About meFormer industry pro turned private screen jockey. I help traders expand their knowledge and improve trading confidence. I provide analytics and training in financial markets by way of live streams, videos, analysis, online courses and mentoring.
This correlated move in the last few hours is a bit of a worry. That wedge on the 4hr charts was seen across many cryptos. A break lower can often see momentum and selling volume pick up.
If you are a buyer of dips, it might be better to keep the powder dry for a little while.
It was the best of trades, it was the worst of trades. Look, I had to get that one in.
This update is a quick answer to an email received on CME micro bitcoin futures. To trade or not to trade?
Answer: there are pros and cons here.
Micros are very algo driven with the May contract currently looking heavy from just one participant stacking...
This one can be a volatile spread, and that goes both ways.
The idea is to buy Live Cattle and sell Lean Hogs for a trade that runs May though to August. The reason for this trade is seasonal. That is, there is a pattern that tends to repeat itself each year.
Heading into mid-year, Cattle slaughter tends to be high while Hogs are at the opposite end. But that...
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Next time someone says “the market is about to breakout – just look at this wedge/flag/triangle!”, you have to think “Of course it will break, where else is it going to go?” The market cannot exactly disappear behind the chart, can it?
Nevertheless, these styles of patterns can be interesting and show the mindset of a...
This one is looking like a pretty good textbook head and shoulders top.
A lot of people overuse this this pattern and apply it when it should not be done. The best H&S patterns are tops or bottoms, not mid-trend of middle of nowhere.
This one looks pretty good.
How bearish is it though? If we use that A-B top to bottom range for a measured move, it puts ETH...
Beware of the weak longs and late adopters in this little move. The next break higher looks like it does not have enough pre-move build-up to be sustained.
Moves like this can often take out the ‘buy on break’ traders, namely the ones annoyed they missed the last move (and we’ve all been part of that group). Think, who is left to buy after these guys?
Bitcoin's drab performance on the 4hr charts is pulling many of the others with it, or at least keeping a damp cloth on enthusiasm.
With ETH and a few others still positive, watch for a little pop in XBT and you will likely see the others jump in for a quick ride.
Longer term – within this range, well it’s within a range. That means it’s a bit hard to be...
The 4hr charts have been good to watch for overbought/oversold indicators lately. Here the Stochastics are all saying it’s time for a pullback.
A little outperformance from ETH and ADA on these charts, but all of these big boys risk some profit taking now.
This is a thought of the day kinda article.
In an old episode of Seinfeld, when referring to being offered a free lift, Jerry says something like “Ah the lift, like the lure of the siren’s song. Never what is seems to be but who among us can resist.”
Fast forward to trading crypto and we all see those arbitrage opps right?
That quick trade, if you bought on one...
Delayed correlations showing a classic divergence. That low in BTC is important. A chunky break will see the others turn around and offer a low (well lower perhaps) risk of a healthy short sell.
These are how relative value spread trades are born.
Have a look on your other coins for a similar pattern.
If you remove the first two hours of trading on Coinbase, the performance of the share price looks a lot like the performance of Bitcoin.
It is never going to be 1-for-1 and nor should it, but there is a visible pattern there.
Will there be a spread/arb/reversion trade there? Maybe one day, but a reasonable correlation will allow those that can only invest in...
This is a good spread to trade. If you’ve not traded Corn before, just read on, because this style of spread trading is interesting. It has both technical and fundamental aspects and is built on a history of good stats.
Corn has an annual crop cycle. It’s planted in April/May, subject to weather issues in the following months, then harvested for first delivery on...
Well if you had a sense of humour you’d say this is a nice little channel breakout trade.
Fair disclosure: I totally missed this one too. That's what the gnashing of teeth is for.
Many markets seem to go from one ‘buy/sell rumour, reverse the fact’ to the next. The #DogeDay420 tag seems like it could turn into one of those moments. Too risky to buy here,...
Spreads are complex instruments. This is just an introduction and some ideas to get our brains ticking over. I had started writing a guide to understanding these three types of spreads, but it just got a little long. It might be easier to do it this way:
What do you see above?
Here are some observations to get started:
All spreads topped out well before June...
An interesting spread here. I’ve traded this one on and off over the years. It’s a long-term hold and some years this spread just has a nice smooth trend.
Think of this spread as a cost of carry, in a way. Or perhaps: wholesale versus retail is a better way to look at it.
Feeder Cattle (young moo cows) + Corn (food) + time equals Live Cattle (grown up...
And that’s with emphasis on the ‘caution’.
On one hand we have a history of bargain hunting on dips and that one will probably win over.
On the other hand, the technical picture is one closer to uncertainty or as we say in the markets “This is chop, wanna get lunch?”
The bigger/longer picture is where you see the bullishness.
In the heat of a fast market it's hard to pick levels, but once stops dry up, it's almost like the market looks for levels. Things like previous S&R and key Fibonacci retracement levels, such as this 50% move, can work well.
I see movement like this and am reminded of my time as analyst in the JGBs (Japanese Govt Bonds). That was one crazy market and crazier it...
BTC: What flight to quality means.
You hear ‘flight to quality’ as a term on the news whenever markets fall.
For mainstream markets, it generally means gold, interest rates and blue chips perform better when the proverbial hits the fan.
It doesn’t mean they go up. It means there is less hurt than the ‘non-quality’ markets.
It’s happening now. BTC and ETH are...