%% Get you a Stock Traders Almanac last 3 or 4 months tend to trend strongest of all year. 1st quarter tends to trend strong for tech stocks . ,PS; Bull market$ have no resistance + that IS what we are in; bear markets have no support. TSLA is in a bear market; QQQ/NasdaQ+ SPY =bull markets. [Best way to lose money, for years is confuse the 2; PE78 .So dont try this @ home]
Markets change their behavior when the majority of public expects the continuation of the trend. Here is an interesting chart for you. Blue lines - FED rate. Gray zones - periods of crisis. Note the downward reversal of the blue line at the right live edge. Will the gray zone will start soon?
Let's take a wide view on Bitcoin/USD market. I use 3D TF and average data from 5 Major exchanges. Read the Chart: 1) No Supply under 9k 2) The surge of demand broke out 9k resistance. So, we have 9k support after 1+2 actions. 3) Buying culmination above 12k. Check Google Trends. "Bitcoin price" was extra-popular on the 25-20/Jun days. This is a sign of FOMO Climax. 4) Bounce up from 9k Support. If the market were bullish, it should overcome the Jun/July highs. However, we got only a fake breakout of 12k level (5) 6) The second bounce up from 9k support. What the result? Price did not even reach 11k. Well, the inability of market to rally after bounces from support line - is the bearish sign. The last 4 red bars have low volume. Why trading activity is low? If market has a lack of buyers (demand), then we should expect the breakdown of 9k line with an increase in volume (supply pressure). In this case (I believe in), the decline should develop down to 6k support.
In the previous post, I wrote: ...we should expect the breakdown of 9k line with an increase in volume (supply pressure). In this case, the decline should develop down to 6k support. So, the bearish journey toward 6k has begun. Actually, it has begun... much earlier. Take a look at the big vertical picture to know what I mean.
%% Nice chart; but most of mine are price + volume, SPY,QQQ..............................BY the way FED raising rates[over time] is more bearish , than your chart shows.But thanks for the chart; 2% + 1% FED rates mark/start a good long uptrend . NOT a prediction, because TSLA is so much in debt [191%] rate cuts seem to help tank TSLA .LOL,
So, what the chart of Gold does tell us? (I use data from Oanda, futures market charts are quite same). On the first view, the eye catches up-trend wave (blue lines). But let's take into consideration volume and its relation with price action. 1) On 13-15/August, we had a spike of volume (red vertical zone). I always stick to high spikes of volume in order to for the story from chart. I plot the red horizontal line at the high of those days - 1535. Since that time we had several attempts to overcome 1535 level. 2) The first attempt. Volume is massive, close on the low - not very optimistic. It is more bearish sign revealing the heavy supply above 1535 level. 3) Next attempt. Close on the highs, but we have only tiny penetration of the previous high #2. Low volume represents the lack of sellers. 4) Next day is big red down bar. There is an important thing - volume. It increases on down bar. You have no bar like this on the chart. 05/Sept was a day when Sellers did appear - they gained a big result actually. This is Bearish change of the character. Supply impulse was too powerful to push price toward the low line of the up-wave channel. On those levels, market has found a bullish party, but... 5) ...after 3 green up-days (20-24/Sept), we got wide down bar (yesterday). It fast erased the progress of previous up-bar and moreover - it formed another attempt to breakout above 1535 level. So, price is approaching back down to support. The unwillingness of market to bounce from support line - a sign of weakness. Taking into consideration mentioned above facts, we can build the following opinion. Definitely, 1535 is powerful resistance. It was started by the 13-15/August extra-high-volume days. So, current Range 1478-1535 could be interpreted as the Distribution Range. If price refuses to breakout on higher levels, it should be interested in breakdown. BTW, Some analysts can find Head & Shoulder (SHS) pattern here. Let it be the confirmation of the Distribution opinion.
Setup for shorting Every market is moving within neverending cycle: ...balanced -> unblanaced -> balanced -> unblanaced -> balanced -> unblanaced -> ... Balanced markets cover 80% of time. Trending markets last 20%. It is hard to understand, but many cycles are developing at the same time on different timeframes. Learn more in Peter Steidlmayer original materials. The zones of balances can be detected on chart as they form the triangle shape. The zones of unbalance forms trending movements (pumps and dumps). The goal of a trader is to find low-risk opportunities. Where do they hide? Think from the point of view of market balances. From my point of view - the rational answer is: sell at the top line (resistance) of the new balance after the previous balance was broken down buy at the bottom line (support) of the new balance after the previous balance was broken up Here is a pair if the BTC chart. On the top side - 30m bars, it shows the triangles of balances. On the bottom side - clusters tick chart. It shows the details and confirmation to open the trade. A lot of green clusters - minor buying culmination. Some sellers are knocking out amid triggering their SLs. Some buyers enter breakout longs. Soon, they both will find they made a mistake. This is your setup for shorting.
First of all, what is the context? Price has been moving inside balancing triangle/wedge AB for several days. (Note, it entered the wedge after falling - this fact increases odds for a bearish escape from balancing wedge - this concept often discussed in classical TA). Second fact - SLKT above 8300. I pointed attention on this Killing of SLs of sellers (and trap for bulls) in Tradunity Main Telegram Chat. So, we had the more weakness on background - this is context. What we had next? 1) Supply wave 2) Supply wave culminated in for of Panic at the level of line B (bottom/support level of balancing wedge). 3) Yes, this is EVRB (small progress for bears) 4) NS (lowering of volume on the level where Panic+EVRB were detected) 5) With a minor sequence of Strength (Panic+EVRB+NS), Bulls tried to push market higher. 6) But their power exhausted quickly. This is No Demand (low volume attempt to go up caused by a lack of buyers). Note, ND appeared just at 50% half way back of decline from SLKT 8350 to Panic 7950 7) SB (I'd like to see higher volume) and confirmation of ND. Bearish Cha Cha. Chart tells you market changed its sentiment. Holding longs became very risky as buyers were not ready to push market above 28/09 SLKT. What's next? 8) An attempt of bears to break down big AB wedge. Volume was extremely high. 9) This bar tells that bearish attempted was about to fail. Because a lot of activity of this bar was registered above the body of minor balance CD. This is bullish sign and chart tells that bar #8 is likely to be a Big Trap for bears with killing SLs under 26/Sept low. So, as bitcoin is trading above 7900, I expect an attempt to break out line A.
You realize, don't you, that as soon as you preface any "How to Read a Chart" discussion with this phrase, you just sucked all the empirical content -- and any hope of scientifically reproducible results -- out of the picture: you just made it, "One man's opinion" and thereby, fluffernutter. Just, y'know, "by the way.".......
Yes, context is important. By the way, bulls are producing an attempt to breakout above line A, as I wrote earlier. Thanks for following this thread.