Short Term Target $7K; Mid Term Target $11.6K
Ok as per my last analysis, we have had our break to the upside of the symmetrical triangle. Mid term our overall target for the long term descending narrowing wedge (shown by the purple lines) is $11.6K before a decent retrace occurs.
Right now though let’s worry about the short term target of $7K. A look at the charts shows us we have the yellow resistance line just above us. We are also oversold on multiple time frames. I think from here we will cool off just for a day, and hover between the yellow resistance and grey resistance turned support line. We could potentially wick back below the grey line for a bit of stop hunting action.
I am still long, and have more buy orders set to increase my position. These orders are placed just above the grey line around 6665ish (highly probable we will hit this) as well as below the grey line laddered in between 6600-6660 (probable but not as likely as above).
Once we break the yellow line, the next resistance is the orange line. We historically haven’t had any problem breaking this, so its doubful we will find any real resistance again this time. From there we will probably hit the purple down trend line and it is at this points shorts will undoubtedly increase as many people will feel we will hit resistance and head back down to the bottom. The thing is that this time, we won’t!!
When we finally hit the purple resistance line we could face anyone of the following scenarios to be mindful of:
1) Break out above the purple resistance which will then turn into a fake out; which will then turn into a fake fake out scenario and confirm the actual breakout! Confusing somewhat, but used to generate a heaps of shorts to fuel the next leg up.
2) Hit resistance and range between the purple resistance and orange support line; before ultimately breaking out.
3) Simply break out and stay out (though it is highly likely that whenever we do actually break out we will retest the break out point as new support not too long after. This would represent an excellent buy zone for a buying last resistance strategy)
4) Any combination of the above!
Cheers
Right now though let’s worry about the short term target of $7K. A look at the charts shows us we have the yellow resistance line just above us. We are also oversold on multiple time frames. I think from here we will cool off just for a day, and hover between the yellow resistance and grey resistance turned support line. We could potentially wick back below the grey line for a bit of stop hunting action.
I am still long, and have more buy orders set to increase my position. These orders are placed just above the grey line around 6665ish (highly probable we will hit this) as well as below the grey line laddered in between 6600-6660 (probable but not as likely as above).
Once we break the yellow line, the next resistance is the orange line. We historically haven’t had any problem breaking this, so its doubful we will find any real resistance again this time. From there we will probably hit the purple down trend line and it is at this points shorts will undoubtedly increase as many people will feel we will hit resistance and head back down to the bottom. The thing is that this time, we won’t!!
When we finally hit the purple resistance line we could face anyone of the following scenarios to be mindful of:
1) Break out above the purple resistance which will then turn into a fake out; which will then turn into a fake fake out scenario and confirm the actual breakout! Confusing somewhat, but used to generate a heaps of shorts to fuel the next leg up.
2) Hit resistance and range between the purple resistance and orange support line; before ultimately breaking out.
3) Simply break out and stay out (though it is highly likely that whenever we do actually break out we will retest the break out point as new support not too long after. This would represent an excellent buy zone for a buying last resistance strategy)
4) Any combination of the above!
Cheers
Komentarz:
Komentarz:
Ranging as expected. The range appears a little tighter than I highlighted, however we haven't had a touch of the grey support line yet at around the 6660-6670 level. I expect this will be coming shortly so still have my buy orders set here. I have also amended some to be slightly higher at around 6695.
Komentarz:
Ok so just a quick update... We had a fake out above the range earlier today, and just now we finally wicked below the grey support line at the bottom of the range. As mentioned earlier; this was completely expected and has fulfilled my buy orders in the 6640-6670 range.
In terms of my personal position - I still have more buy orders placed further below the grey line. Before we move up there will definitely be some more stop hunting action occur; and when this stop hunting does occur - we could wick as far down as 6600 (or possibly lower). Therefore my remaining longs are laddered in at $10 intervals between 6550 and 6670.
One last note: The move we have just had towards the bottom of the range has not been supported by any real volume. What it does do is allow us to recharge (as shown by the RSI) for the next leg up. It also leads to a lot of people FOMO shorting which will ultimately help fuel the next leg up. Cheers
In terms of my personal position - I still have more buy orders placed further below the grey line. Before we move up there will definitely be some more stop hunting action occur; and when this stop hunting does occur - we could wick as far down as 6600 (or possibly lower). Therefore my remaining longs are laddered in at $10 intervals between 6550 and 6670.
One last note: The move we have just had towards the bottom of the range has not been supported by any real volume. What it does do is allow us to recharge (as shown by the RSI) for the next leg up. It also leads to a lot of people FOMO shorting which will ultimately help fuel the next leg up. Cheers
Komentarz:
As per my last update, we had some stop hunting occur almost as if on cue. We wicked all the way down to the 100MA which would have caused a shit load of liquidations. The good thing now is that the 50 MA has caught up to us and is also trending above the grey line. This means we have a nice level of support beneath us. It won't be very long now until we attack 6900 and the orange line.
Komentarz:
Having a look at the chart again, I had forgotten to mention the grey dashed resistance line formed from connecting highs of 8th, 9th and 14th of September.
As you can see it is actually in a position where if we break out of the range within the next 10 hours (which is starting to look set to happen!) then the orange resistance line will have the additional resistance provided of the grey dashed line which is converging as indicated by the green circle. This means that we might not simply smash through it as we previously have in the past.
Another development that I am keeping my eye on in the potential of a short term bearish ascending narrowing wedge forming as highlighted in the screen shot below by the light blue shading (with pink border). If this forms, and we hit the now strengthened resistance of the grey and orange lines; then we could see our selves tumble back down to the 6700ish levels. This move could also fuel more shorts to fuel the next leg up, so it would essentially be a positive move despite a lot of people saying 'Bear market confirmed!' 'Going to zero!' etc etc.
This scenario is not at all guaranteed so I must again stress that it is only something that 'could' develop based on what I am currently seeing on the charts. So just be wary of it; especially if longing at high leverage close to the current prices. If it does play out I might start a new chart, which will closely follow the below pattern and arrows rather than keep adding updates to this one. Overall though, we are still on track to meet our target of 7-7.5K. Cheers.
As you can see it is actually in a position where if we break out of the range within the next 10 hours (which is starting to look set to happen!) then the orange resistance line will have the additional resistance provided of the grey dashed line which is converging as indicated by the green circle. This means that we might not simply smash through it as we previously have in the past.
Another development that I am keeping my eye on in the potential of a short term bearish ascending narrowing wedge forming as highlighted in the screen shot below by the light blue shading (with pink border). If this forms, and we hit the now strengthened resistance of the grey and orange lines; then we could see our selves tumble back down to the 6700ish levels. This move could also fuel more shorts to fuel the next leg up, so it would essentially be a positive move despite a lot of people saying 'Bear market confirmed!' 'Going to zero!' etc etc.
This scenario is not at all guaranteed so I must again stress that it is only something that 'could' develop based on what I am currently seeing on the charts. So just be wary of it; especially if longing at high leverage close to the current prices. If it does play out I might start a new chart, which will closely follow the below pattern and arrows rather than keep adding updates to this one. Overall though, we are still on track to meet our target of 7-7.5K. Cheers.
Komentarz:
One final update for the night (it's 8pm AEST here in Australia) - The recent price action has added more weight to the possibility of the light blue short term ascending narrowing bearish wedge scenario playing out. We have the 50 MA giving us support along the lower support line of the wedge, and the recent move upwards suggests we are within 10 hours until we go for 6900.
The more I look at this scenario, the more it makes sense. Once we hit 6900 and our grey dotted/orange line resistance; we might sit slightly above the orange line and try and break through the grey dotted line. Longs will increase at this point as many will expect us to next attack the purple downtrend line at just over 7K. I suspect thought, that we will range between the orange line and the grey dotted line for at least a day before breaking the support of the wedge and dropping back down to 6700ish. Here we should meet the 100 MA converging with the grey solid support line which would give us strong support. A retest of the 100 MA in this way would completely make sense, and it would also allow for a lot of funding by first liquidating the high leverage longs who got in around 6900, and then the shorters who shorted from 6900 and hadn't closed yet.
Again this isn't confirmed, and is purely just a theory at this stage. I will wait and see what happens when we hit 6900. If we can't break it and start to get close to the lower support line of the wedge (the right hand side of it) then I will be looking to close some of my long position in anticipation of re-buying more at a retest of 6700.
The more I look at this scenario, the more it makes sense. Once we hit 6900 and our grey dotted/orange line resistance; we might sit slightly above the orange line and try and break through the grey dotted line. Longs will increase at this point as many will expect us to next attack the purple downtrend line at just over 7K. I suspect thought, that we will range between the orange line and the grey dotted line for at least a day before breaking the support of the wedge and dropping back down to 6700ish. Here we should meet the 100 MA converging with the grey solid support line which would give us strong support. A retest of the 100 MA in this way would completely make sense, and it would also allow for a lot of funding by first liquidating the high leverage longs who got in around 6900, and then the shorters who shorted from 6900 and hadn't closed yet.
Again this isn't confirmed, and is purely just a theory at this stage. I will wait and see what happens when we hit 6900. If we can't break it and start to get close to the lower support line of the wedge (the right hand side of it) then I will be looking to close some of my long position in anticipation of re-buying more at a retest of 6700.
Komentarz:
Note: I have ghosted in where I see both the 50 MA and 100 MA tracking in this scenario.
Komentarz:
Have created a new analysis with a bit more detail around possible alternative scenarios here:
Long story short, I am seeking to take profit from my longs around 6900 and re-enter at 6700ish. Worst case scenario is taking profits too early, which means that we break out of the purple long term down trend line and I am not in a position. If this does occur, then I will simply rebuy on the re-test of the down trend line as support; so all will good regardless.
Long story short, I am seeking to take profit from my longs around 6900 and re-enter at 6700ish. Worst case scenario is taking profits too early, which means that we break out of the purple long term down trend line and I am not in a position. If this does occur, then I will simply rebuy on the re-test of the down trend line as support; so all will good regardless.
Komentarz:
Ok, so our immediate term pattern has been invalidated, which is actually great news. This means it is more likely we will range for another 14 hours or so, before having our go at the orange resistance line. This also means we will not have the convergence of the orange and grey lines to contend with and thus are more likely to break the orange line and stay above it. If that happens it is likely we will range close to the long term downtrend line testing it multiple times before breaking it. This scenario is indicated by the pink arrows.
I am still being mindful of the grey channel forming if we break any of the expected supports.
I am still being mindful of the grey channel forming if we break any of the expected supports.
Komentarz:
Ok, having a look at the four chart - we are now at the edge of our ascending light blue wedge pattern. I'm now looking to see whether we validate or invalidate the pattern. This is dependent on whether we break through the support line.
On the one hour chart we are currently ranging between the 50MA and 100MA so we need to make a decision as to our direction very soon. Whereas on the 4 hour chart we are trending well above both MA's; so could easily have a drop back down to the support of the 50 MA at around 6522. On the flip side we also have what could be a bull flag forming as shown in white.
How I am playing this... I have set some buy orders laddered in between 6500-6600 in case we break support and fall to the four hour 50 MA/Grey channel support. If we do fall to the 50 MA/Grey channel support it would actually be a good thing, as it would invalidate the bearish ascending narrowing light blue wedge pattern which threatens to send us back down to 6350ish.
For my existing longs, I have raised my take profit target to laddered levels between 6965 and 7150 to take advantage of the potential bull flag. It is worth noting that if we do shoot up and do not break out to the upside of either the purple long term down trend line or to the upside of the light blue ascending wedge, then the wedge could still potentially take us back down to 6350. So just something to be mindful of.
On the one hour chart we are currently ranging between the 50MA and 100MA so we need to make a decision as to our direction very soon. Whereas on the 4 hour chart we are trending well above both MA's; so could easily have a drop back down to the support of the 50 MA at around 6522. On the flip side we also have what could be a bull flag forming as shown in white.
How I am playing this... I have set some buy orders laddered in between 6500-6600 in case we break support and fall to the four hour 50 MA/Grey channel support. If we do fall to the 50 MA/Grey channel support it would actually be a good thing, as it would invalidate the bearish ascending narrowing light blue wedge pattern which threatens to send us back down to 6350ish.
For my existing longs, I have raised my take profit target to laddered levels between 6965 and 7150 to take advantage of the potential bull flag. It is worth noting that if we do shoot up and do not break out to the upside of either the purple long term down trend line or to the upside of the light blue ascending wedge, then the wedge could still potentially take us back down to 6350. So just something to be mindful of.
Komentarz:
Grey Channel it is!
Komentarz:
The important thing to note about scalping is to always go with the overall direction that you expect the price to ultimately go. Eg. Whilst it might be tempting to go long from say 6660-6760, then short it back to 6660 and rinse repeat; the breakout can always occur early and when it does you do not want to be caught in a short position. Therefore even thought I suspect the price will go to 6760 and then back down to 6660 a few times, I will long from 6660 and take profit at 6760 and then set another buy order at 6660 again. It is too risky to try and scalp shorts when I know the price can go up suddenly without warning.