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ETHUSD Higher Low And Long Entry.ETHUSD update: I am LONG from 420.27 with a STOP at 396.45 and TARGET at 453. Reward/risk: 1.4/1. The entry criteria has been met for a swing trade long. (Trade was posted as an update in my previous report). I will explain the thought process further. As I wrote in my previous summary, buying into a pullback within a broader bullish trend is in line with my swing trade plan, BUT there has to be some form of confirmation. That confirmation has appeared,and as a trader, I have done my part: followed my plan, now the rest is up to the market. As far as levels go, the 422 to 400 area is the .618 support zone of the recent bullish swing. That was the first point of interest, but not enough for an entry. I wrote about the 391 level and how I wanted to see a reversal formation between there and 361. 391 held and the higher low formation has appeared around the 400 level along with a newly established broader double bottom formation off of 391. A higher low on a smaller time frame off of a larger double bottom in a generally strong market is in line with my plan. Even if this trade stops out, I waited for everything to line up in my favor. Having these definitions and letting the market prove itself is better than buying too early and not knowing if this market is going to hold or collapse. At least I have structural evidence that suggests the bearish scenario is now much less likely. Why 453 target and not 500? (Or some other ridiculous number like 1k?) IF the market offers the opportunity to sell at 453 quickly. I will exit half the my position, and trail my stop manually from there. I try to lock in some profit and reduce risk as soon as soon as my plan calls for it. I chose 453 because it is just below the 455 old support/new resistance level and in the middle of a .618 resistance area of the recent bearish swing. Since this market is generally bullish, there is a better chance that price breaks above that zone and retests the 500 high, so I intend to hold some for that possibility. I don't know if my trade will work out, all I know is that the factors for the outcome that I am looking for are now in line. That is the purpose of a trading plan. I don't have to think, or worry, everything is defined ahead of time, from the entry, to the management to the exit. The hardest part is WAITING, as many people do not have the patience, especially when markets like BTC go to 17k in a matter of a couple of days. I suspected this market retraced because of the BTC spectacle but that is just a hunch. If this market has retraced because of congestion over some cat game on the blockchain then that is not really a good sign in my opinion. How is it going to handle serious applications where there is a lot more at stake? As a short term trader, I really don't care why, because I am not trading on that information. I used to trade stocks of companies that produced nothing. It is price momentum that I am interested in and that's it. In summary, I am simply following my plan and that is the best I can do. Now I just have to manage the trade as the market unfolds. Things change fast and that is why a well defined plan is so important because it enforces rules and minimizes emotions. Many new traders are soon going to learn the realities of trading. BTC is lala land, no skill is required to buy and hold. When that market returns to reality that is where the skilled traders will step in and capitalize on all the bad habits and euphoria that is running rampant in that market. A 5K move in 5 days without a retrace is a breeding ground for unrealistic expectations. Learn to structure your decision making process, and no matter what conditions you face, you will at least align yourself with the probabilities while at the same time knowing how to constantly adjust for risk. As much as people criticize TA, it at least provides the tools to build a framework for consistency. Comments and questions welcome.
BITFINEX:ETHUSDLong
by MarcPMarkets
35
BTCUSD Perspective And Levels: Up, Up And 12.5K. Going Higher?BTCUSD update: 12K reached as this market is pushing highs as I write. The reversal zone boundary at the 12100 area has also been compromised which is a sign that strength is likely to persist for now. Sure this is historical and will continue to attract more and more attention, which feeds these markets even more (positive feedback loop: google it). The only thing I can do as this market offers little opportunity for me right now is continue to measure and evaluate supports while observing price action. Little opportunity? It's going straight up! As I have explained many times, I do not buy highs. I follow my plan, not my fear because opportunity is an unlimited resource. I am curious to see how the futures affect the price action in a few days and would actually prefer to trade the futures instead because of the security and flexibility that the new contracts will offer, especially for shorter time frame strategies which is my specialty. In terms of levels at the moment, price is sitting on the 1.618 extension projected from the 8821 low. The next reasonable target is the 13237 level (1.0 projected from 8821) and then the 14700 which is the 1.618 extension projected from 8821 as well. The nearest support is the 11050 level which is the .382 of the recent bullish swing at the moment. As price continues higher, this level will continue to adjust higher as well. These levels serve as points of reference to keep expectations somewhat in line and offer short term targets. IF price breaks below the 11050 level, I will be anticipating further selling because the level is so shallow relative to the recent structure. Until something like that happens, there are NO reasons to sell or get short at the moment. It's funny because I read an article from a well known financial publication that actually mentioned the built in inconvenience to short these markets that the futures will address. In summary, times like this can easily get the best of your emotions and blind you to the amount of risk that is present at the moment. I believe the futures will bring more balance to this market, not drive it to 30K anytime soon. I do not fight markets, I just read the signs and adjust to what the market presents and will participate as long as it is within the boundaries of MY plan. If the market is not in line with my plan, it doesn't matter how high or low it goes, I will avoid it all together. Most importantly if you had the courage to get in recently, just make sure you have a well defined plan that will guide your decisions when this market turns because when it happens, it will be fast. Depending on others opinions to base your decisions on is a really bad idea. The type of market that we are in at the moment is rare, and can persist long enough to make the world believe that "it's different this time". This is why I day trade (other markets) because it doesn't matter what the market does, you simply adjust and trade. Comments and questions welcome. (Thank you everyone for the feedback from my previous report. It was very helpful).
BITFINEX:BTCUSD
by MarcPMarkets
33
BTCUSD Perspective And Levels: 12K And The Future(s)?BTCUSD update: Sitting on the high, this market is still poised to go higher. There are two extensions to be aware of: 12400 and 14750. The CBOE is aggressive and will have the futures trading in a matter of days followed by the CME shortly after. No one knows how they will affect this market, or the alts, we have no choice but to wait and see. Meanwhile this market does not really retrace. It almost seems too easy: "just buy and you will make money", "it's different this time", etc. I don't like to be the one to burst people's "bubble" but it is not different this time. The Dot.com era offered the same promise, and it delivered on it's promise, the internet has dramatically shaped the future and has presented limitless opportunities, but the equity markets experienced two serious corrections since then and the majority of internet stocks that existed 20 years ago no longer exist. I do not know when this market will experience that magnitude of correction. The scope of my analysis covers short term price action, and there is still no sign of weakness. There are two levels just above where price can potentially reverse, but that is no reason to get short. There is 12100 which is the upper boundary of the reversal zone measured from the 8821 low. There is the 12400 extension which is measured from the 5400 low and then there is the 14700 (1.618 extension) projected from the 8821 low. 14700? Proportionally that is a potential target for this market (doesn't mean it will get there right away). As far as support goes, 10700 is the active support for this market (.382 of recent bullish swing). At this point, unless you are trading small time frames, I am using a break of this level as a signal for coming weakness. The break would have to be significant (price will have to be trading back toward 10102). A break by 100 or 200 points is not very meaningful in this market. And for those itching to short, the best time to start looking for setups is the retrace AFTER that break (and I would also wait until the futures are trading since this market is severely skewed by the inability to short and Tether). Until then, momentum and structure are aligned for higher prices. Now, I keep getting messages asking if this is a good time to invest. In my opinion, no. Short term trading is one thing, risk is defined by near by levels and the position can be exited for relatively smaller losses. Investing implies holding which opens you to a ton of risk and uncertainty. Why buy highs? ALL markets correct, why not wait? It is amazing how blind greed proliferates. In summary, the kind of price action that is occurring in this market is very unusual. And for me is a red flag. There are a number of factors that can come together and change things quickly: the futures which will open this market to institutions and a more balanced ability to short, and the Tether situation. I do not mind buying into a strong market, even with these potential threats, but IF I am going to take a swing trade long, I prefer to do so on my terms which means it has to be according to my plan. If the market will not meet my criteria, then I stay flat. I developed this plan to keep me out of trouble and to help me recognize when conditions are more favorable in terms of reward/risk. It is not meant to get me into every movement, instead it is a form of protection against impulse, opinion and emotion. Comments and questions welcome. (Also quick note: It has been brought to my attention that my reports are not appearing where they should be and as a result, my viewership is seriously low. TV does not seem to be responsive to the situation,so I am wondering if I can get further feedback from the community. I am trying to figure out, is it my subject matter? Feedback would be much appreciated).
BITFINEX:BTCUSD
by MarcPMarkets
65
BTCUSD Perspective And Levels: 12K Around The Corner?BTCUSD update: This market is poised to push 12k after consolidating for about a half day, as the bullish momentum continues. Price is still within a potential reversal zone, but NOT enough of a reason to short. In my previous report, I wrote about the built in long bias coupled with the freedom from institutions. No one knows what is going to happen when the futures start trading, even the experts who set up new futures contracts have no idea. The sentiment of the crowd appears to view institutional involvement as a whole new wave of large buyers that will drive the market dramatically higher, but do not realize institutions trade in more complex ways. I believe this new level of complexity will facilitate a more balanced market which is not the most beneficial for short term retail traders. Before I get into the TA, think about this for a moment: A fund manager has a responsibility to his investors and wants to show a positive return, BUT that is not the only way fund managers get paid. They also charge management fees which are not performance based, but instead are incentivized by how much capital is under management. Wealthy investors invest more into instruments that are stable, and that show a consistent return over time. They invest less in wildly fluctuating markets like this. Futures and options can be used to create more stable performance which will attract more capital, which results in higher management fees. My point is this: This market will become a thick slow grind market, similar to the S&P 500 or EURUSD. It will offer opportunity as always, it just won't be as generous and easy as it is now. As of now, price is sitting in the middle of the reversal zone and still no signs of weakness which means both long and shorts are high risk at these levels. In terms of risk/reward, shorts would make more sense, BUT with no signal and no confirmation, there is no evidence based reason to be short. What to look for is reversal candles or patterns around or just under the 12k level, or a break below 10722 which is the .382 of the recent bullish swing. Until a bearish pattern appears, and until supports break, this market can continue higher. How high? If it breaks beyond the 12100, the next target extension is 12400 which is measured from the 7871 low. This is based on the structure that is in place at the moment. In summary, as short term traders, the BEST we can do is embrace what the market is telling us, whether we personally agree with it or not. I believe this market is in a bubble and will correct harshly once the fake tether situation unwinds, but that is an opinion that the market could care less about. I do not act on my opinions, I act on technical facts. Sure I want to be long as it goes higher, but I am not willing to take the risk at these levels. Even retraces are tough because they are so shallow relative to how far a fast this market has come along. So when I face so much conflict, I stay flat until the market presents an opportunity that is in line with my trading plan. It is my plan that keeps me out of trouble, and minimizes any impulse stimulated by these fast moving prices. When you are in this business for a long time, you learn that capital preservation is actually more important than capital gain. This is why I seek consistency rather than lottery tickets. If you cannot trade with any consistency, in time the profit you have now will be donated back to the market. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
27
ETHUSD Perspective And Levels: Triangle Before The 500 Run?ETHUSD update: As BTC makes history breaking 10K, this market is consolidating, it is just a matter of time before this makes the run for 500 based on the current price structure. So I am now long at 468.72. Stop 454. Target 499. RR: 2 to 1 (50% position size). These markets are great because they do not seriously correct anymore ( hehe, YET). When they do, it is most likely going to be extreme, and many will jump in too early and get caught. I do not plan to be part of that mess. Until that happens, we can either play close to the vest and be quick to get out if the market happens to turn and be prepared for a small loss, or just avoid these markets completely. Investing for the long term at these levels is a very risky proposition. With that being said, it appears that there is not much of a relationship between these markets except for which ones investors pile into next. They take turns. And the whole idea of short term trading is to capitalize on these movements while keeping risk under control. While BTC is in the spot light, this market has been ranging between 446 and 491. The mid 450s have also been a supportive area as well. Consolidations like this are trend continuation patterns and there is no question the trend is bullish. Some may wonder, isn't this going long near the top? No. This is a consolidation that is within a clear bullish trend, and offers clear reward/risk. If the entire market falls apart while I am long, well, that is the risk that I take, but that is why I have a stop at 454. This trade is aggressive in the sense that this market is not at a projected support, but there is a triple bottom reversal formation on a 1 hour chart off the 458 level. The trade set up isn't perfect, but the context is clear, so I adjust by taking a smaller position. I am not changing my plan, I am just being more flexible and believe the environment is supportive enough for the moment. I also believe that 14 points of risk, defined by a clear structure is reasonable for these conditions and within the rules of MY plan. I will do my best to update this position as it unfolds, BUT keep in mind I do not watch these markets tick by tick. In summary, there is no precision in trading. It is a matter of having a plan and a set of guidelines that govern every decision while allowing for some flexibility. In taking a long at 468.72, I am buying in the middle of a range that is within a clear bullish context. To adjust for this aggressive play, I am entering with a smaller position (50% of usual size). I can always add the other half on a break out attempt. Consolidations such as this are continuation patterns, and I believe will follow through until the entire coin space corrects, and it will. BTC over 10K, ETC over 30? And some of the less popular coins all pushing steep new highs is a sign of a bubble in my book. It's okay to participate as long as you understand WHERE your risks are, and what to do when the carpet gets pulled. I am willing to take a chance on this market, within the conditions relevant to this the current environment. It is a short term play, anticipating an attempt to the psychological 500 level. Comments and questions welcome.
BITFINEX:ETHUSDLong
by MarcPMarkets
16
BTCUSD Perspective And Levels: 9959 And Trailing Stop.BTCUSD update: 9895 new high and poised for 10K. The music hasn't stopped yet, so if you are in, the best you can do is manage and be aware of any early selling signs. If you are out, now is not the time to get in. I do not want to sound repetitive, but this price action is very suspect. Runaway markets like this are rare, and unusual and will encourage bad habits among the inexperienced. What you are seeing in all of these markets is very bubble like and best for taking profits in my opinion. I have seen this before and it is just a matter of a surprise. Some "unexpected" news. If you want to hold because that is what has been working, then by all means hold, but you would be foolish not to lock in at least 25% at these levels. A few years ago, silver went from around 15 to 50 in a very short period of time. There was all this talk about a huge silver shortage and how one major bank was stuck in a large short position. The metals are relatively small markets, are limited resources like the coins, and they have to be mined. I figured silver would be at 100 at the rate it was moving. Know where it is today? 17. There may be different drivers and catalysts for the coins, but markets that go too far too fast play out the same. (Google Tulip Bulb Mania). I measured an extension from the 5114 low and projected from the 5400 low, and it revealed a 1.618 at 9959. This is a target and psychological resistance. I am not going to generate new support levels until this market decides to show signs of weakness. One level that I will be keeping an eye on is the 9450 level. Why 9450? It is the low of an inside bar on this 12 hour chart. A break below that, and that will be the first sign that momentum MAY be changing in this market. From there I will evaluate the relevant support levels. That is my only plan for this market at this point. One thing to consider if you do not know whether to hold or sell is use a manual trailing stop. Since this market is not really retracing, use the previous day's low as a reference point. Each day, as the market fails to retrace, you raise the stop to the higher low. Eventually, you will get stopped out, but the market will decide instead of you. This often allows for staying in a move longer because you take yourself out of the equation. The thing is IF the market gets noisy, it is possible to get stopped out and then watch the market go higher without you, but if you are walking away with a profit, there should be no complaints. This works well in trending markets that do not retrace (like what we are seeing now). In summary, ride it out until the music stops but do not be afraid to take profit. There seems to be this "entitlement bias" that is running rampant among newer investors. They believe they are entitled to sell the top and if they sell and take a profit, and the market runs up another 1k points, they get upset. That is greed and it is the same motivator that will seduce you into buying too early when this market decides to really sell. As far as swing trades go, I have no interest in taking any risk at all at these levels. I don't buy highs of asset bubbles. My plan at the moment is to wait for the next major support which is in the low 8ks and EVALUATE from there. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
41
BTCUSD Perspective And Levels: 10K Will Be Psychological?BTCUSD update: 9771 all time high reached and then retrace. Went higher than my 9600 target by 171 points (which is small relative to BTC) and is now showing some signs of minor selling. Will this market really correct this time? Or is it going straight to 10K? If there is going to be a corrective move of more significance, the low of the just closed candle will have to be taken out which is 9231. IF that happens, the first support I will be watching is the 9040 area which is the .382 support measured from the 7870 low. If that first support is taken out, the next level is the 8450 area which is the old resistance, and now a potential support upon any retest. Also the .382 of this entire swing measured from the 5400 low is now the 8100 area. The area between these two levels is where price consolidated before making these dramatic new highs. The combination of these factors would make this area ideal for a bullish reversal and second attempt to retest the high. Keep in mind IF the 9231 low is not taken out, then this market is not correcting yet. It will likely drift higher. The 10K level will be a psychological resistance and major event for this market. So be prepared. As far as new targets go, I measured the 1.0 extension from the 5400 low, and it shows 10,687 as the result. IF the market makes it to this level without any retrace, then it will be completing a zig zag formation that has some symmetry. Without getting too complicated, IF the market rejects the level quickly, this market could be on its way to forming the head of a very large head and shoulder formation. That would be a clear sign that a major retracement is coming. At the moment, this is all just a potential scenario based on the likeness of the current structure. Just something to be cognizant of IF the market chooses this scenario. When I first started trading, I worked in an office with 300 traders. When the market got quiet around lunch time, many of them would pull out chess boards and play chess. I thought it was just to avoid trading slow markets, but there was another reason they chose chess. It helped sharpen their skills of anticipation and flexibility. The same mindset that we need to actively trade financial markets. I am not a chess player BUT it serves as a great example as far as how to structure your thought process when facing trading decisions. In chess, you are running through all the possible moves (scenarios) that your opponent can make, and you ADJUST as the game progresses and anticipate new possibilities as you receive new information (an unexpected move by your opponent). Of course in chess you are trying to outsmart your opponent, in trading there is no outsmarting, only adjusting. The market will always have the upper hand. In order to navigate financial markets consistently you must have a well defined strategy and it begins with a thought process. Start by thinking chess. In summary, there are still no signs of weakness in this market. If selling is going to happen, the first signal will be the break of large time frame lows like 9231. Otherwise, the strength must be recognized and the possibility of reaching 10k is within reason. If you can't resist getting on board, at least be prepared if the music stops sooner than expected. These are unusual and rare conditions, which are great, but do not let the market fool you into thinking it is always going to be like this. That is when it sets you up to give it all back. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
20
BTCUSD Perspective And Levels: 10K? Game Of Musical Chairs.BTCUSD update: Hanging on all time highs of 9400 as I write this. The spot light has switched from ETH back to BTC. Are these markets going up forever? Not in a straight line. This price action is euphoric and is a great place to lock in profit, but not to initiate new positions, even in the face of a 10k possibility. I will explain why. It appears that the news that is driving this market is somewhat significant, like more governments adapting blockchain, etc, and that is great for the future of this technology in general. The problem is, as many newer traders do not realize, this rate of change is abnormal and unsustainable. The strength is clear and cannot be ignored, but my point is: do not get used to this. Stocks like Yahoo and AOL (when AOL was just AOL) also used to go up 100 points a day, and moved like that for about a year (back in 1999), and today they make headlines if they move 1 point. (I realize BTC is not a stock, but I am just illustrating a point). I make this point not to elicit more fear of missing out, but instead to provide a perspective to better manage expectations as this market matures and faces many changes like the upcoming futures contract, real institutional competition and regulation. The less experienced do not understand, institutional players have better information, much deeper pockets and can hire the best talent. They are smart money, and they are not entering this market to help the little guy. Be prepared for harder markets, especially on smaller time frames. One other point to keep in mind also is that a large number of U.S. investors are prevented from shorting these markets. Exchange platforms like GDAX (Coinbase) do not allow margin accounts for retail investors in the U.S. (I can't day trade this market short, even if I wanted to.) The futures market will not have such restrictions. That may help explain to some degree the imbalance in these markets as well. As of now, there are no signs of weakness. Higher highs, especially all time highs often signal further strength. I keep reading comments about people selling all their coins and feeling bad because the market is higher. Selling the top and buying the bottom are like hitting the lottery, low probability. Thinking that you are entitled to selling the top is like thinking you should win the lottery because you bought a ticket. As short term traders the goal is to achieve consistency in a way that is reasonable in terms of the risk we are willing to take. And repeat our process over and over. Not hit home runs. My next target on this market is the 9600 area. It comes from two 2.618 extensions that are almost overlapping between 9470 and 9575 so I will estimate it slightly higher. These extensions are measured from the 7871 and 6185 lows respectively. This is a great move if you are in. If you are not, then that's okay too. There is no need to get emotional. Even though I have a higher target projected and no weakness in sight, does not mean it can turn instantly without warning. That is why buying highs, especially in euphoric markets like this presents such a high risk. The market can keep going, but no one knows when it will turn. It is like a game of musical chairs (google it), if you are going to play, you better be quick to sit once the music stops. In summary, I am not buying highs. And even if I could short, I would not because I do not short strong markets. My plan forces me to wait for a sensible retrace which is elusive, but it will eventually present itself. 8825 is the closest support (.382 measured from the 7871 low). The next support after that is 7885 area which is the .382 measured from the 5400 low and a previous resistance. The best I can do is wait and see if price produces a reversal formation on a smaller time frame at one of these levels for a possible swing trade with risk that is sensible for MY plan. Otherwise I stay flat. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
46
ETHUSD Perspective And Levels: One More Leg To 500+?ETHUSD update: 483 all time high touched which is just one point higher than the 482 extension target while this market is now consolidating and attempting to break higher. The next target extension is 516 based on the current structure in place. Some people (critics) seem to think I am making up these target numbers. Just to be clear, these extension numbers are based on a proportion of the current price structure. There is no guarantee that the price will stop and reverse at these levels, but there is a greater chance. These proportions tend to act as natural inflection points that the market "herd" is more likely to react to. Whether it is self fulfilling prophecy or not, these proportions are very relevant in these highly emotional markets. So for the critics: I am not making them up, the market is. That is where the new 516 target comes from. It is the 1.618 extension projected from the 395 low. Will this market actually get there in the next day or so? I am skeptical because 500 is a psychological level that can act as a barrier, but anything is possible. Since the 355 breakout, this market has been in the first leg of a large scale Wave 3. These waves are often powerful and to fit the rule, cannot be the shortest wave within the 5 wave sequence. You can see this more clearly on the weekly time frame. Once this initial leg is complete, Wave 2 should be a relatively larger retrace than this market has been showing since the break out. As long as price stays above the bottom of Wave 1 which is 280, then it will be setting up for a 3 of 3 which can take this market much higher over the next couple of months. The retrace can take a week or so to play out, not a couple of hours or days. The most relevant level is around the 408 area which happens to be the .382 of this entire bullish structure. Again it is important to be prepared for anything. IF for any reason this market goes below 280, then this wave count will be negated. I realize that almost sounds laughable at this point, I am just saying don't neglect that scenario completely. As far as WHEN this market will retrace and offer a buying opportunity, there is no way to forecast that. At the moment, there are no signs of weakness. Price consolidates for a half a day and then continues to new highs which is what it is poised to do at the moment. Moves like this are rare and are like lottery tickets, but rates of change this rapid are extreme and not sustainable. Normalcy will return, it always does, in every market. I will not buy highs. I have been saying that since 371 and here we are 100 points higher. I have seen moves like this before in other markets so I know how they play out. My plan is simple: Watch for a retrace, a reversal and go long at an attractive reward/risk. Based on the new high, I am watching the 450 support (.382 measured from 395), the 433 support (.382 measured from 350) and 408 (.382 measured from 286). The consolidation at the moment is setting up to continue higher rather than to any of these supports, so a break beyond 476 can also offer a day trade opportunity if you are willing to accept the risk. Keep in mind the bottom of the range is 454 which means you are looking at a max of around 20 points of risk to hopefully make 25 or more in a very short period of time. It's possible to figure out a tighter stop, but that is up to you. I am not day trading these markets and NOT willing to take the risk. In summary, relentlessly strong markets like this are tough to trade because you don't know where it will turn. For the less experienced who do not know, these kind of movements are not common and if you are in that's great. My point is this: do not let your expectations get warped by a low probability condition. If you do, you will most likely have blatant disregard for risk the next time something like this appears to be happening, and you will give your profits back in the much more numerous fake outs. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
20
ETHUSD Perspective And Levels: Next Stop 482 Extension?ETHUSD update: All time high made at the 458.96 level (Bitfinex) while the 437 extension was blown through as bullish momentum continues. Based on current market structure, 482 is the next target. And you wonder, when is the best time to buy? In my previous report I listed levels that I was looking for in order for a possible long. Were any of them reached? The best the market could offer was 400, which was 8 points higher than my closest support which was 392. If YOU were watching closely, there was a double bottom on a 30 minute chart that offered an attractive entry. The second low of that formation occurred at 1 AM EST. I am actually sleeping at that time so I could not update my report in order to let everyone know it was a good time to get in. And this is why I provide perspective and not a signal service. Since the double bottom occurred at 400, the 392 support could have been used as a good reference point for a stop with 437 as the target. (I wrote about 437 in my previous report). So you had enough information to assess reward/risk along with a formation. I am writing this to make the less experienced aware that they key to using my analysis is NOT waiting for trade calls, but instead to learn how to think on your own. My analysis provides perspective and levels as the title describes. I keep reading comments about how I don't take any trades. Taking the trades is up to YOU because a trade requires an assessment of risk which is different for everyone. Please understand as an author, I have a greater responsibility to the community. If I say "buy", a lot of people will buy, and if they lose, I feel partly responsible so my trade calls have to be extremely well selected in order for the risk to be at a level that I feel is low enough for the majority of less experienced traders to take. And after all that, the trade may still not work out, but at least I made every effort to select one that the risk was reasonable in terms of the conditions at the time. So my message: Do not depend on anyone's trade call, take initiative, assess the risk and take responsibility for your own decisions. If you say, "but I am new, and that is why I am on here, looking for trade calls.", then you will not be successful in the long run if your plan is to blindly follow others. On to analysis! Based on the current structure, 433 (.382 measured from 392 low) is the nearest support which is very shallow and has a better chance of breaking, but since this market is so strong, it may be a level to consider upon a retest. A more reasonable and likely support is the 417 area which is now the .382 support measured from the 350 low. A retrace into this area, followed by a reversal formation would offer attractive reward/risk since the low 400's can be used as a reference for a stop. And if price retraces further, then the 392 support is the next level I would consider since it is the .382 of the bullish structure measured from the 286 low. The next target is 482 and is a 2.618 extension projected from the 348 low. Also depending on how far this market retraces, the 461 area can be used as a target as well. With these levels, you have enough information to assemble a swing trade IF the market presents the opportunity (like it had at the 400 level). In summary, there is probably news out there that is driving this market higher. I do not need to know what it is in order to trade on the short term. The strength is clear, but don't forget, these markets are highly irrational, and often manipulated in ways that are different from traditional markets. There is no reason to be emotional, or feel bad for missing the relentless rally. The great thing about any financial market is opportunity is an unlimited resource because "history repeats itself" (which is a basic tenet of TA). Be flexible, watch for reversals, and most importantly understand your risk. Highs are better to take profit, not initiate positions. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
44
ETHUSD Perspective And Levels: How Much Higher?ETHUSD update: All time high of 418 reached and not too far from the 437 extension. Since the break beyond the 355 range resistance, this market has been making significant progress as far as attempting to clear the big picture range. Why 437? I will explain. In my previous report, I wrote about the 371 target, and what this market had to do in order to reach the 392 level and beyond. The problem is this market refuses to retrace to a more attractive support level for a swing trade long based on MY strategy. Before this new high, I wrote about a retest of the 335 level, but the market chose 350 instead. Keep in mind I cannot monitor these markets and update my reports 24 hours a day (as some people on here seem to expect hehe). I constantly explain the ability to be flexible and nimble is required to navigate these markets, especially on smaller time frames. If you cannot figure out how to spot a higher low on your own, then you should not be trading real money. The purpose behind my analysis is to provide a perspective, or a context to help you make better decisions, NOT to make decisions for you. As of now, this market is sitting on the highs. What is reasonable to expect from here? MY plan is to wait for a retrace and attempt to buy for a swing trade long. AGAIN, if my levels are not reached, then I can't force a trade. You must decide if the risk makes sense for you and your plan IF the market ONLY offers a shallow retrace like it has been doing since the 330 breakout. I write these reports based on the risk that is appropriate for MY plan, just to be clear (I understand the majority of the community understands this, I just have to write this for the limited few who don't). Here are the levels I am waiting for: 392 which is the previous peak (old resistance, new support), 384 which is the .382 support measured from the 350 low and IF this market retraces further than that, then I will be watching the 370 to 360 support zone which is the .618 area relevant to the 350 low also. If I can manage to get long, I will be looking for this market to make a run for the 437 target (1.618 extensions measured from the 350 low). These proportions are based on market structure and is why they offer somewhat reliable estimates. At the rate this market is moving, it may NOT retest the projected supports any time soon. My plan forces me not to buy highs and wait for supports. If it retraces to a more shallow level, and the risk is within your plan, then you have to make the adjustment. I will do my best to report any adjustments to the levels that I see. One other observation about the current situation is this: I can count 5 waves starting at the 286 low. 5 waves on top of price pushing through a 1.618 extension (406) in a vertical line is often a recipe for a retrace. Just another reason not to buy these highs, and instead lock in some profit if you have been holding from much lower prices. TO BE CLEAR, I am waiting for a retrace that may not happen, I am NOT calling for a major correction. This market is likely in a large scale Wave 3 which is very bullish. In summary, this market is making significant progress as far as breaking out of the large consolidation it has been gyrating within for weeks. All time highs signal more strength to come, but also present higher risk of retrace. I am waiting for the retrace, because that is what MY plan calls for. I do my best to share observations and levels that are useful, but if you do not have a well defined strategy and process of evaluating risk, then no analysis will help you. If you cannot make decisions and accept responsibility, then you should not trade. Either find a signal service, or pay a trader to trade for you, that is my suggestion. Comments and questions welcome. (The community has been doing an excellent job of answering many questions for me. I try go through them and answer as many as I can. If you can't wait, then please PM me).
BITFINEX:ETHUSD
by MarcPMarkets
29
BTCUSD Perspective And Levels: Consolidation Nation.BTCUSD update: This market is consolidating within a 300 point range, still within the reversal zone but the longer it stays at these levels, the greater the chance of another bullish breakout. What about the head and shoulders on the 4 hour chart? There is a head and shoulders formation that should not be ignored, but you have to consider the bigger picture. Price is consolidating near the highs and more importantly, NOT taking out any lows. Even on these wild 300 to 500 point gyrations, this market is still holding up well considering where it is. The head and shoulders is meaningful, but IF this market does not decisively break below 8k and paint a closed candle on its lows, then it is likely to break higher. Once again a condition like this is conflicting and confusing, but the overall trend carries more weight and is still in play until the market proves otherwise. Day trading is your best strategy in my opinion to capitalize on the minor weakness, while waiting to see if the market takes out any significant lows. 8K is not only an old resistance/new support but it is also the .382 support measured from the 7412 low. If this support is not taken out soon, the market is telling us that it is strong, even in the face of a head and shoulders. Keep in mind that consolidations are trend continuation patterns, not reversals. Price may still be in the reversal zone, but that does not mean it will produce a bearish reversal. On top of that, it is a holiday in the U.S. which is very likely to affect volume and make for a range bound market. Over the next two and a half days, U.S. participants will be focused on everything but the markets. That is why the stock market closes early and forex brokers widen their spreads. Obviously this holiday is not celebrated around the world, but U.S. volume is a big factor in these markets.Over the years I learned it is best to avoid trading all together during this time. Just something to keep in mind. In summary if this market is going to be a short, let it make the first move. This means it is okay to miss the initial move which has to break the relevant supports, then look to get in on a shallow retrace (day trading especially). When markets are weak, they reject resistance levels FAST and do not retrace right back to highs in a matter of hours. That is why I am more convinced that this is a consolidation and setting up to make a run for the 8500 resistance level over the next few days (low volume doesn't mean the market won't move at all, it means the movements have a greater tendency to be more random). Do not be confused by the head and shoulders because the general trend is still intact which means at the moment, this market is likely to go higher. These conditions do not fit the criteria of my swing trading plan at all, so I will continue to stay flat. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
34
BTCUSD Perspective And Levels: Still In Reversal Zone.BTCUSD update: Gyration leads to all time highs once again. As this market is pushing higher, it is still within the reversal zone. The swift pullback from 8315 to 7760 in a matter of hours is a reminder of how thin the market is at these levels and how high the risk of retrace is. I will explain. Thin markets are markets that move. Thin refers to the lack of volume that often gets in the way and makes a market sluggish. Thin markets can be good when they are in your favor, but not so good when you need to get out. The 550 point gyration shows how fast things can change in this market.This type of noise can fake out many traders both long and short, that is why it is so important to have a agile mindset and be prepared for anything. Whatever the reason behind that move was, the market shrugged it off and now making new highs, but it is not out of the clear. The chances of a bearish reversal are high in this zone. Which means if you are long, take the profit while you can, and if you are looking to get short, it is in a convenient spot but the structure just isn't there yet. In my previous report I wrote about waiting for a bearish reversal structure like a double top or lower high on a larger time frame. At the moment, even though this market is on a new high, it is in the convenient position to present a reversal. The trigger is the break of the 8050 low. Why 8050? It is the low of an inside bar on this time frame. The low of the current candle (8187 once it is closed) will also serve as a short trigger. In order for these levels to be valid, price needs to decline off the current high, quickly and paint an upper wick. If none of this bearish price action that I am describing occurs, then it is NOT a short, especially if the 8500 level is taken out. What I just described is an example of what a short looks like on a day trade time frame. As you can see, this market can move hundreds of points within a couple of hours and then reverse again. That is why I strongly emphasize day trading strategies if you have the skill and plan. The most important part of this is having expectations that are in line with your strategy. If you think you are going to open a day trade short and make 1k points, your expectations are out of line and that will most likely lead to a tendency to hold when you should not be. This is why I always stress not to mix strategies, especially if you are newer. It leads to taking risks that are unjustified for the smaller time frame trades. Also during times like this, the news feeds, blogs and other outlets will be capitalizing on this event to gain attention and drive traffic to their sites. They will say all kinds of outrageous things like "10K Just Around the Corner!!!", you must not be seduced by this. Whether you follow the news or not, everything you need to know about where the market is likely to go is on your chart. It is a matter of recognizing patterns, understanding proportions and interpreting candles.You are better off consuming how to analyze, than consuming well executed marketing strategies. In summary, the basic formation of a trend is currently in place. You have a series of higher lows and and higher highs, which makes it reasonable to expect higher prices until a clear change takes place (like a reversal). In terms of proportion and structure, this market is in a position to change, or fail, but it has not shown its hand, YET. Keep in mind, a normal retrace can take this market back to the mid 7100s (.382 of current bullish structure) and as a swing trader, THAT is the level that I am most interested in buying into (if the criteria of my plan lines up there). The market is not forcing you to take risk, and you do not always have to be in a position to be in a "trade". When the risk is unattractive on both sides of the market, you can always stay out. Like they say, "Flat is a position" and I am staying flat. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
41
BTCUSD Perspective And Levels: Runaway Train?BTCUSD update: New all time highs as I write this, right into the 8250 target area. The next level to watch for is 8500 which is the top boundary of the reversal zone. Yesterday I updated my previous BTC report, pointing out that price was in the process of breaking out of the bull flag formation and on its way to 8k. This price action is very clear and very strong. If you are long from lower prices, this target area is a good place to lock in some profit. Keep in mind when I write that, I DO NOT mean sell your whole position. Taking some profit at highs is a good habit because it reduces risk and you are selling while you can, and NOT when you have to. Give some of it to the buyers while they are buying. Remember, the higher it goes, the risk of retrace increases that is why you do not want to buy highs, you want to sell them. This does NOT mean this market is a short either. After the .618 resistance area was cleared without any bearish structure in sight, I have been warning about shorts. There is no structure on the larger time frames or breaks of any minor support levels. Even though the risk of retrace is high that is not enough to justify a short. There are market conditions where the risk is unattractive for both longs and shorts and this market is in that situation now. If you want to participate in this action, the only way to keep risk within reason is to day trade. I write this over and over. The bearish structure will appear on a 15 minute chart, and a reasonable stop is 30 to 50 points on such a short time horizon. So is your profit target. If you risk 30 points and you are up 50 points in a matter of an hour, you take the profit, not try to hold it for a home run. That is why I also repeat, IF you do not have a solid day trading plan and you do not know how to define stops and targets on small time frames, then do not trade this market at all. It is too fast and requires an agile mindset. What is the reversal zone? I have been referring to this as the "fakeout zone" in previous reports. It is an extension that is measured from a range high or low. In this case, a measurement from the 5400 low puts the reversal zone boundary at 8500. On top of that, price has reached the 8250 target area which is a 1.618 extension projected from the 6300 low. Add to that, the bullish structure that has lead to this high is a clear impulse wave with 5 distinct legs. Together all this means price is in a convenient area to present a bearish reversal pattern or structure. This is why I say take profits, but do not short until the larger time frame structure is present (a double top, lower high, pin bar). Another thing to consider, shorting the high in an attempt to get in at the top is the same as buying a market when it is making new lows in an attempt to catch the bottom. It is a losing proposition because the one time that you are right does not cover the losses for the other 5 times you were wrong. If this market is going to retrace, it will begin with the initial wave, followed by the failed high or lower high. The retest and failure is the best time to short, so as long as the market keeps pushing highs, shorts should not be taken on larger time frames. In summary, this market is making all time highs which is not that surprising considering the recent bullish structure. While the world will be celebrating this event, keep in mind price is within the reversal zone (below 8500) and is a very risky buy or sell at the moment. Since I do not short these markets, my only choice is to buy, and the level I am most interested is the 7180 area (.382 of bullish structure). A bullish reversal on a smaller time frame is likely to offer attractive reward/risk for a swing trade at that level while the market likely aims to retest the high once more. Overall, do not worry about missing out on longs or shorts, the opportunities will materialize, just wait, recognize and repeat. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
82
ETHUSD Perspective And Levels: Breakout Or Fakeout? The Sequel.ETHUSD update: After breaking the 355 resistance zone high, price touches the 371 target before running out of steam. Is this market poised to break through the 400 level? The signs are not there. YET. In my previous report, I wrote about the minor range breakout, the minor resistance within the larger resistance zone, and a potential retrace back to the 315 area.(It went to 320 instead). I also explained the 371 extension which price has now touched. Why is this market not going to the moon? Here's why: Price has finally broken beyond resistance levels that have been in place for weeks now. That is certainly a bullish sign, but it has stopped within the fakeout zone which is capped by the 374 level (this zone is an extension measured from the 275 low). And touched the 271 extension (1.618 projected from the 286 low) and just stopped, forming an inside bar at the moment on this time frame. If the momentum was still present, it would keep going or at least close out on the highs of the candles. Based on this price action, I am anticipating a minor retrace back to the 335 area (.382 of current bullish swing). That is also an old resistance which should now act as a new support (inversion). IF this market can produce a higher low in this area, the next leg up could be the 395 historical peak (it will have to break through the 371 high and close strong). IF this market can break beyond 395, then the 406 extension is the next target (1.618 measured from the 321 low). Based on the way price is moving now, it is reasonable for this target to be reached within a week if structure remains bullish (remember things change fast). The current candle has less than 8 hours to close. If it closes within the range of the previous candle and then breaks the high (currently 364), then bullish momentum is likely to continue. If instead it breaks the low (currently 350), then it is more likely to retest the 335 support. I am interested in a swing trade long IF the market can find support and a bullish reversal on a smaller time frame at that level. In summary, this market is now showing significant signs of buying after breaking above the long time 355 resistance level. If price can maintain the bullish structure by presenting a higher low somewhere above 335, it is then more likely to retest the 392 level and beyond which makes it worthwhile for a swing trade strategy. I will be watching the 335 to 340 area for a bullish reversal either on a smaller time frame, or a candle on the larger time frames and evaluate risk from there. I will also be watching for a reestablishment of a rangebound market until a significant catalyst can come along and really drive price. In case of a range I will be looking for trades in the lower support area of 300, and 275 if this market decides to retest those levels (which does not look likely at the moment, but it is a good idea to be prepared). It is more important to be flexible and manage risk than anything else in this game. I report what the market is saying, not what I think or what anyone else says or writes. Forecasting is about analyzing clues and projecting scenarios that MAY or MAY NOT happen, and as the market unfolds you adjust based on the NEW information as it becomes available. That is what short term speculation is all about. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
41
BTCUSD Perspective And Levels: Signs Of Strength For Now.BTCUSD update: Price is pulling back in a very shallow consolidation which is now presenting a bull flag formation. This price action is not characteristic of a weak market or a bearish C Wave. If anything price is poised to retest 8k and possibly higher. Weak markets do not consolidate near highs, and do not unfold in bullish formations on larger time frames. This market is not weak, yet. I have been writing about the tricky B Wave, which typically unfolds in 3 legs. The current structure appears to be in a minor Wave 4 and setting up for a new high attempt. That is not characteristic of a B Wave which means the market has negated that scenario. It hasn't even compromised the 7350 minor trend support (.382 of recent bullish swing) and is no where near the 7k support that I was using as a reference to confirm a C Wave was in play. Weak markets reject levels and sell fast, and often originate from a failed high or double top and this market is not showing any of those structures at the moment. The fact that the 7350 and 7k supports are still intact is another bullish sign. Until those levels break, this market is a high risk, low probability short. (In other words a pure gamble). Based on this time frame, a break of 7800 will also signal buying and possibly the start of the next leg that can go as high as the mid 8ks. Projecting an extension from the 6300 low shows a 1.618 at 8381 which is just under the 8468 level which is the upper boundary of the fakeout zone that I wrote about in my previous report. (It is a projection measured from the 5400 low). This type of price action is ideal for day trading in my opinion because you don't have to take the large time frame risk, while capitalizing on generous moves. The reason why a swing trade is less attractive is because it is not worth the risk at these levels. I have to risk around 400+ points to possibly make 300 or slightly more? Day trading stops are more like 50 to 100 points while you can capture 150+. Makes much more sense. In summary, this market still continues to show signs of strength. A shallow retrace, bull flag, untested minor supports, all point to a better chance of higher prices. How much higher? Based on proportions mid 8500s is reasonable at this point. There are many different forces at play in a market like this and little to no regulation. There are pros and cons to every situation. The strength may not make sense in terms of logic, or this market may be propped up by the BTC community through their technical advantages, or maybe it is full of fake Tether as some have suggested. The reasons don't matter if you are a short term speculator. Price action is showing signs of strength, so embrace it or avoid it, no one is forcing you to participate. For my swing trade plan, the risk is unjustified so I will stay flat. If this market is going to sell off hard, it needs a surprise (like an exchange going out of business) because at the moment, there is very little price action to support a bearish argument. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
43
BTCUSD Perspective And Levels: Hope Short Refers To Your Height.BTCUSD update: Price has pushed to 8020 without any bearish hesitation on the larger time frames in the 6950 to 7350 resistance zone. What happened to the C Wave that I have been writing about? If you look at my previous BTC report, I specifically explained that B Waves are TRICKY. I also explained that price had to break back below the 6500 area in order to confirm that a C wave was in play, otherwise the market is likely going higher. The current price structure may still be a B Wave, but the factors that support that argument are much fewer in number. The bearish factors that can lead to a C Wave are the potential double top (8040 is not much higher than 7899). And also the failed breakout zone which price can actually go as high as 8500 and sell off hard from there. Why 8500? The range between 7899 and 8500 is an extension zone that is proportionate relative to the 5400 low. When failed breakouts occur, they are more likely to occur within this zone. If price pushes beyond 8500, then that is a sign of strength and signals higher prices to come. There are NO bearish reversal structures or support breaks to justify shorts at the MOMENT. The 7k level is the trend support (.382 of bullish structure from 5400 low.) There are NO bearish reversal candles or larger time frame triggers that signal selling. At the moment there is a mini consolidation that is unfolding which usually leads to higher prices since these are trend continuation patterns. As far as the C Wave, price must break below 7k in order to prove that a selling wave is in progress. Shorting before this happens (IF it happens) especially without any larger time frame structure is a low probability trade. An example of structure is the recent double top formation that occurred at the 7899 high (a week and a half ago). I do not consider this new high part of a triple top until there is proof of a reversal. Again there is nothing. Also something to keep in mind, markets that are weak test resistance and often reject it quickly. If the current situation was a triple top, price should be rejecting the 7900 level and instead it is consolidating on it. That is not a sign of coming weakness. I keep emphasizing that being flexible is key in fast markets like this. On the short time horizon, there is no time for opinions. Is it possible that the BTC minors and developer community are using their pull to manipulate this market? Sure, so even more reason to be flexible and recognize what the market is doing NOW and if there are any signs that it wants to reverse. Steve Spencer (The S of SMB Capital), my former boss and world class trader still says, "Be in the present, be flexible". This is an absolute must for short term speculation. In summary, this market is consolidating at a potential peak which can be taken as a sign of strength. Is it risky to get long if it breaks higher? Absolutely, especially on larger time horizon strategies like swing trading. "This market is always risky" you say, but it is riskier at the moment because it is flirting with all time highs, not a higher low which is where the reward/risk is favorable for swing trades. Wave counts work until they don't, just like everything else in TA. Our job as price action traders is to uncover the clues available now and adjust to changes as the market evolves. Listening to the market is an essential skill for short term trading, while imposing your own ideas upon it will give you a completely random result, but our own natural bias enjoys thinking we were "right". Good trades come from good plans, and flexible mindsets. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
31
ETHUSD Perspective And Levels: Strength Returning?ETHUSD update: Price structure is showing signs of continued strength with a higher low and breakout of a smaller range between the 275 and 310 area. It still has to get through a wide resistance zone that has been holding this market back for over a month. Based on the new bullish structure, 372 is a realistic short term target. I have not been writing about this market because it has been uneventful in terms of signals or opportunities defined by MY swing trade plan. The most recent price action now offers structure that suggests this market is setting up for a broader break out. In my previous report, I described the range between 275 and 310, but that was just a minor range within a very large weekly range. The large overhead resistance zone that has been established for over a month is the 320 to 355 area (.618 of bearish structure off the 395 high). Within that zone there is a minor resistance between the 323 and 338 levels (.618 of the recent bearish swing off of the 335 high) which price is gyrating within at the moment. Even though these resistance zones are in play, what makes this price action compelling is that fact that price is now coming from a base of strength. There is a higher low established at 286 level and a higher high at 339 which is the resistance zone high. (These zones have been on my charts weeks in advance, and they are still in play, special note for those who do not believe in the merit of TA). This higher low structure also allows for new support levels to be anticipated which are the 315 level (.382 of structure), 312 (old resistance/new support) and the 300 to 288 area which is relative to the .618 of the bullish structure. When you project price extensions from the higher low, the 372 target is the 1.618 extension which makes it the potential short term target if this market has enough momentum to break out beyond the 355 level. What is my plan? Previously I wrote about waiting for a retest of the 270 range support, but in light of the new bullish structure, I am now looking for a retest of the 315 level for a swing trade long. The 315 level offers slightly overlapping support and better reward/risk according to MY plan. So I will wait to see IF the market retests that level and look for some kind of bullish reversal, whether it is a smaller time frame chart pattern or larger time frame candle stick. In summary, this market has finally developed some price structure worth writing about. The higher low and minor range breakout are bullish signs that can be the beginning of a much larger breakout that can take price beyond the 355 level. Based on proportions, the first target at the 372 level would be a good place to lock in some profit and reduce risk if you are currently long. Remember anything is possible in these markets and if this price decides to retest the 280s again, I would be interested in buying there also. On the weekly chart, this market IS still range bound so make sure to keep expectations within that context. I do believe in the long term (months) the big picture consolidation will break out and this market will see much higher prices, but it is not in a hurry at the moment, and you shouldn't be either. Comments and questions welcome.
BITFINEX:ETHUSD
by MarcPMarkets
11
BTCUSD Perspective And Levels: B Wave And Resistance Zone.BTCUSD update: Price is retesting the 6950 to 7350 resistance zone (.618 of recent bearish swing) which is the 3rd leg of Wave B. This is where it gets tricky. Will it retrace lower or keep going? In my previous report I wrote that I was anticipating this upswing because this is a typical zig zag formation that is characteristic of Wave B counter corrections. I also wrote that it was an attractive day trading opportunity and I hope traders managed to get in on the move. Why is this tricky now? Isn't it going to 8k? I always say anything is possible, BUT price is right in the middle of the .618 resistance zone that is a typical area for corrective waves like this to complete. Price is more likely to turn lower from here and begin the C Wave which can take this make back to the high 4ks. For those looking for shorts, this is the area to begin evaluating for weakness. There is none at the moment. On top of that, the 6950 area is an old support (previous Wave iv) which is likely to act as a new resistance. Another reason to lock in profit and reduce risk if you got long in the 6500 area yesterday. What if price just keeps going up? It is less likely, but it can happen. Another scenario is Wave C may not unfold and the market may only produce a shallow retrace before attempting to retest the 8k high. The bearish confirmation that I am looking for to signal that the C Wave is in play is a break of the 6550 level which is now the .382 of the recent bullish swing. A break and decisive close below that level will mean price is probably on its way to retest the lower levels described earlier. If price instead produces a higher low above the 6550 area, then it is signaling further strength. This has happened a couple of times in this market recently so you must be on the look out and you must not carry any opinions. Recognizing and adjusting are the key skills, especially in a fast market, NOT the intellectual pursuit of fundamentals. This mindset is specific to these type of markets and short time frame trading NOT long term investing. So what's my plan now? I am not buying these highs, especially in the middle of a resistance zone. I am not buying any pullback UNLESS price action proves itself by showing solid bullish formations above the 6550 level. I will evaluate that IF the market offers the opportunity. Otherwise I am flat. In summary, moving 500+ points a day is great and full of opportunity on smaller time frames. I will tell you from experience, don't get use to this. Once the CME gets involved and regulators start regulating, I would not expect this market to move as generously as this. I saw it happen in the stock market, futures, and forex markets. There will always be opportunity, but there are times when it is extremely generous and now is one of those times. I can't repeat this enough: be quick, and do not get caught with an opinion. If price action is saying "turn" just turn, don't fight it. If it is saying "higher" don't fight that either. It is all about how to "listen" to what the market is saying. That is the skill we are always refining as short term traders and active investors. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
84
BTCUSD Perspective And Levels: The Fast And The Flexible.BTCUSD update: This market moves fast. The anticipated retrace is in play as price has taken out the 6469 level signaling bullish momentum. 6950 to 7350 is the resistance zone to watch for the next bearish reversal. As written about in my previous report, the 6950 to 7350 area is the .618 of the recent bearish swing. Often, when a Wave B unfolds, it happens in 3 legs (typical corrective wave). This means from here, price can retrace or consolidate slightly before making another decisive move higher into that resistance zone. If the formation resembles a zig zag going into the 6950 area, I would be anticipating a bearish reversal and the beginning of Wave C. Waves C's are the emotional wave, they are often fast and ugly. IF the market decides to follow the scenario that I am anticipating here, then it may retest the high 4ks from this point. As the Wave B is unfolding, it is possible for price to pullback to the 5870 to 5632 which is the minor .618 of the current move from the 5400 low. IF price retests this area and reverses, it can offer a chance to get in for the completion of Wave B into the 6950 area. That is around a 1k point move that can happen fast (a day or two). Keep in mind the 6950 level is only a possibility and there is no guarantee that price WILL retest the area. It may fail sooner. So here is what all this means: A pullback to the 5870 area may offer a buying opportunity to capitalize on an attempt to push toward the 6950 zone. If price reverses above the 5870 area, it would be a higher low formation which will strengthen the argument even more. For day trading this trade is simple because you can measure risk from smaller time frames and exit for 2:1 or 3:1 without much drama IF you are paying close attention. This can even qualify as a one or two day swing trade, BUT again you must be nimble because any sign of failure and the position must be exited. I do not anticipate this market going back up to 8k in this next bullish retrace. This market is FAST and there are A LOT of IF's. Flexibility is more important than anything else. If you cannot be flexible and recognize changes as they are unfolding, then avoid this market altogether until this corrective formation plays out. Since I am flexible, and this market is so generous with momentum, I am open to take a swing trade long IF price retraces back to the 5870 area and forms a reversal structure within that zone. If I can justify 2:1 or 3:1 based on that structure at that time, I will take the trade, but like I just wrote, the target will either be 6950 or below if price shows signs of turning earlier. I am doing my best to describe trading scenarios, but I cannot force you to understand the concepts of flexibility and change. If the market offers the scenario I just described I will do my best to show the actions that I take by updating this report. At the moment there is a clear relationship with BCH. If price goes lower in this market, BCH goes up and vice versa. From what I understand, BCH solves the scaling problems that BTC is facing. Now that BCH has the world's attention, there will continue to be a tug of war between these two markets which offers more opportunity for day traders in my opinion. Meanwhile the rest of the alts are going nowhere fast. Watch BCH for an inverse relationship. An example is if BTC retests 6950 and fails, in theory, that should be a buying opportunity in BCH. In summary, there is a great deal of momentum pushing this market as well as BCH. This means this is no time for opinions, and where TA will help you the most. If you can't be flexible, then the most you can do is hope things go your way which is NOT a strategy that I recommend. I am watching for the higher low and reversal in the 5870s for a possible long, BUT if it gets there without fulfilling my criteria, I will avoid the trade altogether. And if you are confused by all this, trade forex, its slower. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
28
LTCUSD Perspective And Levels: Breaking Out But To Where?LTCUSD update: Consolidation break out attempt at the 60 level. Compared to the other coins, this market takes much longer to make significant progress but is worth mentioning because a minor retrace can offer attractive reward/risk for a swing trade long. Also this breakout can be the beginning of a broader bullish movement. The 60 level has been the range high resistance for a number of weeks now and has finally been compromised. What makes this break out compelling is the higher low formation at 53.35 and the resistance break at 56. These are bullish formations that imply this breakout has a good chance of following through. This may also be the beginning of the breakout of a very large degree Wave 2 which this market has been stuck within for weeks. Potential near term targets for this move are 65.22 and the 72 area which are both extensions projected from the recent 49 low. Using the 53 level as a reference point to define risk, any minor retrace that stays above the 56 break out level offers attractive reward/risk for a swing trade long. The 58.35 level is a minor .382 measured from the 53 higher low offers a potential reference point for entry. Often on breaks outs like this retracements are shallow if this market is truly strong. My plan is to wait for a minor retrace to somewhere between the 58 and 60 level and look for a small time frame reversal. Using 53 as a reference point for a stop, if I get long at an average price of 58.50 let's say, and my first target is 65, I am risking 5.5 points to take some profit at around 7 points which give me a slightly higher than 1:1 reward risk. Compared to the immediate potential of the other coins, this market is not as exciting, BUT it has certainly been more stable and if this is a broader range break out, it has the potential to run to the low 70s which makes the trade idea much more worthwhile. This is also the type of coin that is an attractive long term hold (as long as some other coin doesn't come in and make it obsolete). So if I manage to get some on a small retrace in the high 50s, I do intend to keep some as part of a core position which has no near term target. (Multi year play). I do like the fundamental story behind this coin and I think it has merit for usability in the future (but I will get out immediately if something better comes out. Cannot get stuck on any opinions ESPECIALLY in these markets). In summary, this market is much quieter and more stable in terms of price action. Often there is not much to say, but today's move could be the initial break out and beginning of a much broader trend that can take price to at least the mid to upper 60s. It is worth mentioning because any shallow retrace will offer reward/risk that is attractive according to my plan. Remember IF it pulls back, there has to be some form of reversal pattern to justify entry on a smaller time frame. If price retraces further and fast and falls back below 56, then that will imply this move is a fake out, and I will reevaluate the entry. In the longer term I think this coin still offers a lot of potential and is certainly one that I want to accumulate if it begins working it's way higher on the big picture. Markets always retrace to some degree, so there is no reason to get overexcited and buy into the top of the breakout. Let the market come to you. Comments and questions welcome.
BITFINEX:LTCUSD
by MarcPMarkets
36
BTCUSD Perspective And Levels: Risky Business.BTCUSD Update: Nothing new on the new high front except for a new high of 7598. When markets trade like this, it is always a good idea to really zoom out to get a sense of proportion and risk. People ask me why is it that I won't go long if I am projecting targets at the 8k level? I realize when I answer, "Risk is too high" that is vague. So in this chart I will demonstrate what I mean. For those who are new to trading in general, the expectations that you have in terms of time frame are a big part of defining risk. Swing trading (days to weeks) generally presents a multitude of risks, with one being larger daily price ranges compared to day trading (minutes to hours) especially in nutty markets like this one. This is why I have been encouraging day trading and staying away from swing trades. When I say I am not taking any swing trades long, it is because of the potential of the pullback vs. the potential of continuing higher. The weekly time frame of this market paints a clear picture of this potential in terms of price proportions. Two price extension levels projected from the recent wave 2 and 4 swing lows point to 7901 and 8006 levels as the 2.618 and 1.618 proportions respectively. These are extensions measured on the weekly time frame and are overlapping near a common price point. Overlapping extensions on large time frames like the weekly usually offer a more reliable point of reference in terms of potential. In my previous report I had a smaller time frame extension in the lower 8k area as well. That is only about 4 to 500 points away which can be achieved in a matter of hours. (Great for day trading). This is a reasonable expectation of potential because it is based on price structure. Now let's consider the pull back potential. When I measure the entire rise in this BTC beginning in the 150s, I get a .382 support at 4776. That means it is reasonable for price to pull back to this level, and still be within a price structure that is bullish. This level also coincides with the old resistance of 4970 (Wave 3 high). Now keep in mind, this does not mean price WILL retrace this far, it means that IF it happens, it is perfectly normal and would offer a buying opportunity. (A move like this can take weeks to play out). So what does all this mean? In theory, if I got long now for a swing trade, and I want to set a reasonable stop based on big picture price structure, I am looking at 1500 points, vs a potential 500 point profit (1:3 reward/risk?). The situation that is driving this market is unusual and serves as an outlier. As a short term trader, I am looking for repetition so that I can determine reliable signals and achieve consistent results, not long shot one offs. If I wanted a long shot, I would play roulette. 1:3 reward/risk? That means if I short it, my reward/risk is 3:1! The bears are forgetting that this is not the only factor when it comes to measuring risk. There is also the probability of the trade going in your favor on this time frame. As I wrote about in my previous report, there is no structure in place at all that makes for a broader bearish argument. This conflict is also another good reason to either day trade or stay out. This environment presents a problem that day trading solves because you are not exposed to all this risk, but can still benefit from the lingering bullish momentum. In summary, when it comes to swing trading, being aware of the big picture is a helpful exercise that offers insight that is not available on small time frames. The example that I illustrated here is not a prediction, rather it is an idea of what is within reason based on price proportions. Price may not come close to retesting 4770 when the larger magnitude correction unfolds, but even if it pulls back half way, you are looking at the higher 5ks which is quite a ways from where price is now. If this doesn't paint a clear picture of risk, than I don't know what will. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
21
BTCUSD Perspective And Levels: No Signs Of Selling. Yet.BTCUSD Update: 7530 all time high is reached as this relentless rally continues. The question is what is how much higher can it go? One extension is taken out after another. The next price target based on an extension projected from the bottom of the most recent bullish structure is 8271 (the 2.618 extension). Yes it is hard to believe price can make it that high, but this market does not care what we believe. At the moment, there is not much on the chart that shows any signs of immediate weakness. Pull backs are shallow and no where near any major support levels. This is why I have been saying in order to trade this market and keep your risk low, it is important to stay focused on the smaller time frames where you can make adjustments quickly. There are opportunities both long and short if you have the plan and the agility. As far as shorts go, this market reminds me of the Dow futures back in 2007. At the time, the market was relentlessly strong and I felt that the strength was simply unjustified. So I was shorting it and getting hammered over and over. It was pushing 14k which were all time highs. Eventually the market sold off, that was some time in 2008. I was a little early. The lesson that I learned besides not to short a market pushing new highs is this: If you are going to short the bigger picture, at least wait for some form of structure like a double top on a large time frame like a 4 hour or above.This may require a ton of patience, but even if you are wrong, and the market still goes higher, your chances of a profitable outcome are much better. Shorting a market on new highs because you feel "how much higher can it go?" is a bad reason to be short. If you want to see a great example of a market that offered structure for bigger picture shorting? Look no further than the EURUSD on a 4 hour or larger time frame. Head and shoulders after head and shoulders. That is what a bigger picture short looks like. Now if you are day trading than you can get away shorting as long a you are taking your profits quickly. A shallow retrace for this market is 300 points, which offers plenty of opportunity for this type of strategy. As far as my plan for this market (since I am looking for longs only), I would like to see IF price can retrace back to 6567 which is now the .382 of the recent bullish swing. While a break of that level can take prices to the 5798 area which is the .382 of the broad bullish structure. IF the market retraces to either one of these levels, that is where I will look for bullish reversals for a possible swing trade long. I do not expect a retrace of that magnitude until after the upcoming fork is out of the way. Also remember that in order f or a retrace like this to unfold, something will have to surprise the market. Just like the Chinese government nonsense over a month ago. Remember that? Yeah neither does this market. In summary. strong markets like this are not driven by logic, and as one trader wrote in a previous comment, "Noone wants to buy the top" so it tough not to get involved one way or the other if you let your emotions get the best of you. Taking swing trades at these levels is high risk long or short (unless you don't mind taking 1k points of pain). Day trading is where the best opportunities are because you are looking for small profits (30 points is small). In terms of proportion, this market can see the 8k level, especially since there is no real selling signals to speak of. My plan as I have written before is to wait for a retrace back to one of my projected levels and look for reversal from there for a swing trade long. No need to get emotional, just a matter of waiting. Comments and questions welcome.
BITFINEX:BTCUSD
by MarcPMarkets
33