(this is a re-posting of a reply to traders in #bitcoin who asked that I explain the recent tweet - I decided to fully expand the explanation into a technical lesson)
Please, refer to the following link for the original analysis.forecasting - This page will remain a place for questions on technical analysis, if you do not mind.
Hello @devlspawn - Thank you for asking for clarification.
Here is a synopsis of the technical/predictive analysis:
BTCUSD/Weekly - Bitstamp:
Above WEEKLY chart represents BTCUSD in Bitstamp, which I posted several months ago, expecting a significant decline, which was defined by the TWO rectangles, estimating a probable depth of decline, first as a low-probability of 335 to 150, and a second with very-low probability decline down to as low as 130.
In the interim, price for this exchange (Bitstamp) reached about the 160 level, coming quite close to the vicinity held in forecast.
As price meandered its way down, it did so by defining tops and bottoms, which I defined in the price field as points 1, 2, 3, 4 and 5. Close evaluation of these points will show several important things, such as:
1 - Points 1 and 2 are connected by an a-b-c pattern, where the height of Point-C comes to exactly 1.618 times the height of Point-A, as follows in the chart:
2 - Points 1 and 2 are connected by a zig-zag pattern moving against the main downtrend that preceded it, thus completing a correction at Point-2, as follows:
3 - Points 2 and 3 are connected by an Elliott Wave impulse formation, define internally by waves 1, 2, 3, 4, and 5, where wave-1, 3 and 5 (BLACK) move in the direction of the dominant bearish trend (PINK Arrows), whereas interim retracements in waves 2 and 4 (BLACK) move against the dominant downward trend (as per orange arrows) as follows:
4 - The overall move from Point-1 to Point-5 falls under TWO known patterns:
a -- Elliott Wave's Leading Diagonal, where points 1-2 and points 3-4 are connected by a zig-zag (i.e.: a simple a-b-c pattern, as is the current case), and points 2-3 and 4-5 are connected by an impulse wave (ie.: with internal points enumerable as 1, 2, 3, 4 and 5, such as was just demonstrated above between points 2 and 3, although you should visually appreciate a similar construct between points 4 and 5). If you counted the connection between these points, you would see that points 1-2 and 3-4 are connected by 3 points, or an internal a-b-c pattern, whereas points 2-3 and 4-5 are connected by 5 points, as enumerated in the chart above, such that you would arrive at the following internal construct:
3-5-3-5.
This typifies the Elliott Wave's Leading Diagonal - Please, refer to this link (cut and paste) and review the bottom for a typical example of this Elliott Wave's pattern:
- elliottwave.net/educational/basictenets/basics2.htm
AND
b -- Bill Wolfe's Wolfe Waves pattern ("WW"), which is essentially the envelop of the overall detailed tracing just discussed above. What the WW pattern requires is a set of ipsi-directional (i.e.: "same direction") lines, which in the chart is define as Line 2-4 and Line 1-3 (I would typically leave 5 out of the count, since it completes automatically at the intersection of the 1-3 Line, although it can also complete under the name of "five-prime" or even "five-second", given a certain set of conditions.
In the tweet I posted, I referred to this "five prime", written as 5', which is defined as follows:
1 - Draw the 2-4 Line and the 1-3 Line.
2 - Copy the 2-4 Line, and place its beginning right at Point-3.
3 - This new 2-4 Line projection is now called the Target Line, or Profit Line, and will define Point 5' upon price validation of this line.
4 - A 5-second, or 5" will most rarely be defined the same way, except that in this instance, you would need to place the copy of the 2-4 Line and make it start off of Point-1.
Now, here are important rules about this pattern:
1 - Points 1-2 should be FARTHER apart than points 3-4
2 - Point4 should exist WITHIN the range of Points 1 and 2
3 - The lines defined by these points should be referred to as Line 2-4 and Line 1-3
4 - Line 2-4 and Line 1-3 should CONVERGE always
5 - IF Lines 2-4 and 1-3 converge DOWNWARD (as in this case), expect a significant rally to occur ONCE price reaches point-5 (RARE), or Point-5' (MOST COMMON), or Point 5" (RAREST EVENT) - This would constitute a BULLISH WW
6 - IF Lines 2-4 and 1-3 converge UPWARD (opposite to this case), expect a significant rally to occur ONCE price reaches point-5 (RARE), or Point-5' (MOST COMMON), or Point 5" (RAREST EVENT) - This would constitute a BEARISH WW
7 - A NEW line should be defined, connecting Point-1 and Point-4, as follows:
Just as a point of recollection, here is the tweet I posted, for which you owed you a bit more clarification:
BTCUSD: As forecast completed, now look for 5' validation vs. 1-3 Line transgression:
Now that you know what Point-5' means, and what the 1-3 Line refers to, it should come within reason that what we need to expect is:
1 - Either a continuation to the upside, across the 1-3 Line
2 - Or, a continuation of the decline towards completion of Point-5', which we now know to validate only ONCE price crosses the copy of the 2-4 Line projection originating from Point-3.
As a general rule, and as define above, the MOST COMMON manifestation of the WW pattern is via a 5-prime completion. So, my inclination here would be to wait for this completion to occur.
Also, and this is for the most CONSERVATIVE traders in our TradingView community: The 1-4 Line is supposed to be the Take-Profit, or "TP" line. However, I would recommend taking full or partial profit IF and ONCE price reverses to the former level of Point-4, as per this illustration:
OVERALL:
We just reviewed a few fundamental concept which I apply in my structural and pattern analyses, namely:
1 - Basic geometries and Fibonacci correlations;
2 - Basic wave count and Elliott Wave pattern with internal construct
3 - Advanced pattern in WW and complex target projection in alternate points 5' and 5" and final TP line.
If you have any particular question on this or other advanced patterns, technical analysis or occult geometries, feel free to contact me. I appreciate the thumbs up as a measure of how well I reach out to the astute and learning crowd in this fine community.
I appreciate your readership and support.
David Acindor
Predictive Analysis & Forecasting
Denver, Colorado - USA
hey David, how do you see the 240 zone responding if this plays out? I'm looking at the head and shoulder type pattern and wondering if we break 240 that that would invalidate the pattern, and prove to be quite bullish perhaps
4xForecaster
⋅
Hello @Mr_Gareth,
Looking from the point of view of an inverted Head & Shoulder, price would need to rise to 260, recoil and rest at 235, and retest the 260 once again, with a deliberate break and continued advance above 260.
The DASHED arrows that I ascribe to the chart are probable price pathways. The speculative scenario just defined under a H&S pretext is already defined by these same dashed arrows, whereby price is expected to rise to 260, then rest at the upper belly of the geo along ts 2-4 Line, and then possibly rest, even attempt a loftier course above 260, which represents a lesser probability of attainment.
The height defined by Point-4 and Point-5' can easily be duplicated and stacked upon the level of Point-4 to approximate a geometric forecast IF indeed price where to turn bullish.
However, taking things one step at a time, price will need to ascend to 260 first, at which point a Kiss of Death (small parabola with nadir at Point-3, followed by a deeper parabola with nadir at Point-5') will likely rub Bulls the wrong way, which is the basis for a HIGH PROBABILITY push back IF and ONCE price rises to 260, which it is expected to do (HIGH PROB.).
The depth of pushback upon completion of the KoD is expected to be measured at a significant Fib retracement, although it is geometrically supported by the 2-4 Line, expectedly (MOD. Probability).
I would look at TWO components:
1 - Stopping Volume as price rests at the speculative 235 level, i.e.: as it eeks support along the 2-4 Line of the geo
2 - A Fib depth of 50%.
David Alcindor
G_Man
⋅
thanks for your reply, sorry I wan't more specific, I was talking about this formation:
Hello, @Mr_Gareth - Please, be sure to input the chart's URL into the icon within the writing window. This will bring the chart up and allow everyone else to quickly glance at it.
Here is a synopsis of the technical/predictive analysis:
BTCUSD/Weekly - Bitstamp:
Above WEEKLY chart represents BTCUSD in Bitstamp, which I posted several months ago, expecting a significant decline, which was defined by the TWO rectangles, estimating a probable depth of decline, first as a low-probability of 335 to 150, and a second with very-low probability decline down to as low as 130.
In the interim, price for this exchange (Bitstamp) reached about the 160 level, coming quite close to the vicinity held in forecast.
As price meandered its way down, it did so by defining tops and bottoms, which I defined in the price field as points 1, 2, 3, 4 and 5. Close evaluation of these points will show several important things, such as:
1 - Points 1 and 2 are connected by an a-b-c pattern, where the height of Point-C comes to exactly 1.618 times the height of Point-A, as follows in the chart:
2 - Points 1 and 2 are connected by a zig-zag pattern moving against the main downtrend that preceded it, thus completing a correction at Point-2, as follows:
3 - Points 2 and 3 are connected by an Elliott Wave impulse formation, define internally by waves 1, 2, 3, 4, and 5, where wave-1, 3 and 5 (BLACK) move in the direction of the dominant bearish trend (PINK Arrows), whereas interim retracements in waves 2 and 4 (BLACK) move against the dominant downward trend (as per orange arrows) as follows:
4 - The overall move from Point-1 to Point-5 falls under TWO known patterns:
a -- Elliott Wave's Leading Diagonal, where points 1-2 and points 3-4 are connected by a zig-zag (i.e.: a simple a-b-c pattern, as is the current case), and points 2-3 and 4-5 are connected by an impulse wave (ie.: with internal points enumerable as 1, 2, 3, 4 and 5, such as was just demonstrated above between points 2 and 3, although you should visually appreciate a similar construct between points 4 and 5). If you counted the connection between these points, you would see that points 1-2 and 3-4 are connected by 3 points, or an internal a-b-c pattern, whereas points 2-3 and 4-5 are connected by 5 points, as enumerated in the chart above, such that you would arrive at the following internal construct:
3-5-3-5.
This typifies the Elliott Wave's Leading Diagonal - Please, refer to this link (cut and paste) and review the bottom for a typical example of this Elliott Wave's pattern:
- elliottwave.net/educational/basictenets/basics2.htm
AND
b -- Bill Wolfe's Wolfe Waves pattern ("WW"), which is essentially the envelop of the overall detailed tracing just discussed above. What the WW pattern requires is a set of ipsi-directional (i.e.: "same direction") lines, which in the chart is define as Line 2-4 and Line 1-3 (I would typically leave 5 out of the count, since it completes automatically at the intersection of the 1-3 Line, although it can also complete under the name of "five-prime" or even "five-second", given a certain set of conditions.
In the tweet I posted, I referred to this "five prime", written as 5', which is defined as follows:
1 - Draw the 2-4 Line and the 1-3 Line.
2 - Copy the 2-4 Line, and place its beginning right at Point-3.
3 - This new 2-4 Line projection is now called the Target Line, or Profit Line, and will define Point 5' upon price validation of this line.
4 - A 5-second, or 5" will most rarely be defined the same way, except that in this instance, you would need to place the copy of the 2-4 Line and make it start off of Point-1.
Now, here are important rules about this pattern:
1 - Points 1-2 should be FARTHER apart than points 3-4
2 - Point4 should exist WITHIN the range of Points 1 and 2
3 - The lines defined by these points should be referred to as Line 2-4 and Line 1-3
4 - Line 2-4 and Line 1-3 should CONVERGE always
5 - IF Lines 2-4 and 1-3 converge DOWNWARD (as in this case), expect a significant rally to occur ONCE price reaches point-5 (RARE), or Point-5' (MOST COMMON), or Point 5" (RAREST EVENT) - This would constitute a BULLISH WW
6 - IF Lines 2-4 and 1-3 converge UPWARD (opposite to this case), expect a significant rally to occur ONCE price reaches point-5 (RARE), or Point-5' (MOST COMMON), or Point 5" (RAREST EVENT) - This would constitute a BEARISH WW
7 - A NEW line should be defined, connecting Point-1 and Point-4, as follows:
Just as a point of recollection, here is the tweet I posted, for which you owed you a bit more clarification:
BTCUSD: As forecast completed, now look for 5' validation vs. 1-3 Line transgression:
@TradingView BTC #bitcoin
Now that you know what Point-5' means, and what the 1-3 Line refers to, it should come within reason that what we need to expect is:
1 - Either a continuation to the upside, across the 1-3 Line
2 - Or, a continuation of the decline towards completion of Point-5', which we now know to validate only ONCE price crosses the copy of the 2-4 Line projection originating from Point-3.
As a general rule, and as define above, the MOST COMMON manifestation of the WW pattern is via a 5-prime completion. So, my inclination here would be to wait for this completion to occur.
Also, and this is for the most CONSERVATIVE traders in our TradingView community: The 1-4 Line is supposed to be the Take-Profit, or "TP" line. However, I would recommend taking full or partial profit IF and ONCE price reverses to the former level of Point-4, as per this illustration:
OVERALL:
We just reviewed a few fundamental concept which I apply in my structural and pattern analyses, namely:
1 - Basic geometries and Fibonacci correlations;
2 - Basic wave count and Elliott Wave pattern with internal construct
3 - Advanced pattern in WW and complex target projection in alternate points 5' and 5" and final TP line.
If you have any particular question on this or other advanced patterns, technical analysis or occult geometries, feel free to contact me. I appreciate the thumbs up as a measure of how well I reach out to the astute and learning crowd in this fine community.
I appreciate your readership and support.
David Acindor
Predictive Analysis & Forecasting
Denver, Colorado - USA
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Twitter: @4xForecaster
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