************** Trading Alert *****************
Look at this folks.
This is the 1-Week DRK /BTC MACD (Moving Average Convergreance / Divergence) histogram. Basically, 1 bar lasts 1 week, so it's very long range.
This is where we're at right now in the long game. We've been correcting heavily since the big high back in June and the simple fact of the matter is that it takes months for a huge revaluation like that to properly consolidate.
But, as you can see, we're approaching the end of this correction. Maybe a couple of weeks - possibly a few more if we are to take the pessimistic view - but all the same, the pattern's unambiguous. The selling momentum is slowing every week.
That means there's progressively less in it for the dumpers every time there's a rise because we've been testing the 5 level so many times and the bear market is "tapering" (LoL - had to get that term jammed in there somewhere
).
If we take a look at the 3-day MACD histogram, we can see its correction is already in and completed around mid September. It's been positive ever since so this endorses the view (at least from the perspective of this particular analysis - there are lots of ways to look at it but these trends are unambiguous).
Now lets take a look at a more direct way to identify bull / bear markets - the DMI (Directional Movement Index).
Again - this is a VERY long term analysis. It can't be overturned with a few day's trading.
Basically, it's confirming the interpretation of the trading momentum analysis above - i.e. that we are approaching the end of the bear market. We had a strong bull market up until early August when the bears gained the upper hand in the 1-week chart. Then there's been a bit of a battle between bulls and bears between August and now. Finally, with this latest rise we've broken the trend and sent this long term chart into a bull configuration again.
Note - even though this happened before in mid September, it didn't impact the trend strength line (i.e. the trend strength line didn't consider it a trend reversal). This time however, it's been batted level by the last few day's rise. It's not yet a reversal - it needs to start going back up again (with the green line still in charge) for that to be confirmed, but all indicators are starting to point in the same direction.
WHAT DOES THIS MEAN FOR TRADING ?
Basically, what it means is this: If you're planning to dump at 8, expecting it to dive back down to 5 and pick up a few more DRK (like it did before) it may well do so. But the price is much more elastic than it was in the last couple of months. There's less weight holding it down there, so be very careful. This is what you've got to watch:
[1] - it may not go back down all the way
[2] - if it does, the market won't be as liquid as before so not as easy to get out and back in at target exit / entry points for large amounts (we can already see this on Cryptsy - exiting with 2000 DRK will take you to 78, but entering with 2000 will take you to 84. That's a whopping spread. Not something you want to be caught on the wrong side of so you need to be sure we're going to loose at least 0.0006 in value just to be safe that you can get back in without a loss
[3] - as the momentum analysis shows, the downward momentum is suddenly half what it was a week ago. Ergo the valuation is more buoyant and can spring back up easier. If you're going to dump then eyes need to be on charts to keep your a*ss from getting dumped in the quicksand
Thats my take on the current situation ! Totally unscientific and subjective of course. All others welcome