The simplest of all indicators is the CM_Ultimate_MA-MTC-V2, which is a composite of moving averages and turns green when you should go long and turns red when you should sell (or short). During iffy times you can see the CM_ flicker between green and red and as the red arrows will show, that happens most often when the price action is flat and the CM is also mostly horizontal. (I picked bad long signals and you can see a few fake short signals, but I want to keep this simple). We see right now that we just the CM_ turn green on the 1D and the price action and the CM_ are both trending upward and not moving sideways. This would be clear signal number 1 to go long, and we would watch for the CM_ or the price action to flatten out and the CM_ to flicker red and green to potentially negate this signal.
We see that volume has picked up recently. I unmerged the volume for simplicity and threw a horizontal line on their for visibility. The average volume for August consistently higher than it has been since mid April till July. We had a relatively narrow trading range for BTCUS for about two weeks and generally that is a sign of accumulation before a more powerful price action. Take a read on the Wyckoff Composite Operator, Absorption and Accumulation here: stockcharts.com/articles/wyckoff/2015/06/accumulation-phase-absorbing-stock-like-a-sponge.html. I am by no means an expert on the total Wyckoff trading system but this looks like abortion and accumulation are in the final stages. These shares of BTCUSD should be in strong hands from here on out, as the whipsawing action shakes out the weak hands.
Finally our first area of concern is the log resistance line that has pressed the price of BTCUSD down since early February. That, and not some other psychological price will be our first real test of the uptrend. Our manner of approach will be important. If we get to the line and get rejected while displaying hidden bearish divergence that would obviously be a bad thing. If we get to the line with and retrace with bullish divergence that is good. IF we get past the line and retrace with hidden bullish divergence that is also good.
Comment
⋅
The chart below shows another powerful signal signalling a bull run. We almost had a bullish MACD Cross on the weekly a few weeks ago chart but failed to do so. Right now the historgram on the 1W char reads -1.7, which is an increase over last weeks value of -0.43. If we hold on to this weeks gains a bullish cross is almost guarantied, and if that can be sustained we are prepped for a major run up. The degree of which we can't exactly tell right now, so I am not calling any x10 or x8. The last time we had the MACD cross above the signal and then cross over zero was September 2015, and BTCUSD was around $200-250 dollars. We also see we spend a lot long in accumulation in 2015 than we spent the last two months. If you are trading leverage you might need to be nimble but everyone else should be thinking about having strong hands. (Not financial advice, etc)
Comment
⋅
I think we are on the verge of retracing before legging it back up. The price action oval shows a reversal candlestick pattern and the RSI is quite high on the 12H timeframe. I know that is a timeframe that is unavailable for those without paid accounts but I like to use it because it is quicker than the 1D and but not so fast you get to many fake signals. The RSI shows that this uptrend has been pretty steep compared to the beginnings of our last uptrend. We had a pretty drastic retracement which created the right shoulder of the Inverse head and shoulders that impulsed us up. No telling right now if the retracement I suspect is inbound will be as drastic but the RSI does look positioned for a pull back as well.
The second oval is on the Hull MACD. When the H-MACD bounces off the signal like that it generally a weak structure that predicts retracement A zoom out shows that at this level we have either blasted right through or had a hard fought time getting through. Considering we haven't blasted through is another factor suggesting retracement.
One thing I am also watching is the ETHBTC trading pair. I have been trading BTCUSD looking for gains because the EHTBTC paring shows that is where the gains are as we move up. I am going to be closing my BTCUSD positions looking for this retracement and based on what I see, I might re-enter the crypto market in a ETHUSD position. The charts shows we are at a previous strong support level and the CM_Ultimate has turned green on the 4H. I will be looking for the CM_ to turn green on the 6 or 8H before commiting to an ETHUSD long over a BTCUSD long.
Of course, not financial advise, so forth and so on. The final thing I will be looking for is the potential formation of a double top or a top with bearish divergence. Don't want to get trapped in one of those.
Comment
⋅
Things are about to get grizzly. We are near a key level (6.8k) and we are approaching it with clear hidden bearish divergence on the 4h RSI and a more subtle hidden divergence on the MACD (ideally for hidden bearish the MACD would have created a higher high, rather than a flat high). The price action may continue to chop sideways or even form a double top or head and shoulders and the hidden bearish divergence could become clearer on higher timeframes.
This is not a time for those that don't feel comfortable swing trading. The signals are a lot clearer on ETHUSD that the price action is going to slip, an considering that ETHUSD and BTCUSD are correlated about +90% BTC is also probably due for a serious slip in the next few days.
Any updates on this. Always love your analysis and your perspective on the current market
This_Guhy
⋅
@jojo242, The chart shows that the MACD is strengthening as it is getting less negative as the price action moves sideways. True bullish divergence would be seen if the price had a lower low and the MACD made a higher high, so this isn't as powerful as a signal as I was hoping would develop. The BITFINEX shorts are still near an all time high and so I still get the sense we are in a wychoff accumulation and absorption phases, and this is centered on BTC while the alts are left to cope by themselves. During the accumulation phases multiple attempts will be made to "spring" out of the low by the "composite operator" and capitulation would occur when the composite operator gives up and dumps their holdings.
This is still very much a peak to peak and trough to trough environment. I don't see any hidden bullish divergence that predicts a lower low, which is a positive in that the charts don't suggest a new low.
Ethereum shows us a clear example of times when bullish divergences isn't the be all end all indicator you could want. The 12 charts shows that we had bullish divergence build up from late May to July and all we did afterwards is move sideways. We may currently be in the same situation. ETHUSD action from May to July show a clear example of how using just one signal can get you in a bull trap or a bear trap. With shorts being high again I am in a position for a relief rally or reversal but there is is always a chance you read the indicators right and got caught in a bull trap, which is why you never trade more than you can lose and you never take your margin to the limit.
CryptOpportunity
⋅
I am not an experienced trader. Lately I was just combining both 5MA and 10MA and Heikin Ashi candles on Daily. How do I get CM_Ultimate_MA-MTC-V2 indicator please ?
This_Guhy
⋅
@CryptOpportunity, I just add it like I add any other indicator. I go to indicators and search for "CM_" and it is one of the top responses, put there by ChrisMoody, and it is in the public library. I find it works best on the 6 or 8h timeframe for swing trade signals and you need a pro amount to get those time periods. Definitely don't use it on the 4h if we are anything resembling a sideways market.
I find the CM_ works rather well when combined with simple resistance and support and the RSI/MACD, looking for divergences. Almost every time I try and outmaneuver that system it isn't worth the stress, fees, and the risk of putting stops to tight.
CryptOpportunity
⋅
@This_Guhy, I checked on Gemini Chart where I can use these timeframes without pro amount, but do not find the CM_ or ChrisMoody indicator in there. Will check on other exanges. Thank you !
CryptOpportunity
⋅
@CryptOpportunity, By the way, it was sending a bullish sign before it started the way up to 7100 ish, but later it went back to the start at 6880 and lower... Could you up date the chart to check what sign is indicating ?
This_Guhy
⋅
@CryptOpportunity, I did an update yesterday that we were going to retrace. The price range during that update was between 7010 and 7050, so a few hundred dollars ago or about -3% ago.
If you are in tradingview on the full featured chart you can just go to indicators and add the indicator. Maybe go to the tradingview wiki if you need to search out how to do that. As I said above, the indicator is in the public library.
I am a swing trader with an individualized system, as most people hobble together a trading system that works for them. I am looking for a fib retracement this uptrend, which means I want to see the price find support on a fib level on a decent time frame and the indicators I use (RSI/MACD) to signal another leg up. By bias right now is bullish so long as we get a decent fib retracement, If we get a new low then obviously I was wrong about us being in an uptrend and this was a dead cat bounce.
We seem to have broke the .236 fib support level so I am looking for us to find support at either the .382 or .5 support. When BTCUSD finds support I am sure ETHUSD will to and as I mentioned in my update, I will consider moving into ETHUSD instead of BTCUSD.