4xForecaster

Bears Bite Back On Bitcoin | $BTC #bitcoin $USD

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Traders,

An early bearish reversal signal is coming out of the bear cave, ... You know that growling sound.

Technically speaking, price has been on a quasi-reversal trend to the upside went it turned around from 555.90 and hit a new pitch at 607.20 (see chart). However, price has dunged into prior depth as it reversed once again near that prior low.

From the current level, a rally to a structural hurdle, such as 576. 44             remains a high probability, but a continuation of that decline will remain a threat to bulls if that level remains validated but not transgressed in a way that clearly sends price to higher grounds. So, for cautionary measures, consider 576. 44             as a strong bearish entrenchment.

A pattern trader might decipher a Gartley , or perhaps the cocooning of a butterfly , if indeed price were to fall to lower lows, below 555.90, that is.

The predictive model itself posted an early market reversal signal, short of a confirmation. While the targets remain unconfirmed, i will define them now as a mere warning sign, sort of laying out the ground with red flags to signal bear traps on the way down there.

Still, the PINK zone will act as the LAST bullish bastion, before such bearish minefield scenario plays out. The targets are thus defined as:

1 - TG-1 = 557.43 - 11 AUG 2014

2 - TG-2 = 538.42 - 11 AUG 2014

and

3 - TG-Lo = 524.20 - 11 AUG 2014.

As you may recall, the numerical targets (i.e.: TG-1, TG-2, ... ) are levels that define stepwise pauses where price is likely to post a shallower retracement (expect 0.214, 0.382 or 0.500-Fib retracements), as opposed to the qualitative targets (i.e.: TG-Lo or TG-Hi) represent levels that are LESS likely to be visited, but IF and ONCE price does reach these levels, it will likely act as a reversal level, pushing price out and passed all other numerical targets and beyond.


OVERALL:

Predictive/forecasting model has posted a warning signal, suggesting a potential decline to targets defined above. This bearish scenario has a HIGHER potential to being executed IF and ONCE price crosses below the PINK zone, thus opening the floor up to these bearish targets. Of course, there is a potential of a Double-Bottom pattern occurring as a very last level of bear rejection, but this is still an unlikely scenario compared to the possibility of a decline.

For now, the directional sign will remain on "Neutral" until a definitive price action commits to one or the other direction relative to the levels defined.

First things first, pink zone!

Cheers,


David Alcindor
Predictive Analysis & Forecasting
Denver, Colorado - USA


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Twitter: @4xForecaster
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FOLLOWING IS A QUICK SYNOPTIC "WEEK IN REVIEW" OF THE PREDICTIVE ANALYSES AND FORECASTING THAT GENERATED CHARTING:


This review starts up on 12 AUG 2014 with the following series of charts, when price was at a stand-still, and I offered a bearish bias through the following three targets:

1 - TG-1 = 557.43 - 11 AUG 2014
2 - TG-2 = 538.42 - 11 AUG 2014
3 - TG-Lo = 524.20 - 11 AUG 2014

12 AUG 2014
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13 AUG 2014
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The precision of the predictive/forecasting model can be appreciated at those points where either 1) A candle touches the forecast target at its most foreward point, or 2) the candle uses the forecast target as a transitional level to close then open a new candle. In this particular case, both of these events occurred right at TG-1, whereas TG-2 got steam-rolled. What occurred at TG-Lo though was an expression of the first condition, when price tip-toed right at TG-Lo and retreated significantly. In any case, all targets were hit quick precisely.


Despite this successful series of direct hits, what ensued was unusual, in the sense that TG-Lo was expected to act as a reversal level, as it started on this chart:


14 AUG 2014:
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Instead, price started to march on downward, completing a BACA and forming new candles BELOW this TG-Lo. As per the discussion, when this occurs against the model's forecast, there is a good chance that force from a higher timeframe would be interfering within any and all of the lesser timeframes - Note that the H4 chart did produce a weak target at 492.49. Hence, this forced the model to define new BEARISH targets using a higher timeframe, namely the DAILY chart, as follows. The targets that was first defined were:

1 - 492.49
2 - 471.00
3 - 448.84

Note that there was no quantitative (TG-1, TG-2, ...) or qualitative (TG-Lo, TG-Hi) definition assigned, as the model was calibrated to be most precise on its ability to predict towards which quantitative target price would tend to, and at which qualitative target it would reverse. However, at a higher timeframe, this ability to decipher S/R from reversals is not as good a resolution, hence the targets were left without this detail, as per this DAILY chart:


14 AUG 2014 - H4 Chart: Defining a weak target at 492.49:
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14 AUG 2014 - DAILY chart: Defining weak targets at 471.00 and 448.84:
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What ensued was another attainment of the targets. As just discussed, the deciphering of S/R versus reversal levels cannot be guaranteed at a higher timeframe. For this reason, a "Pink Range" (a separate set of measurements independent from the model) was overlaid onto the chart and targets for added definition. The result was satisfactory, as per this resulting series of charts where all three targets (H4: 492.49 and DAILY: 471.00 + 448.84) are progressively hit:


15 AUG 2014:
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16 AUG 2014:
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17 AUG 2014:
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17 AUG 2014:
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18 AUG 2014:
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19 AUG 2014:
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Here is how it looked like in the DAILY chart:


18 AUG 2014:
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20 AUG 2014:
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What ensued was the realization that DAILY timeframes did not matter at that point. As you recall, the higher timeframe had to be used on the assumption that a failure of the predictive/forecasting model at the H4 level (where it was calibrated to work best) would suggest interference of heavier price-moving players, typically at higher timeframes. Now that price had settled, we turned out eyes back to H4, and even used the following M15 timeframes to calibrate the reactive rally, as follows:


20 AUG 2014: M15 Timeframe used to calibrate overhead resistance; Defined as 523.79:
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20 AUG 2014:
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Here is the view using the H4 timeframe, which is the one we would use for most of the predictive analyses and forecasting:


20 AUG 2014:
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And here is the DAILY view, just to keep an eye on the potential overhead hurtles:


20 AUG 2014:
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Now, remember the M15 timeframe with the forecast 523.79? Here we are hitting and reversing at that forecast level:


20 AUG 2014 - M15: Hit forecast target at 523.79:
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20 AUG 2014 - M15: Reverses from forecast target at 523.79
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At this point, we figured that 523.79 was a significant trench war between bulls and bears, and that it would be a matter of time before bears would simply consumed all bulls, based on the predictive model which pointed to more downwards pressure. For this reason, it offered the following two targets:

1 - TG-1 = 496.35 - 21 AUG 2014
2 - TG-2 = 481.92 - 21 AUG 2014


21 AUG 2014 - M15: Defining TWO bearish targets at 496.35 + 481.92:
snapshot



Now, while the targets remained pending, price continued to oscillate up and down in a manner reminiscent of an Elliott Wave's pattern, called a Triple Zig-Zag. While this was not apparent right away, several near-hit with subsequent retractions prompted me to share this quick review of the pattern, as per the following link and chart:


snapshot



Essentially, I became suspicious that, while the predictive/forecasting results were reliable and still valid, the fact that price had not committed to them was for technical reasons of a nature that would be best revealed through Elliott Wave patterning. What unfolded was simply just that:


21 AUG 2014:
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22 AUG 2014:
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22 AUG 2014: Plotting An Elliott Wave Triple Zig-Zag:
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22 AUG 2014:
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Here is the schematic being used, mapping out only 2 degrees of impulsive and corrective waves:


22 AUG 2014: Mapping out 2 degrees of impulsive and corrective waves:
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So, here we are today, Saturday, August 23rd, with a well-mapped out pathway, thanks to a predictive/forecasting model and an overlay of Elliott Wave to gain added confirmation - Result: Another hit, dead-on:


23 AUG 2014:
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OVERALL:

The objective of this synopsis is to show the trader that technical analysis can be played at several levels, such as pattern analysis and other occult geometries, or using in-field or out-of-field indicators, as well as a combination of several of them. In any case, trading has a way to require all faculties at all times, and to constantly adapt to the situation, given the correct interpretation of the event, even if (or I should say, especially when) a "system error" occurs, such as the realization that the predictive model had defined a quantitative target (TG-Lo) which was supposed to act as a reversal level, but instead failed to do so. It did not take to doubt the trading plan which is represented by the model, but simply to interpret conditions that would invalidate the plan and quickly adapt to it, such as recognizing that heavier players in higher timeframes had interfered against H4 and M15 levels of activities.

Another important lesson that I am fond of being reminded by the market every day is that it takes several tools to trade. While sticking to one should help the trader in most of the situations most of the time, I recommend traders to learn broaden their knowledge base by turning to patterns, indicators, trendline and even stepping out of the crowd and read into occult geometries and measurements, such as those encountered in Connie Brown, or Prechter's Elliott Wave material, or simply looking at charts in a totally different way all on your own.

As some of my former students had to endure repeatedly hearing me say:

"Price is a carrot dangling at the end of a stick, held by institutional hands"

This means that all of your orders, positions, stop-losses and take-profits are either known well in advance before they are posted on the chart by way of a predictable mass psychology, or simply by the very disadvantageous fact that institutional traders can in fact see all of these positions on their own screens. In fact, it is the very bank in which you own an account where these traders might be. Beware.

Cheers,


David Alcindor
Predictive Analysis & Forecasting
Denver, Colorado - USA


---------------
Twitter: @4xForecaster
--------------


PS: Here we are now, with a price action looking to come down further to (perhaps) hit TG-2 = 481.92 - 21 AUG 2014

23 AUG 2014: Current price action as of the time of this writing:
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+1 Reply
IvanLabrie PRO 4xForecaster
Amen!
+1 Reply
23 AUG 2014 - Update:

From Twitter:
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$BTCUSD hit forecast TG-1 dead-on; suspected #elliottwave TZ completed:

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via @tradingview | $BTC #bitcoin #litecoin
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Cheers,

David Alcindor
+2 Reply
22 AUG 2014 - Update:

From Twitter:
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$BTCUSD rolls down the final #elliottwave TZ segment per forecast:

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via @tradingview | $BTC $USD #bitcoin #litecoin
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Traders,

As per discussion earlier, the corrective wave underway lent itself to (almost) easy recognition, in the form of a Triple-Zig-Zag, although perhaps it might conjure up bad mo-jo to count our bears before they growl. So, let's simply say, so far so good.

I will continue to offer a frame-by-frame analysis as this correction is carrying on.

Have a fantastic week-end.

Cheers!


David Alcindor
+2 Reply
Jameve 4xForecaster
I hope all of your weekends are fantastic, David :)
+1 Reply
You too @Jameve!
- David
Reply
DanLaffas 4xForecaster
Nailed it again David! BFX low at 495.52. Well done. With your help I closed my short at 496 (Bitfinex).

Now to see if this bounce will turn again and head for the TG2 - 481.92 and also the 452-461 reversal target... Time will tell.
+1 Reply
Thank you @DanLaffas. I'm glad this information is getting put to good use - David
Reply
DanLaffas 4xForecaster
It also helps being in the right timezone when these things happen :)
+1 Reply
DanLaffas 4xForecaster
Now that the TZ has completed, what would be the next move?

My overall forecast for the coming months (weekly & daily charts) tell me it's moving further south, but in the interim there is still room for the bulls to stretch their legs. Maybe it's a wait and see period? Any thoughts?
+1 Reply
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