ETHUSD Perspective And Levels: Minor Retrace Next Bullish Swing.

17 thg 8, 2017

ETHUSD Update: 306 resistance taken out, but 315 still holds. Is this a giant head and shoulders reversal? I've mentioned this before and I will address it again. In terms of Elliott Wave, I am evaluating this current bullish swing as a subwave 1 of the larger degree 5.

Let's begin with the head and shoulders. I keep getting questions about it, and my evaluation is this: Within the context of the BIG picture, counter trend chart patterns carry little weight. I didn't learn this lesson from a book. If you lost as much money as I have shorting strong markets on these types of patterns, then you would have a better understanding. The underlying structure of this market is bullish. To add to that argument, the head and shoulders has appeared within a broader Wave 4 which means there is a higher likelihood for a Wave 5 to unfold which can take this market into the 350s.

Now in terms of wave counts, I am labeling this move as a subwave 1 of the larger 5. This means a subwave 2 is likely to follow which can lead price back to the mid 280s. This is NOT a prediction, just a possibility based on the proportion of this up swing. As long as price does not fall below the 270s, this market will remain poised to break the 315 resistance, even if a minor retracement gets in the way. That is why I see no reason to adjust my current long position.

In summary, do not be distracted by chart patterns and/or opinions of others if they are not in line with the bigger picture. In order to PROVE a "head and shoulders" is in place, support levels need to be broken and so far they hold. Also the bullish structures that are in place, continue to be untested, which implies strength. Remember financial markets are fractal in nature and this means not all information is weighted equally. In the context of a strong market, bearish reversals or signals on smaller time frames carry less weight. Price will have to make some serious moves lower in order to prove that a real change is taking place. Listen to the market.

Questions and comments welcome.