We could see continuation of downward pressure well into March
In the mid term group of timeframes (3d, 6d, 9d, 12).
In the 3d, subsequent to the Red RSI making contact with the Green EMA as it falls, the Energy has closed below level 50 indicating a period of downward pressure (as we have seen reflected by the price action). As the Green EMA is higher than the Energy we are likely to see a higher low, The Green is poised to fall below 50. Because there are signs of local upward pressure in the short term group of timeframes (90, 3h, 6h, 12h), it is my opinion that the Green will fall below 50 during the 3d candle starting in just over 10 hours. The Red RSI in this TF has turned down and although it is currently above 80, if it continues down below 80 during the next 3d candle and as suggested the Green closes below 50, we are at risk of the price action falling to within proximity of the Bollinger Band basis. (currently $39740 but rising so likely to be higher) This is not guaranteed but is where we seem to be headed based on current market dynamics. In the 6d, 9d & 12d, although the Green is higher than the Energy which indicates upward pressure, there is a significant gap which can indicate a precarious balance in which pressure and price action can reverse suddenly and dramatically. Based on the high level of the Red RSI & Blue LSMA we can infer overbought conditions.
In the longer term - 1M, 2M, 3M & 4M the Green EMA is at a healthy level above the Energy and the Energy is still rising. This is bullish long term. In the Monthly the Red RSI & Blue LSMA are rising together which is bullish, despite the fact that the Red RSI has shown signs of crossing below the Blue LSMA - this is not conclusively established and in any case due to the length of the TF could be consistent with beginnings of reversal at the end of the cycle.
We also currently have a downward pressure race between the Energy in the daily & the Red RSI in the 2d.
When the Red RSI fell below 50 in the daily a downward pressure race was triggered. In order for upward pressure to resume, we first need to see the Energy in the daily CLOSE above 50 before the Red RSI in the 2d CROSSES below 50. If the Energy does win the race, we need to see the Green MA higher than the Energy in at least the three preceding halved timeframes from the timeframe in which the race was triggered. If the Red RSI wins we then have a race between the Energy in the 2d and the Red RSI in the 4d etc. This downward pressure race has cascaded up from lower TFs. Until the Energy decisively wins the race, we do not have a chance for reversal to upward pressure in the relevant timeframes.
In summary:
Consistent with my last analysis, I still believe that we could see downward pressure continue well into March. This period of downward pressure does not necessarily mean we will see significant downward price action though the scenario above is still possible, during periods of downward pressure we will see sideways action within a range at best, downward price action at worst. However based on the observation mentioned above about the significant gap between the Green and the Energy there is a possibility of a sudden and significant dump. Many analysts and traders believe that we may have seen the buying climax and we have begun the end of cycle correction. This is not my view based on what I am seeing in the long term timeframes.
As previously mentioned in previous publications, these markets can change with very little notice. These changes initially manifest themselves in the lower timeframes and propagate up through the timeframes. Nothing is set in stone. Unless you are day trading, you cannot benefit from these early warning signals.
As always - this is not financial advice but just my view of current market dynamics.
One has to be aware that analyses are done on the basis of what the indicators are saying at the time and things can change. It is important to always monitor the scalping group of timeframes as we will see changes propagate up from there.
Trade safe
aBL
Long Term:
Near Term:
Short Term:
In the 3d, subsequent to the Red RSI making contact with the Green EMA as it falls, the Energy has closed below level 50 indicating a period of downward pressure (as we have seen reflected by the price action). As the Green EMA is higher than the Energy we are likely to see a higher low, The Green is poised to fall below 50. Because there are signs of local upward pressure in the short term group of timeframes (90, 3h, 6h, 12h), it is my opinion that the Green will fall below 50 during the 3d candle starting in just over 10 hours. The Red RSI in this TF has turned down and although it is currently above 80, if it continues down below 80 during the next 3d candle and as suggested the Green closes below 50, we are at risk of the price action falling to within proximity of the Bollinger Band basis. (currently $39740 but rising so likely to be higher) This is not guaranteed but is where we seem to be headed based on current market dynamics. In the 6d, 9d & 12d, although the Green is higher than the Energy which indicates upward pressure, there is a significant gap which can indicate a precarious balance in which pressure and price action can reverse suddenly and dramatically. Based on the high level of the Red RSI & Blue LSMA we can infer overbought conditions.
In the longer term - 1M, 2M, 3M & 4M the Green EMA is at a healthy level above the Energy and the Energy is still rising. This is bullish long term. In the Monthly the Red RSI & Blue LSMA are rising together which is bullish, despite the fact that the Red RSI has shown signs of crossing below the Blue LSMA - this is not conclusively established and in any case due to the length of the TF could be consistent with beginnings of reversal at the end of the cycle.
We also currently have a downward pressure race between the Energy in the daily & the Red RSI in the 2d.
When the Red RSI fell below 50 in the daily a downward pressure race was triggered. In order for upward pressure to resume, we first need to see the Energy in the daily CLOSE above 50 before the Red RSI in the 2d CROSSES below 50. If the Energy does win the race, we need to see the Green MA higher than the Energy in at least the three preceding halved timeframes from the timeframe in which the race was triggered. If the Red RSI wins we then have a race between the Energy in the 2d and the Red RSI in the 4d etc. This downward pressure race has cascaded up from lower TFs. Until the Energy decisively wins the race, we do not have a chance for reversal to upward pressure in the relevant timeframes.
In summary:
Consistent with my last analysis, I still believe that we could see downward pressure continue well into March. This period of downward pressure does not necessarily mean we will see significant downward price action though the scenario above is still possible, during periods of downward pressure we will see sideways action within a range at best, downward price action at worst. However based on the observation mentioned above about the significant gap between the Green and the Energy there is a possibility of a sudden and significant dump. Many analysts and traders believe that we may have seen the buying climax and we have begun the end of cycle correction. This is not my view based on what I am seeing in the long term timeframes.
As previously mentioned in previous publications, these markets can change with very little notice. These changes initially manifest themselves in the lower timeframes and propagate up through the timeframes. Nothing is set in stone. Unless you are day trading, you cannot benefit from these early warning signals.
As always - this is not financial advice but just my view of current market dynamics.
One has to be aware that analyses are done on the basis of what the indicators are saying at the time and things can change. It is important to always monitor the scalping group of timeframes as we will see changes propagate up from there.
Trade safe
aBL
Long Term:
Comment:
Update to analysis
As suggested, we were at risk of closing with the Red RSI below 80 and the Green EMA below 50 in the 3d. As a result, I believe we are at risk of my scenario playing out and the price action falling to the PROXIMITY of the Bollinger Band basis. I have plotted the rough trajectory in green dotted line as the basis is rising, to give us an idea of where the price action may end up. This will depend on timing. My guess would be between $42500 & $44000 as previously we didn't quite make it down to the basis. Bear in mind I am only looking at the 3d TF as we have had no closing confirmation in the higher TFs in this group. Another possible scenario is that we could range sideways for longer, in which case the basis will be higher and accordingly the price action will be higher.