A look on two timeframes; what's next?

4 thg 7, 2018

Let's first take a look on the 2h chart. I think we've just built a diagonal minor 12345 uptrend wave pattern. We are still in the uptrend channel created by waves 2 and 3, a little steeper than the older and larger uptrend channel. This diagonal wave pattern pushed us out of the long term downtrend channel with the very first pump, just after a higher low at $5800. Wave 5 has broken up just at the outmost circle of created by the double bottom pattern, and the resistance zone above $6600 seems to have stopped it. Now some other circles seem to want to push us down; is it a corrective wave pattern or a new downtrend impulse? let's look. First, the retracement seems to have happened already, but the stochastic RSI bear cycle is just about to begin. A bearish divergence has just happened on the 2h RSI and CCI, and seems to be forming on the stoch RSI. Therefore if the $6650 resistance
will not hold as support, this first wave might be a long one.
And now the daily chart (below): we can see the uptrend started on a bullish divergence, but a hidden bearish divergence has recently formed on all indicator channels, signaling that the global bear trend is not yet over. Moreover, the stochastic RSI has already started a bearish cycle since yesterday, even if today we've been still headed up. This morning we were still after a bearish harami candlestick pattern, but if today's candle will not close below $6600, we are going to make a bullish engulfing pattern. So another run up might still be possible.
Taking all these into account, it might take yet some time for the market to decide, but we are soon about to find lower prices. If the daily bear cycle will not end below $6000, I think it would be a good time to go long (if you aren't already); only with caution, cause the bear market is not over if we don't cross $7000.

5 thg 7, 2018

Ghi chú

The big blue circle called us down, as expected. The potential bullish engulfment on the daily was invalidated. But going sideways since then. Let's see if we have some move at the red 2.618 fib circle. The daily chart stoch RSI is still saturated on top, a more serious drop than the previous would be very likely, if not in this 2h bear cycle, then in the next.

5 thg 7, 2018

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I've placed new circles describing support/resistance evolution of waves 4-5 and beyond. The drop that just happened (see below) was at the limit of 1.0 circle; so it was well placed. We dropped down to 0.618 fib level of the whole uptrend, and the 2h chart requires now a minor bullish cycle. But on the daily chart the bear cycle seems to just start (not yet very visible) so this minor bullish cycle shouldn't get us very high, except if new manipulations happen. I would expect a real bullish retrace only after the end of the daily chart bear cycle; still a few days for that, I think. Let's see.

6 thg 7, 2018

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The circles did their job, we had a retracement. If we are in a corrective minor abc pattern, as in the image below, this is as low as we can get, then we might climb on a bullish wave 3. However the daily chart bear cycle didn't start yet, so this would rather be a 12345 downtrend wave pattern heading to $5700 or lower...

10 thg 7, 2018

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Wave 5 was a bit longer than I've initially thought. As expected since quite a week, the bear cycle on the daily chart has just started.
Lots of longs liquidated, predictable, and the bear cycle is only at the beginning.
On the 2h chart we see where the circles pushed us down, rejected by the violet circle and the dotted green downtrend line; now support should come a bit lower. We've crossed all yellow supporting lines. However the 2h chart shows largely oversold stochastic RSI, oversold RSI and a minimum of the CCI, so a bull 2h cycle should begin; probably at the bottom of the lower slope uptrend channel.
It is though impossible to know if this would have been a corrective wave, or it's just the 3rd wave of a downtrend impulse. If we don't retrace from above $6200, the fall will be nasty; or is this the retrace for bullish reversal?

11 thg 7, 2018

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Some circle patterns were already crossed and lost influence - I've deleted them.
Now we just exited from a big circles set after crossing a confluence of circles which created a lot of small shakeouts; if we can cross the next outer circle without being pushed up, then a new drop should come. We are approaching the top of the 2h bull cycle and the middle of the daily bear cycle, so a minor retrace is possible.
Still not enough data to say if this wave pattern is corrective or down impulse, subwaves are confusing; this must be why many top traders are silent. Anyway, indicators will require a new drop so this looks like a 5 minor waves pattern; in this case the correction will be big and it doesn't quite look like an end of the bear market. Just watch the next drop lower level, it might give some clue. Of course, IF we don't have a wave failure caused by a new pump!

12 thg 7, 2018

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We've been following sideways the top of this new 0.382 green circle who acted as support until we reached the older 3.618 violet circle. Now we went down, and the 0.382 green circle became a resistance. If it holds, we should go further down at least until we reach the bottom of the same circle.

12 thg 7, 2018

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...and look at the same view on the 5min chart so you can see what I mean with better precision. The immediate target would be around $5900, but there would be one more bull-bear alternation left on the 2h chart, we are exiting the uptrend channel and the bear cycle on the daily is not over yet. If the bull cycle on the 2h chart will go sideways again, natural target before the daily bull cycle starts is around $5200.

12 thg 7, 2018

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The 0.382 circle didn't hold as resistance, so we have to go sideways, maybe slightly higher, until we meet a circle with sufficient resistance to send us down in order to end the 2h bear cycle. I think there are little chances to come back inside the uptrend channel now. As we go to outer circles, the probability for larger jumps inside the circles increases, unless we are stopped again on the inner circles.

13 thg 7, 2018

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The bullish cycle on the 2h chart has started almost immediately after my previous update, going mostly sideways as I said, until we reached the big 4.236 magenta circle. There, some traders shorted the market an found some bulls. Since then, we are testing the 4.236 circle as support trying to go up; but the bull cycle is ending and the daily chart bear cycle just at its half still wants us to go down. Was this a bears trick to cheat the double bottom? Let's see.

13 thg 7, 2018

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It seems the bears finally found a circle to push us down and conclude the 2h bullish cycle. It's the 4.618 outer magenta large circle of an older harmonic pattern. Now we have to keep an eye on two lines: the $6000 red support line and the black uptrend line of the lowest bottoms since July 2017; two of these bottoms were recent, and if we cross that line, I'm afraid we're going to have lower lows.

14 thg 7, 2018

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I've deleted the circles pattern whose margin we crossed yesterday, and added two more circles sets: a huge one with all the support circles since the highest point before we went down from $9900 - only got at its half for now - and a smaller one with the support circles since what I marked as wave "iv" retraced down. Now we are traveling on the 0.382 circle of this last set, which will lead us through the 1.618 blue older circle in the cross point with the 3.618 bigger circle. There is a lot of confluence, and I see two possible destinations: a bullish one to hit the dotted green downtrend line, and a bearish one to $5800 crossing the red $6000 line and briefly the black uptrend line. In the first case the daily chart bull cycle should start just at that moment but not with big bullish momentum; in the second case, we might have a bullish reversal at $5800-$6000, but hard to tell how reliable.

14 thg 7, 2018

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After the circles confluence we started prematurely a new bull 2h cycle, broke the resistance of the new 0.5 fib circle and found some support on it. However because of the premature start, bulls seem to be losing momentum, so I doubt they'll be able to reach the dotted green downtrend line without a prior retrace down. At the last try, the 0.5 circle didn't hold as support: now we are on top of it but it will probably lead us down.

14 thg 7, 2018

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Oh, forgot to mention: and the 0.618 circle acted as resistance, so it's that circle that will probably push us down, probably tomorrow.

16 thg 7, 2018

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Well, the 0.618 circle resistance didn't hold. We've crossed all circles one by one, and stopped at 1.0 circle, but this might be only for a while. Stochastic RSI bear cycles do not reach the oversold bottom anymore; I've seen such thing only when we were near the top of the market in June, cause this means retracements are not sufficient to gain enough momentum to climb. Now we are reaching a new confluence of circle, and this might push us to the dotted green trendline, maybe a little more through the $6400 resistance; but at $6500 we should meet the 1.618 circle which often means reversal. There is also a strong resistance zone, I doubt we can cross it.
Meanwhile, the bull cycle has started on the daily chart; but we are still in a hidden bearish divergence there since July 7. Therefore we might have there the opposite situation compared to the 2h chart: bull cycles that don't reach the overbought zone; meaning that bears do not retrace enough to gain momentum.
So, I think we are still trapped in a range for a week or two, but we might reach the bottom of the market soon. RSI shouldl be forced to go down to 20-30 on the daily chart, and that should be the moment to buy long.

17 thg 7, 2018

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Against all odds, we broke the dotted green trendline and the double resistance at $6650 and $6700. As you can see below, it happened just after we crossed the circles intersection point. Not even the 1.618 blue circle couldn't stop us, it just slowed us down a bit. However we are now in a highly oversold RSI and stoch RSI zone on the 2h chart.
On the daily chart, bull cycle is likely at its middle and the hidden bearish divergence is not broken yet. The thin black downtrend line you can see on the 2h chart gives an idea about how up should we go to break that divergence.
That means that probably we are going to retrace down at $6863 where the red 2.618 circle meets the large blue circle of which we only see a segment. That will put us again in a zig-zag wave inside the old uptrend channel, that is now becoming wider and less steep. Market has not yet decided between bulls and bears, and we can only turn fully bearish if the bottom of the larger channel will be broken.

17 thg 7, 2018

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Many traders are noticing the inverse H&S forming on all time frames. However there are three things to consider there:
1) the target of that pattern is below $7500 and there still a lot of resistance below; so we are still trapped in a HUGE hidden bearish divergence.
2) the inverse H&S on the daily chart will be confirmed only above $6850
3) If we don't break up very soon, the bull cycle on the daily will end before we do it; that, together with the circles and the hidden bearish divergence, should push us down.

17 thg 7, 2018

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Conditions 2 and 3 of my previous update happened. Big pump, broke through all circles just in intersection points; these always remain vulnerable points and helped cross all resistances. Now we are at the inner magenta big circle, at 1.618 Fib level of the previous uptrend big wave. RSI on the 2h chart is above 90!! largely overbought! Also on the daily chart the bull cycle should reach the top soon.
Retrace is due now, we have to go lower; let's see how deep. .This was either a wave 3, or a wave C, the retracement will tell us. And I will have to come with a new chart, this one becomes overloaded and I have some circles to delete now.