Disclaimer: This is not meant as financial advice and is for entertainment purposes only.
Yesterday we examined the EMA’s crossing over on shorter time frames, the bullish setup on the 4 hour Ichimoku Cloud , as well as the reasons that kept me out of the market while awaiting further development.
Today we are going to look at a few reasons why this market could have found a bottom as well a few reasons as a few reasons why it might not have.
Let’s start with the good news and end with the cautionary!
There are two indicators that signaled the bottom of the last bear market, prior to the year and a half of consolidation. It was a red 9 on the weekly TD sequential and and a cross on the weekly Stochastic below 12.
We haven’t gotten the 9 yet, but fingers are crossed that it will come on this drawdown. If it doesn’t then I expect we have another painful 2+ months in our near future.
Now let’s take a look at a chart that I posted on Twitter (same screen name) on 6/11.
It is cut off in the picture but the next arrow was straight down to $5,000. The top of that channel is serving as strong resistance and it isn’t alone. There is established horizontal resistance from $6,750 - $6,792 and we can see that it is significant when looking at the visible range volume profile on the daily chart.
Building a short with a stop loss at $6,830 with a $5,000 target provides a nice risk:reward. However there are too many oversold indications on the higher time frames - such as the C-Clamps on the daily Ichimoku Cloud and the distance away from the 200 day MA.
Now that the bullish indicators are starting to build you might be considering building a long. If so I would suggest using ½ of your position sizing due to betting against the trend and also entering in thirds upon the following confirmations: Red 9 on the weekly | Crossover on the 12 & 26 day EMA’s | Golden cross on the 50 & 200 period MA’s on the daily chart .
Be like a chess player, always thinking moves in advance and rarely getting caught off guard!
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Yesterday's Post - Day 130
Trading Challenge - Day 117
Weekly Gold Update - Week 15
School - Options 101: Limited Risk with Unlimited Reward | Intermediate Trading Strategy | White Paper Cliff Notes: AION | Intro to Indicators: Stochastic | Bitcoin Market Cycle
Need a break? Read some Poetry! - I Believe | Aliens | The Universe is a Hologram | Sunset