors, such as sudden news releases, economic data surprises, or changes in sentiment. They are characterized by sharp price movements that can make it difficult to make accurate trading decisions. Whipsaws are especially common during periods of high market uncertainty or when there's a lack of a clear trend. Let’s create a quick summary of the three: Fake-out: (When the price makes a false breakout of a chart pattern) Shake-out: (where the market is highly volatile and the price moves to levels that hits their stop losses and gets traders out of their trades) Whipsaw: (This is where the market will change its most prominent direction within the day).
JSE:J200Education
by Timonrosso
[Viking Pattern] Whales' Favorite Trap#Viking #Whipsaw #bulltrap #beartrap Recent financial market seems to be distinctively perplexing and bizarre, often leaving us traders in a state of confusion. Ultimately, our job as traders is to structure market fluctuations, which occur with certain probabilities, into trends and Price Actions based on time and price. The so-called scam moves and abnormal trends that have been frequently observed recently also tend to have patterns and can be somewhat formalized. Today, I would like to introduce a pattern that I have deducted and modeled based on insights of recent data. Those of you who have been trading a lot recently will probably be quite familiar. Interpreted from the perspective of Wyckoff Theory and the Master Pattern, this model ultimately intends to derive Price Action by distinguishing Accumulation and Distribution Phases in terms of horizontal Volume Profile. To systematize this pattern, various technical elements such as LVP (Low Volume Peak), HVP (High Volume Peak), Fibonacci Extension & Projection, Time Fibonacci Extension, trend lines, and parallel channels were utilized. Let me briefly explain features of the periodic phases that compose this model. 1. First and foremost, a significant volume structure forms in the horizontal level as various patterns including triangles (Ascending, Descending, Symmetric triangles, and Wedge, etc.), parallel channels, and diamonds, etc. It would consist of upper and lower bounds derived as either horizontal line (LVP) or sloped line (Trend line). Make sure to clearly mark these lines to later spot the meaningful breakout. 2. A strong breakout through upper or lower LVP (horizontal line) will take place, leaving the volume structure as consolidation zone or sideway channel above or below. Now the market has entered a distribution phase where the direction of a market trend clearly shows. We can target this level with Fibonacci Projection and Extension tools, but I find it quite risky entering against the trend, which would be a counter-trend strategy. In this study, the extension and projection levels utilized are 1, 1.13, 1.272, 1.414, and 1.618. 3. The impulsive momentum, whether bullish or bearish, eventually loses strength at some point forming a significant high or low. After, a new volume structure is generated again at a different level above or below the first structure. If this new structure shapes as relatively rounded or forms potential trend-reversal pattern, such as Cup with Handle, Adam and Eve, or Head and Shoulders, the probability of Viking pattern increases. Typically, the range of the second volume structure tends to be shorter than the first structure both vertically(pricewise) and horizontally(timewise). 4. Another breakout of the second consolidation, with the direction towards the first volume structure appears. According to the textbook, the confluence area where the LVP (which has been SR Flipped) and the trendline of the first volume structure overlap, is most likely to show retest support or rejection. However, if the price breaks through this very spot, which is defined as a POR (Point of Recognition) in this theory, a further impulsive trend is highly likely to follow. The essential part of this model is to spot potential PORs and apply trading setups using this very price momentum. 5. Fibonacci time zone extension tool were applied based on the periodic range of the first volume structure. Most of the time, the horizontal range of the first structure is longer than the length starting from the first breakout to the POR (Second breakout). In other words, if the second volume structure extends the previous one, the probability of occurrence decreases. The periodic extension levels used for targeting POR in this model are 1.13, 1.272, 1.414, 1.618, and 1.818. Here are some examples from various commodities and timeframes. - Bitcoin - Tesla - Microsoft - DXY (US Dollar Index) - ECOPRO 4hr Further studies and reviews of this model are to be updated later. Your subscription, comments and likes are huge motivation for me. Thank you.
Education
by Tommy_Trader
1
AMD Nears Multi-Month Support, Higher Risk for ShortsPrimary Chart: AMD's YTD Parallel Channel and Short-Term 2.5 Month Parallel Channel This post will provide only a brief update to the more detailed technical discussions of AMD from last week. The more detailed technical analysis is contained in a pair of AMD posts linked on the Primary Chart above. 1. Nothing has changed with regard to AMD's larger downtrend structure. As discussed in last week's analyses, AMD remains in a severe downtrend that has shown no evidence of structural change. 2. Last week's discussions identified a false breakout above the shorter-term down trendline, made especially clear by a Pinocchio bar with a long shadow protruding above this trendline. This foreshadowed the large decline that ensued the next day, with the stock gapping down significantly. Since the Pinocchio bar was identified, the stock has plummeted another -15.0% to -17.1%. Isn't it interesting that when stocks are in a trend in either direction, they can go higher / lower than expected? Stocks that seem very low in a downtrend seem to find their way ever lower. 3. An extremely sharp bear bounce could occur at any time . Just look at the prior rallies in the chart below this paragraph. Many of these bear rallies rise nearly vertically from the lower line of the channel (called the return line). This is typical of bear rallies. They tend to be some of the strongest rallies that happen in markets, and this bear market has been a fascinating learning experience (even if painful for longer-term investors) as these rallies and declines unfold. Supplementary Chart: Measurement of Prior Bear Rallies and Bounces YTD 4. Just because bear rallies can happen doesn't mean that every time the lower channel is tagged that a sharp rally will ensue. But a bullish divergence has formed on daily RSI , meaning that as price made new lows, RSI made higher lows. But a bullish divergence can be erased by price falling rapidly to a new low and pulling RSI with it below its prior RSI low. So it's better to wait for confirmation from price. 5. The lower edge of the parallel channel on Primary Chart shows where price could reach in October 2022. This level ranges from about $55 to $51 over the course of this month. The critical question for AMD is whether (i) price will accelerate its downtrend even further by breaking below this line or (ii) whether AMD will reverse there for a sharp bounce back into the channel. One other alternative is that AMD could whipsaw below the line for a few trading days in an extreme exhaustion move, then snap back above the line, signaling an intermediate term rally. Having identified the key levels that may affect the price action, SquishTrade will not attempt to make bold predictions of either (a) a break below the trendline, or (b) a key reversal that leads to a sharp trip back to the top of the channel. Much will depend on the FOMC minutes and CPI this week and their affect on the interest-rate environment. Given the environment (a severe downtrend) and the levels shown, traders and investors can make their best call with tight stops in place that measure and limit risk—risk is inherent in every trade or investment which is why stops are important for everyone except Warren Buffett—or even better, they can wait patiently for a trend-based setup at resistance. ________________________________________ Author's Comments: (1) Thank you for reviewing this post and considering its charts and analysis. The author welcomes comments, discussion and debate in the comment section. Shared charts are especially helpful to support any opposing or alternative view. (2) This technical-analysis view does not constitute a trade recommendation or trade setup. Instead, it attempts to offer technical commentary that describes and analyzes price levels, trends, price action, or the broader technical environment as of the publication date. Technical-analysis commentary does not equate to trade setups or recommendations. Within a given price environment, traders bear responsibility for their own trading strategy, risk tolerance, and time frame, and for any due diligence associated with such trades. (3) This technical-analysis viewpoint could change at a moment's notice, e.g., when price violates a key level of invalidation for a particular view. Further, proper risk-management techniques are vital to trading success. (4) To the extent countertrend price moves are discussed, consider that countertrend or mean-reversion trading, e.g., trading a rally in a bear market, remains higher risk and lower probability even for the most experienced traders and investors. DISCLAIMER: This post contains commentary published solely for educational and informational purposes. This post's content (and any content available through links in this post) and its views do not constitute financial advice or an investment or trading recommendation, and they do not account for readers' personal financial circumstances, or their investing or trading objectives, time frame, and risk tolerance. Readers should perform their own due diligence, and consult a qualified / licensed financial adviser or other financial or investment professional before entering any trade, investment or other transaction.
NASDAQ:AMD
by SquishTrade
31
Dark Pool Buy Zones and Sell Short Risk: LCIDDark Pool buy zones tend to provide strong support for stocks running down. If a stock violates the lows of such support, the rebound tends to come quickly, erasing any sell short profits. This young EV auto manufacturing company is near its IPO price range, which is strong support. The retest of the lows of this bottoming action doesn't show much downside potential for a strong sell short. There is risk that LCID may gap or run down but then reverse quickly and move back up. Whipsaw reversal candles near Dark Pool buy zones can cause big losses for short sellers at this level.
NASDAQ:LCID
by MarthaStokesCMT-TechniTrader
BTC's Downward Breakout May Trap BearsChart 1 : BTCUSD's Downward Breakout From Bear-Flag Channel (Chart 1 also includes a hypothetical price path showing one probable way that price could retest the channel and the downward trendline that has held as resistance since November 2021. BTC's Downward Breakout from Parallel Channel/b] On August 19, 2022, BTC fell over -10%, breaking out below its upward sloping bear-flag channel. This parallel channel has contained price since the June 18, 2022, low at $17,592. The breakout below the channel was also decisive with a taller bearish candle that closed very near the low for the day. As price has continued to rally, volume has dwindled. This represents lack of conviction in the rally when volume does not support each subsequent push higher. Potential Retest of the Parallel Channel In weighing the likelihood of a potential retest of the parallel channel that has defined this bear rally, consider the following points: 1. No one can say with certainty whether the bear rally is finished or whether the downtrend is complete. However, the bear rally may not be complete, and bears opening shorts on this breakout may be trapped in the coming days / weeks. Bull and bear traps have been a common occurrence in this bear market. Note that this is a short-term view only—the longer-term price action and trend structure remain quite bearish, and this author does not advocate a long investment strategy at this time in BTC . 2. Even though the macroeconomic environment remains poor with sticky inflation and tightening financial policy likely to continue in the intermediate term or long term, corrective rallies can push higher and longer than most expect. Markets can remain irrational longer than traders can remain solvent. Market research studies have shown that some of the strongest, sharpest rallies in equity markets have occurred during prolonged bear markets. Look no further than the recent rally: the macroeconomic picture has remained relatively unchanged, but equity indices and cryptocurrencies have rallied significantly in the past two months. 3. While the bear rally may constitute an upward correction within the downtrend, consider that the recent decline on August 19, 2022, may simply constitute a correction within a correction. Stated differently, today's decline may represent a retracement within an ongoing bear rally that has already pushed over 40% higher from June 2022 lows. And the ongoing bear rally is itself a larger-degree retracement within a ten-month downtrend. 4. Breakouts above / below trendlines or channels commonly lead to short-term reversals that (at a minimum) retest the breakout point. In this case, a retest of the channel would lead price to the $23,000 to $24,000 range. Like every common price pattern, whipsaws involving retests of breakout points do not always occur. 5. Currently, price has declined to just above the .618 retracement of its entire rally off the June 2022 low near $17,592. This .618 retracement level frequently holds as initial support or resistance when price corrects a recent price move. The zone between the .618 retracement and the .786 retracement should be watched carefully over the coming week. If it holds firmly as support, this could indicate that the decline is part of a correction within an ongoing larger bear rally off June 2022 lows. (Note that the .618 retracement can be important both during corrective rallies within uptrends and corrective bounces within downtrends.) Supplementary Chart: BTC's Recent Decline May Pause or Reverse at the Zone between the .618 and .786 Retracement Levels Potential Test of the Ten-Month Down Trendline Corrective price patterns frequently work havoc on bears and bulls who want to see consistent trendlike price action in one direction or the other. Note that corrective patterns can be upward, as in the current bear rally within BTC's downtrend, or they can be downward, as the In the short term, price has chopped back and forth within the corrective parallel channel shown in Chart 1. Further, corrections can unfold in complex combinations as Elliott Wave theory teaches. For BTC, the current bear rally is an upward correction. This upward correction And a two-month bear rally could be the first segment of a complex correction—alternatively, it could be the end of the corrective retracement. The primary chart, Chart 1, shows in blue the major down trendline that has defined this downtrend in BTCUSD. This down trendline has contained price since early November 2021 may still be tagged in the coming days or weeks. Important levels of support or resistance tend to act as a magnet for price when price approaches them. The retest of the parallel channel could in theory coincide with a test of the down trendline in early September 2022. If this happened, the test would occur at a price of approximately $23,500 to $24,000. Finally, while many have concluded the final lows were made and others see this as a bear rally, this bear rally still constitutes an upward correction within a downtrend until the weight of the evidence proves otherwise . So this article posits that price could continue the upward correction (retracement) higher or sideways over the next few weeks, and that today's decline might be a downward correction within the corrective bear rally. And any rally may trap bulls with another sharp move lower. After all, markets in equities and crypto have continued to confound bears and bulls alike leaving market makers with bulging pockets full of profits. NOTE: This article is intended to present a relatively objective view of BTC's current price action and key levels using technical analysis. The author has no open position at the time of publication (August 19-20, 2022) on BTCUSD or BTC-related investment products such as BTC futures , BTC ETFs (BITO) or BTC derivatives. DISCLAIMER: This post is published solely for educational / entertainment purposes and does not constitute financial advice or an investment recommendation and cannot account for any person's particular financial circumstances. The author would not want other investors / traders to lose money by relying *solely* on this idea rather than doing their own due diligence. Before entering any trade, please evaluate the risks of (i) the instrument / security being traded, (ii) the type of trade and its timeframe, (iii) risks inherent in that type of trade and its time frame, (iv) the inherent risks of shorting securities (presenting unlimited risk without hard stops in place), (v) the inherent risks of trading options, leveraged ETFs, and cryptocurrencies, and (vi) all financial risks arising each person's personal financial circumstances. CME:BTC1! BITSTAMP:BTCUSD COINBASE:BTCUSD BINANCE:BTCUSDT FTX:BITOUSD SP:SPX OANDA:SPX500USD VANTAGE:SP500
BITSTAMP:BTCUSD
by SquishTrade
12
MSFT redistributingHey y'all I've been watching MSFT as of late as I think it is in the process of redistribution before the next leg down. If you take a close look at what MSFT has been doing lately, you may notice that what it is doing looks quite similar to the leadup to the fakeout rally it had in March. I am currently expecting a very similar move, and am looking to buy any new 52-week-low in MSFT to benefit from such a fakeout rally that I expect could take it to the high 270's, all before shorting it when it gets up there. There are plenty of reasons to suspect the rally would get faded should it get to the high 270's as I am predicting, not to mention how high up MSFT is relatively and its high P/E ratio . Moreover, it is fresh off of distribution. Disclaimer: I believe we're at the end of a market cycle(a crash) and are in the process of redistributing before the next leg lower
NASDAQ:MSFT
by MichaelEugen1
1
Contrarian Call Right Here. Optimal Bullish EntryThis is a typical bullish Wolve Wave that is on the final leg down currently. Expecting whipsaw reversal starting as soon as tomorrow, but main bullish price action will be around June 15 on the full moon (literally howl at the moon). Expecting the yellow trajectory to play out and complete EW wave (5) around 430. The chart contains all the info you need to know, but there are a lot more dynamics at play here, mathematically/statistically, that have led me to feel highly confident about this. - initial target is around 421-422, from there will retest ~415 and then make our way to 429-430 - the goal target is 448 by end of June ...and this makes sense with the confluence of wolve wave 1-4 projection and the ADX breakout "open long" target (stop loss 394) - that DMI is low key bullish af, this is re-accumulation off the May 20 lows in 380s; stochastic RSI oversold and will give the escape velocity needed to reverse here and make explosive move to the upside I'm playing the SPY June 17 411.00 calls and the June 27 429.00 calls, but this is not financial advice. I am fully expecting the price to follow this yellow trajectory, so when you replay the bars at the end of June they'll perfectly coincide with this path, hah. No Cap, Prof. Lupin
AMEX:SPYLong
by JerryManders
11
DXY appears to be bearish despite a downward channel breakoutDXY made a pump from the area last idea mentioned. Despite making a noticeable upward move, the precious metals market seemed unfazed and managed to defend previous bottom areas well. Now it appears more likely that Dollar is not able to sustain the rally, and the arrows indicate potential downward move areas. A bounce from these areas is possible Feds continue to hold a dovish policy and the ECB has indicated it won't target fx rates, meaning the euro rally can continue unfazed. But technicals wise the Euro weekly briefly touched overbought zone and weekly rsi appeared to bounce from oversold areas. Overall DXY and gold are still choppy, but now its more in favor of $ bears and gold/silver bulls for the short term Bullish Scenario: DXY manages to bounce from 92.94 , and at most 92.54 and rallies to new highs Bearish Scenario: DXY breaks 92.5, Then downward channel lows likely target ares How to Play Long: Consider gold/silver longs if one is bearish on the dollar. If one is wanting a more sure trade, wait for a break of 1968-1971 on the gold cfd ( or long silver once gold breaks that area ), and check for the DXY breaking the 92.5 area. Short: Close and Avoid entering new metal shorst for now, wait for a rebound in the 92.94 area or 92.5 area at most. If a rebound is seen from those areas , re enter a short. If no rebound occurs those area, only enter a new short near the downward channel low area.
TVC:DXY
by DynamicTraderBrokers
4
Are the Indians in trouble again?Whilst the Indian market tends to follow the DJI a fair amount - as do other indices - there is major trouble with the virus in India, which probably exceeds that in America. (Expand the chart for a better view) This is a market worth stalking. It may follow the DJI to some extent, but history has shown that it can do 'it's own thing'. The current position is interesting. Some will want to know when is the best time to short or go long. I do not give advice. I'm only showing the position. People can make up their own minds. Disclaimers : This is not advice or encouragement to trade securities. No predictions and no guarantees supplied or implied. Heavy losses can be expected. Any previous advantageous performance shown in other scenarios, is not indicative of future performance. If you make decisions based on opinion expressed here or on my profile and you lose your money, kindly sue yourself.
I
by Captain_Walker
Bogged and planningRecently the market has bogged a lot of people. 2 fake break outs on June 10th and June 22nd. They seemed promising but S and P 500 correlation saw btc drop when indexes dropped. Thus index analysis is important for btc analysis.That being said now days the less obvious move is what the market has been doing. Things can still be bullish to a retirement to the 55ema at 8600 and 100 ema at 8450. But that would be seen as following ta so its best to adjust by having buys ladder 8200-8600 if one is bullish. This 10-12% drop would correlate with the stock indexes correcting 4-5% since bitcoin on average moves 1.5-2 times the amount the indexes do during steep corrections.Recently s and p 500 did -36 and btc roughly -72% from highs ( 14.4k to 3.8). So its a good basis to plan your trades remembering the 1.5-2 figure. And say we hit 8.3-8.4k area , we can bounce to the 9.1-9.2k area and if indexes remain bullish btc can continue its run up. If indexes cave down then a much greater move is possible with btc
COINBASE:BTCUSDShort
by chartingman43
What a day - Rejection off of medium term trend line on hourlyEven though today's volume was below average it didn't feel like it. I haven't taken a whipsaw to the face like that in a minute. We failed to break through the medium term trend line and the last two hours finally got rejected off of it. In my last post i was expecting a retest of the neckline from the H&S but we ended up gapping over it only to be pushed off the trend line from Dec '18. The last two hourly candles are clearly reversal signals. I started the day short but stopped out at 2950.50 on ES, reentered at the rejection, only to be whipsawed by some fake news about the Chinese Commerce Ministry before i could even get my stops set. Caught the top of that candle and rode it all the way down till just now. Not holding any position overnight, the chop is real. I'm expecting us to come back and visit the $288 level on SPY and the $2900 level on ES. But i also foresee many more whipsaws in our future with what seems like the increasingly volatile news cycle both globally and domestically. Goodluck.
AMEX:SPY
by merkd1904
US 30 Consolidating: Expect Shave after the HaircutFibo 0.62 retrace from Mar/Apr lows to the Sep high intersects lower support trendline at 24750. Lower is possible, but... just sayin'. See Chart: res ipse loquitur. The downdraft should stop and pivot somewhere between the two support lines in chart. Should. Might. Expect a 0.50 retrace up from the pivot before next move. Expect another flashcrash to test the lower support sometime this week. Panic is wearing off now, although the indexes declined today VIX was also lower most of day. This is a pattern we see in consolidation- volatility, still high, but settling off peak highs while equities continue to decline and much whipsaw price action is evident. A consolidative pattern should emerge going into week of the 22nd to complete the Zig-Zag correction that began in January, with breakout to upside anticipating the Nov election. In spite of rate hikes and t-bill yields, earnings should propel equities to higher levels by year-end, and the looming recession is not yet in sight over the horizon. A fifth Elliott Wave going into the new year might carry prices to still higher levels before the real break- probably later in 2019. A bear market will likely arrive next year. The P/C ratio and bear:bull bias are so high now the contrarian view suggests we are near a bottom. So many pundits calling for the Great Crash of 2018 it probably won't happen. Great Crashes always happen when no one expects it, and everyone is wildly bullish! Transportation index is already forming its bottom, it is a leading indicator for the industrials. DJT up 65 Monday, with Dow off 90. From Monday close there might be another 500 pt drop left in the bear wave. Risk:reward for selling short now is more risk than reward. Puts are so expensive you would need a massive selloff to realize significant gains, and the darn things run down so fast, even when you're right, you're wrong. I bought a few just in case anyway! This is purely an educational post for your amusement and is not intended as any kind of investing advice. That said, I am accumulating longs as covered call writes. Good luck!
DJ:DJI
by DaddySawbucks
2