Nice tight consolidation pushing into a major inflection point around 20k so are we setting up for a break-out to 24k or a fake-out to 16k?
Lingering at resistance is often a sign of strength, since selling pressure is absorbed by willing buyers looking to buy any dip. This is what creates all the patterns people focus on with no concept of what is going on with order flow.
Order flow is always the best indicator of the next move, but often we get into these periods where the next move is about as clear as mud. This is where we look at minor support and resistance levels for clues to the direction of the next move.
IF sellers can take out 18650 looking at a push back towards the magical 61.8354675% retrace, just kidding, back to support around 17,650. Need to see buyers step back in there if we take out the low of the range. This is where we had prior buying activity that not only pushed us to the November high, but saw continued buying after the Thanksgiving dip. Take out this level and we are likely in for a broader correction and a push back into the 14,500-16k support zone.
IF buyers can push through 19550 or essentially 20k, this is likely to trigger some short covering, attract media attention, suck in break out buyers and those now into full FOMO, pushing us into the 24k area potentially. There is the potential for a fake-out around 21,500 but at this point, if we take out 20k (implying a close above and the next candle takes out the high) it should push higher sooner than later. In other-words should be a pretty decisive move higher.
The longer we consolidate here the stronger the move will be when the the upper or lower range is broken. More and more sellers are pulled into the upper range, and more and more buyers are pulled into the low of the range, equating to a rush for the exit when the breakout inevitably happens.
Many ways to play this, a long on a breakout using a Buy Stop is what we are looking at, or selling some inventory on the breakout to the downside looking to buy back at lower prices. Not a fan of selling inventory and attempting to buy back as the move may be short lived, or fakes-out to the downside then breaks the upper range and pushes higher.
We built up some cash recently so if the market pulls back, we have some powder to buy, if it pushes higher, well we are still 90% positioned in the market and will benefit from the move, though not 100%. Nothing wrong with getting 90 cents on the dollar, I'm happy with that.
Daytrades - Scalping the lower or upper end of the range, tight stop just above or below the range.
Swing Trades - Wait for a break of the range, stop should be around mid range or the other boundary.
Investors - HODLING here and if it pulls back I'll buy some more.
Long term the market is pointing towards higher prices, short term it is about as clear as mud. Best thing to do is nothing unless you are a more aggressive trader.
Lingering at resistance is often a sign of strength, since selling pressure is absorbed by willing buyers looking to buy any dip. This is what creates all the patterns people focus on with no concept of what is going on with order flow.
Order flow is always the best indicator of the next move, but often we get into these periods where the next move is about as clear as mud. This is where we look at minor support and resistance levels for clues to the direction of the next move.
IF sellers can take out 18650 looking at a push back towards the magical 61.8354675% retrace, just kidding, back to support around 17,650. Need to see buyers step back in there if we take out the low of the range. This is where we had prior buying activity that not only pushed us to the November high, but saw continued buying after the Thanksgiving dip. Take out this level and we are likely in for a broader correction and a push back into the 14,500-16k support zone.
IF buyers can push through 19550 or essentially 20k, this is likely to trigger some short covering, attract media attention, suck in break out buyers and those now into full FOMO, pushing us into the 24k area potentially. There is the potential for a fake-out around 21,500 but at this point, if we take out 20k (implying a close above and the next candle takes out the high) it should push higher sooner than later. In other-words should be a pretty decisive move higher.
The longer we consolidate here the stronger the move will be when the the upper or lower range is broken. More and more sellers are pulled into the upper range, and more and more buyers are pulled into the low of the range, equating to a rush for the exit when the breakout inevitably happens.
Many ways to play this, a long on a breakout using a Buy Stop is what we are looking at, or selling some inventory on the breakout to the downside looking to buy back at lower prices. Not a fan of selling inventory and attempting to buy back as the move may be short lived, or fakes-out to the downside then breaks the upper range and pushes higher.
We built up some cash recently so if the market pulls back, we have some powder to buy, if it pushes higher, well we are still 90% positioned in the market and will benefit from the move, though not 100%. Nothing wrong with getting 90 cents on the dollar, I'm happy with that.
Daytrades - Scalping the lower or upper end of the range, tight stop just above or below the range.
Swing Trades - Wait for a break of the range, stop should be around mid range or the other boundary.
Investors - HODLING here and if it pulls back I'll buy some more.
Long term the market is pointing towards higher prices, short term it is about as clear as mud. Best thing to do is nothing unless you are a more aggressive trader.
