As indicated yesterday (see here: tradingview.com/v/sKe4z6fx/ ), I added a new feature in the predictive analysis and forecasting, which provides a "line in the sand" where bulls and bears are likely to take over, if and once price surpasses it. The condition here is one that I would define as a "BACA" (A term soe other trader came up with in a Facebook Forex discussion group, called"The Giraffe Room" - See Bubboo Bains). In essence, BACA means nothing more than price "Breaking Across + Closing Across" a given level.
In this particular case, the Bearish BACA line (from here on: "(-) BACA") was defined at 429.02. Hence, a price cross below this line would also have to close below this line to engage the higher probability of a bearish scenario to unfold. It appears to me that this H4 chart is still in the midst of fashioning a price bar, and that no commitment below this level has been made. Nonetheless, I thought it prudent to foretell that this is possibly underway.
As the bulls are getting pummeled, let's simply wait and see what comes of this BACA line. In the mean time, I would add that prior analysis remains intact and targets in sight - Link to most recent analysis is available above, as well as in TradingView's "Related Ideas" - Here is a Worst-Case Scenario that was originally posted, as well: tradingview.com/v/3n6A1q33/ - Turns out that this Worst-Case Scenario is currently unfolding.
Cheers,
David Alcindor Predictive Analysis & Forecasting Denver, Colorado - USA
There are TWO charts in which I had provided bearish targets. I will cut and paste the explanation that I offered earlier this morning on the original chart - In essence, the 329.xx target was generated out of the H4 chart, whereas the 270.xx was generated out of the daily chart. A H4 target is MORE accurate, whereas the DAILY target is used for worst case scenarios, and tend to be further out than the target defined in the H4 timeframe:
==============================
There were TWO TG-Lo's generated, as follows:
1 - One at 276.87 from a DAILY chart, defined as "TG-Lo = 276.87 - 17 SEP 2014"
... AND ...
2 - ... Another one at 329.42 on the H4 chart as "TG-Lo = 329.42 - 25 AUG 2014.
As I mentioned yesterday, the H4 target is usually much more reliable than any other ones. However, those defined off of the M15 chart would tend to be occurring sooner (high-sensitivity, low-specificity) than what is defined off of the H4, whereas those defined off of the Daily chart would tend to be occurring later (low-specificity, high specificity) than what is defined off of the H4.
The following DAILY chart illustrates the one target defined at 276.87 from a predictive/forecasting model, defined as "TG-Lo = 276.87 - 17 SEP 2014" - Also mentioned was that the daily-model generated target can be used as an alternate "Worst Case Scenario".
If price were to fall below that worst case scenario within the H4 chart, then I would stick with analyzing price action off of the daily chart, since this would imply that heavier players are interfering with smaller timeframes.
Cheers,
David
=============================
I then went on to explain offer the links in which the respective analyses were coming from:
=============================
Here are the two analysis where two distinct worse case scenarios were defined, in reference to above chart:
1 - One at 276.87 from a DAILY chart, defined as "TG-Lo = 276.87 - 17 SEP 2014" (Chart was converted to a H4 from a daily view after H4 was defined in daily timeframe):
- tradingview.com/v/NNwLQmbW/
... AND ...
2 - ... Another one at 329.42 on the H4 chart as "TG-Lo = 329.42 - 25 AUG 2014 (no timeframe conversion here. TG-Lo was defined in H4).
- tradingview.com/v/3n6A1q33/
In my view, once you end up chasing price from a H4 to a higher timeframe, I would simply stay cash until the institutional hands are done fondling the crypto sack.
David Alcindor
===========================
Finally, I developed the analysis off of the most recent chart, where Elliott Wave principles are explained in details:
===========================
05 OCT 2014 - ADDENDUM: Watch for the possibility of an Elliott Wave's 3rd wave extension:
There are several geometries worth considering at this juncture:
1 - Price has posted a series of internal-within-internal waves, in which the beginning of a 5-wave system remains incomplete. As this occurred within the beginning of a 3rd wave impulse, this would likely respond to the Elliott Wave's 3rd wave extension condition.
2 - Assuming that the current wave development is the most probable type of extension (this current downward impulse maintained a normal wave 1 and 2, but developed a protracted, disproportionate 3rd wave impulse, making it a good contender for a 3rd wave extension), then a redundant geometry is called for at this point, where Elliott Wave Principle suggests that in the case of a 3rd wave extension:
Wave-1 = Wave-5.
For this rule to hold true, then we would need to see the following price action:
1 - The current TG-Lo remains a structural low, not to be surpassed;
2 - A more COMPLEX corrective rally would occur at this point, so as to also answer to Elliott Wave's Rule of Alternations, where a simple ZZ in Wave-2 would be accompanied by a more complex zig-zag ("ZZ") alternative, such as a double-ZZ or a triple-ZZ;
and
3 - A Wave-5 development that would spare the termination point of Wave-3, whichi would make it a TRUNCATED 5th wave and leave TG-Lo intact.
Above conditions are based on the assumption that TG-Lo defines a solid reversal level.
REVERSAL TO A LESSER-DEGREE POINT-4 LEVEL:
In order to evaluate a potenital reversal level for Wave-4 at the highest degree defined in the chart, one needs to seek a one-degree down 4th wave termination point, which is approximated at about 443.00. Here again, this is defined based on a solid reversal ground defined by TG-Lo.
OVERALL:
As explained earlier, failure of TG-Lo to hold price at any significant levels would require analyzing price action at the daily and weekly levels while remaining cash, as this would suggest that larger institutional players are interfering with lower timeframes.
Thank you,
David
====================================
At this point, it is worth noting that Wave-5 remains under potential developmen. Here again, we are assuming that the rallying from TG-Lo will generate a height equal to Wave-1, so that the Elliott Wave's 3rd extension rule in which Wave-1 = Wave-5 becomes true.
Feel free to chime in if you are a trained Elliotician, in case the rules were erroneous, or in case you perceived a different count. I realize that Elliott Wave principle demands that price action be completed before attempting to count waves. What I have done here is to simply use EWP as a backdrop to my predictive/forecasting model, keeping EWP a secondary layout.
Thank you,
David Alcindor
BuyOnPurple
⋅
Amazing work as always Dave. I'm really excited to see how the retracement to the upside pans out assuming the new low holds. Bitcoin sure is a bumpy ride.
"In my view, once you end up chasing price from a 4H to a higher time-frame, I would simply stay cash until the institutional hands are done fondling the crypto sack. "
This is great advice, and is exactly what I found myself doing. Trading down my trendline from the 600 area in August, I found myself constantly wanting "on the cusp" of closing short positions (I unfortunately did close a small portion well above $350) on the 4H on the basis of volume signals moreso than price signals. After the first mistake, I forced myself to stick to the 12 hour chart that eventually turned to the 1 day chart to get a better idea of how the market was absorbing the volume that was coming in. This perspective really showed how permanent a purchase at the middle levels (wave 3) of this entire downtrend could be. Bitcoin volume is torrential. When it rains, it pours.
The accuracy of your targets is of course impressive as always. However, I'd like to share the daily chart that I've been trading successfully with. My levels aren't as systematically defined -- I love the simplicity that pitchforks offer trend traders. What I've done is attach the trendline node to the price high defined on June 2nd, and then attached the following nodes that define the span to the June 25th bottom and June 30th top. Its a schiff pitchfork, so the resultant trendline's slope is curbed (slightly more bullish) as compared to a standard pitchfork.
The solid purple line was a structural level I defined at the time based on the points of price contact. Its a simple coincidence that it's attached at the point of intersection of the master trend-line and span. This horizontal structural level marked the line in the sand for me. When we crossed it on the 23rd of July, I turned from bull to bear and haven't looked back since (besides the small blunder I mentioned earlier :) ). Although I did not make use of every pass of the major trendline that I could have, I did manage to maintain perspective until the most recent bottom (still pending!) was in.
The colored levels of the pitchfork are simple fibonacci deviations away from the master trendline. They aren't considered "hard" decision lines for me anywhere except the 1.0, 1.618, and median levels. Were I to have entered a trade on a smaller timescale, however, I would have expected to use these colored areas as relative target areas to manage risk on smaller positions traded across the center line. In other words -- buy on green, sell on green. Buy on blue, sell on blue.
In this case, my patience rewarded me with a buy in the lower dark purple area. Exactly what I've been waiting for. Cheers!
4xForecaster
⋅
Hello @BuyOnPurple - Looks like you are developing your own style, and that the fork is your work horse. As I had mentioned to other traders before, indicators will appeal to one mindset, and won't stick or make sense to another. It's like having to chose your musical instrument of choice before playing in concert with other traders. We all play the same harmonical notes, but using different instruments and producing different looking charts. At the end, the underlying price will respond to all of them in a way that unifies all indicators as valid and true to the tune of the market - David
From Twitter:
----------
BTCUSD defines 331.00 as conditional trigger for 313.83 target; bears lurk at 350.73:
@TradingView BTC #bitcoin
----------
David Alcindor