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Short

BTCUSD Update: Trendless Action But Increased Bearish Divergence

BITSTAMP:BTCUSD   Bitcoin / Dollar
131 0 6
This update is from two days ago. Sideways action prevails. Here are the indicators.
Negatives:

1. Last valid sell Sell Fractal was Sept 13th.
2. Your compass for direction, the alligator, is feeding weakly in a down trend.
3. CHOP is almost above the shaded area. This predicts a lack of trend.
4. CHOP ZONE is red, indicating a downward bias.
5. Prices are trading below the Ichimoku Cloud .
6. Prices are below (or at) the red Ichimoku Cloud conversion line.
7. Prices are below the Ichimoku Cloud baseline.
8. The 5/34 MACD (top) has a bearish cross. Histogram within is falling.
9. The phase energy (top lower) is steadily falling, and it is still below the zero line.
10. The-DMI (top middle) has the dominant direction as down (red line over green), and the black line is rising. This means more strength in SELLING.
11. Ichimoku Cloud has red border.
Positives:
1. Not many. Price is hanging above trend support, but this is a very weak positive.

Support is last swing low at $594.63.
Want odds? 88% odds down (because of the sell Fractal, down alligator direction, lower-DMI, lower phase energy),
12% odds up/ sideways (CHOP not yet indicating trend).
What to look for: if there is to be a breakout move lower, CHOP should start falling (lower in the shaded area) to confirm the trend.
Another indication of trend is-DMI (top middle). Currently-DMI has a strong negative bias.
Note: DMI-indicates trend. CHOP indicates trend. From my own experience, CHOP is more reliable as a trend tool, but-DMI reacts faster.
This is why I use both.

There are FAR MORE NEGATIVES than positives on this three hour chart. The daily chart should be used to confirm. (Naturally, the daily moves more slowly).
In my opinion, use tight stops if you are long. I would not short until a breach of $594.63.
Good luck to you in all your trades. Don.

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