Many of you went into panic mode today. Should I cover, buy, sell, this could be a huge loss, I can't afford this, crap I need to change my underwear? Raise your hand if you were one of them. I know THE TRUTH HURTS!
Nothing today that happened in the market was unexpected. After posting for a week on BTC' and mentioning OTHER valid paths to look for and "what if" scenarios, one small spike was all it took for you to throw it all out the window and run out into traffic like deer in the headlights. All the chart knowledge, trend knowledge, all the books you read are useless if you cannot control the urge to be impulsive! Tom Baso - “I think investment psychology is by far the more important element, followed by risk control, with the least important consideration being the question of where to buy and sell.” Victor Sperandeo - "The key to trading success is emotional discipline. If intelligence were the key, there would be a lot more people making money trading". These guys are the Bronson's and Helmuth's of trading. Note the least important aspect of trading. Where to buy and sell!
So where are we, did we break the trend? Is this the start of the bull run to 10k? Is the path to $2200 still valid? ONLY the market knows for sure, but as a trader we must look to the charts and decipher what it is telling us, it's our map. Sometimes we misread it, we must learn to recognize this, adjust and exit trades quickly. So on to the chart!
Someone mentioned on my buddy's Sean's blog why we were not using the log charts? Well in short we should be, for longer term trends. So let's take a look. Interesting, on the log chart we have NOT broke the downward trend line and all day I was getting "see it broke the trend". Well it didn't, but you'll see why it didn't matter anyways. We have gone over all the fibb stuff so let's look at the previous 5 wave cycle and see if we can find any comparisons. You will note in the previous two corrections that the bull trend (vert purple line) was confirmed by a strong break of the trend line and bullish confirmation in the RSI. Did that happen today? NOPE. You'll note where the bull failed (the red vert line) we broke the trend but there was no strength which resulted in a bull trap. Well we neither broke the trend, nor did we really have any strength. So what next. You can see I drew a green trend line from the bottom of the past corrections. Interesting the trend intersects the .618 about where we are. Now this is based on the current cycle and not the super cycle we have also looked at. But the numbers are still valid and actually validate our longer term trend. So other than an impulse trade, why are YOU bullish now? I'm not. The more I look the more the chart confirms my thinking. Now it's my thinking and it may differ from another. That's what makes a market. YOU must determine for yourself the market trend, and I recommend you do so and here's why.
If your looking for buy sell signals, your not a trader, your a follower. Now I always look to other analysts for their opinion and insight. Maybe I did miss something. Many have valid points, but at the end of the day, I never panic, and I depend on my own skills and techniques to trade MY money. You should too. Don't depend on me or anyone else, that's a fools game. You can learn from others which is what you should be doing, but taking some of these "trades" are crazy. I saw one that had a risk of $600 and a reward of $400. Really? And some took that bet and wonder why their stack is going down. Watch who you follow, and do not follow blindly.
In closing if you were a deer in the headlights today. QUIT GAMBLING. I can tell that many of you had too much BET on the market direction. You know who you are. Keep doing that you will end up as ROAD KILL! I can Guarantee that! If one hour or one day in the market matters to the success of your account, your gambling and you better change it quick or you'll be broke.
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Please understand there are numerous different ways to apply EW counts. If you think your right and everyone else is wrong then by all means post your count. However blasting someone elses, without opening yours up to scrutiny goes to the heart of your integrity or lack there of. This is the overall count I have posted weeks ago. Nothing has changed at this point to make me modify it. The path to C is never direct and corrections are difficult to trade hence I state, if you do not understand, your best strategy is buy and hold.
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Note the RSI indicator has not bottom yet either as it did in the previous corrections. These are the little things that separate great traders from good ones. rely on one signal, one method, your setting yourself up for failure. this is a major correction in a bull run and we would expect to see the RSI return to where it did in the past bull run corrections.
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This was a post from another analysts. This should be a lesson to not jump the gun so quickly and read your own analysis before condoning others. A lesson that sometimes you want to believe so much you ignore the obvious like the MA are negative or neutral, Like the ULT RSI is not bullish yet, and then focus on a count you want to believe, i'm sorry HOPE will happen. But at least he opened his chart to criticism. I will also note that most are posting this pattern as of yesterday. If you look back I mentioned this was a valid count over a week ago. This should also remind you to never negate alternate paths, to validate your own.
Thanks for posting Pato99
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By the way I would not recommend following him, very rude and arrogant. There are many good analysts out there to follow and I have recommended many. I never follow an analysts that thinks they are the only one right and tries to prove it by name calling, and bashing your works, ignoring the errors in theirs.
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When bulls become steer, watch for the doji to develop!
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Boy the Bulls are quiet!
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I caution here but I have sold the position I covered at $3500 with a target of $3500 but if events change I will buy back quickly. Again the overall short is less than 1% of my portfolio not my entire position. losing 10% on 1% is not a hit. Losing 5% on 50% is! This is crucial money management, and again I'm looking for small gains to reduce my overall costs. I'm happy with $3650 if it gets there and i will be monitoring closely for any changes.
Quite possibly you are correct and this does go down again, however I think there are some major flaws in your analysis. This is a log chart also:
- We can see that the last 2 lows we've had in 2017 did not touch the previous correction line underneath, so expecting this one to touch it before we can go up again is unreasonable, and would actually probably be a signal that the uptrend is over.
- On 2/3 of the last downtrend-line breakouts, the daily RSI was well below 60, and only climbed up to 60 after breakout. No reason to expect this one to be different.
- All major exchanges in other countries and most USD exchanges have already broken the Log downtrend line and just waiting for Bearfinex to follow.
- Daily MACD is on the verge of crossing bullish.
So, yes we could still go down and see lower lows, but it's quite possible we can go up from here as well. You seem to be doing exactly what you warn others not to do - being completely stuck to the one opinion and not considering other options. BTC does not have to go down again, previous price action from this year would suggest that the bottom is in and we go up from here. But, it's also very possible to go down further if higher highs don't come soon.
cryptographic1
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Here's the chart with MACD
goldbug1
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@zmm20, Thank you for a clear and concise alternate opinion. I appreciate and respect that very much. I'm not sure I agree with your trend lines. But to answer your questions:
- (We can see that the last 2 lows we've had in 2017 did not touch the previous correction line underneath, so expecting this one to touch it before we can go up again is unreasonable, and would actually probably be a signal that the uptrend is over.)
This is because the last two correction lines were corrections in the 3 and 5th wave, after the 5th we normally correct back to the overall trend. I also used the linear regression line prior to wave 3 and 5 as a trend line and we have not corrected to this either. This is in line with EW and FIbb. In addition we are in a super cycle as posted in the 1st graph below the article, this is the IV wave, and most corrections have been the .618 so we are looking for it to correct in the supercycle the same as it has in the mid and short term cycles. do you agree we are in the IV wave of the supercycle starting in 2013? Or has this been discarded. I cannot discard this as a long term cycle, and hence the main difference in our thinking.
- (On 2/3 of the last downtrend-line breakouts, the daily RSI was well below 60, and only climbed up to 60 after breakout. No reason to expect this one to be different.)
Expectation is one thing, where it is at is another. Also the first one in January did not break 35 so in my opinion that does not count. but regardless look at the slopes compared to the struggle. Again I do not trade assuming it will get there I only trade when it does. So you agree we are bear, your just assuming it will turn bull based on hope and not what the current trend is. I do not invest on hope!
- (All major exchanges in other countries and most USD exchanges have already broken the Log downtrend line and just waiting for Bearfinex to follow.)
I'm not sure we are on the same page there. When I mention break through I mean with either strength, and or break through retest and go higher. touching the line in my opinion does not constitute a break in trend only an attempt and failure I have mentioned this in other articles, breaking the trend means strong movement through and or slow movement with a retest of the trend line then moving higher. If it breaks through and then falls back under this is a failed break. This is very bearish as it could not sustain the breakthrough and failed quikcly.
- Daily MACD is on the verge of crossing bullish. On the verge and both in a powerful up trend with angles over 30 degrees are two separate things.
Overall your assuming what might happen, I'm trading what is happening now. That is the main difference, but here is how I have the trend lines, and I have been drawing these since I had to plot on graph paper from the stock page in the newspaper.
@goldbug1, What a good debate that shows an explicit analysis there, my man! I know for sure that you would not change your view as we are on the bearish trend ;)
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@zmm20,
This is a comparison after the first major cycle of the RSI, I would be more likely if I was looking at a historical pattern that this will be the pattern which is different from the shorter cycle patterns.
Again thank you for your posts very nice analysis and at the end of the day we can agree to disagree that is what make a market.
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@goldbug1, some awesome discussion here. Very educational guys. <3
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@goldbug1, Thanks for the reply, I'm not saying I'm definitely bullish, just saying this could easily turn bull here and is worthwhile not to be too locked in to bearish thinking. Indicators will follow quickly if price moves strongly.
Looking at prices in other countries shows that BFX is definitely much more bearish than everywhere else, and it's a pressure vessel that could pop soon
cryptographic1
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I mean... this daily chart looks pretty bullish to me to be honest. Pretty sure we're going up
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@zmm20, Yes broke the trend line, it has now become support, as stated earlier I'm not fond of the MACD for cryptos, but they are close to sloping up, I really want to see the RSI break 80 before I run with the bulls. To me that is critical. But valid points!
- We can see that the last 2 lows we've had in 2017 did not touch the previous correction line underneath, so expecting this one to touch it before we can go up again is unreasonable, and would actually probably be a signal that the uptrend is over.
- On 2/3 of the last downtrend-line breakouts, the daily RSI was well below 60, and only climbed up to 60 after breakout. No reason to expect this one to be different.
- All major exchanges in other countries and most USD exchanges have already broken the Log downtrend line and just waiting for Bearfinex to follow.
- Daily MACD is on the verge of crossing bullish.
So, yes we could still go down and see lower lows, but it's quite possible we can go up from here as well. You seem to be doing exactly what you warn others not to do - being completely stuck to the one opinion and not considering other options. BTC does not have to go down again, previous price action from this year would suggest that the bottom is in and we go up from here. But, it's also very possible to go down further if higher highs don't come soon.