ETHUSD 5.84% Update: Stability forming now that two higher lows are in place at the 267 and 276 levels. This allows for a clear definition of risk and a scenario that can lead to a new long position.
At the 267 level there is a bounce that retraces back to 276. This formation is a broad higher low which indicates strength returning to this market. The bearish momentum has failed to push new lows. Plus there is a smaller higher low at the 287 level which signals further stability because higher lows often lead to? Higher highs. Two formations like these within the 296 support level which I have been writing about for a few reports now, are the signs of stability I have been patiently waiting for.
If you observe the ETHBTC market which has been a great source for additional clues, it also has a clear higher low formation in place which adds to the stability argument even more.
What is most important about these structures besides where they appearing is that fact that the market has offered clear reference points to define risk from: The 267, 276 and 287 lows. With this information I can determine if a long swing trade is worth taking. The next question is where is the entry and the target?
A break above 310 is a new long signal because that indicates bullish momentum returning. A long position at 310 with a stop in the mid 280s and a target in the mid 340s offers just over 1:1 reward/risk (and that is being extremely conservative). If there is any positive catalyst along the way, that can push prices further, but for now I am going to use the 350 area as the initial target. The beauty of this kind of trigger is if price never breaks 310, then that means bullish momentum is still limited and there is no trade and no risk taken.
IF instead price decides to break below the key support levels relative to these higher low structures, like 287 or 276, then that would signal bearish momentum is still present and I would wait and see where the market stabilizes again before any further evaluation. Also a break below the 267 low will negate the possibilities of the present stability completely, and open the door to the 230 support zone . This is why it is very important not to take a position too early and wait for a trigger. (Unless you enjoy pain).
Another point I want to make is this: my previous reports have been bearish , and now this one is much more bullish . I do not base my observations on feelings, or my opinion, or what anyone says or writes. I base my outlook on what clues the MARKET provides and I am flexible enough to recognize new information while not getting stuck on ANY opinions. The market doesn't care what I think. So I don't, I "listen" instead.
In summary, this is the kind of price action that my plan forces me to WAIT for before taking a new position after a sell off. It is very challenging because it requires a ton of patience to wait for (it has been a number of days). The only way to achieve this kind of patience is with a well defined plan, and not getting sucked in by the hype, the price noise and your own impulses, fears, and bias. If the context of these market conditions were more bullish , (like they used to be) then the entry criteria would be less restrictive so this is why context is so important for the analytical elements that I employ.