Topic: Consolidating Trend -- A Page From Arepo's Notes - page 5. (Read 6080 times)
Arepo, how are you feeling about the over extension on the 1d and 3d charts?
price action in the last half hour is beginning to look more and more like a wedge on gox, with bitstamp following suit. since the estimated breakout time lands in the nighttime for most western traders, the breakout paradigm may not materialise on schedule. look for a high-volume movement first thing in the morning to get a directionality signal.
this is a continuation of a free series that i will be posting from time to time.
last issue: Decision Point! -or- A Page From Arepo's Notes
SO! Let's take a quick look at the present moment on Gox (for all you bitstampers out there, the prices are largely correlated so this analysis applies equally!)
http://s28.postimg.org/fg67oje7h/trendornotrend.png
we've got two possible patterns, one a bearish flag the other a rising wedge (usually bearish), depending on which parts of the data can be considered outliers. for the flag, breakout is in 0.5 - 3 hours, for the wedge, breakout in 1-5 hours. however, there is a case to be made for both bearish and bullish scenarios. this is intended to be an overview and a brief tutorial on how to interpret the various indicators available over at bitcoincharts.com. as always, questions and clarifications are welcome and encouraged!
The Bull Case
===
10-day 2-hour scale @ GOX
http://postimg.org/image/yfzanaxz1/
===
MFI:
an oscillator that incorporates volume
we've touched down onto a strong moving support, marking the third point of contact that describes a robust trendline*, which is very bullish. this suggests that we've reached the bottom of a correction to the trend, and we will break up out of this pattern.
*a line can be drawn through any 2 points so 3 points is the minimum for a robust linear model for channels, trendlines, and bounds for various other patterns.
StochRSI:
a very light oscillator
upwards movement after an overbought period (blue) on this oscillator is bullish. if it continues, we should break up. a reversal in this indicator would be bearish.
CMF:
an price-volume transformation that acts as an oscillator
not only is the CMF strongly positive, a small but robust upwards trend is visible. as long as this trend continues we will stay on track for the mid-term trend.
PVT:
another price-volume transform
same interpretation as the MFI -- trendline intact, also very robust with 4 points of contact.
The Bear Case
===
10-day 2-hour scale @ GOX
http://postimg.org/image/dht4p7y4d/
===
UO:
an oscillator based on moving averages
these data show a retest of an important support, as well as a lower high correlated with the recent peak. very bearish. if the support holds we may see sideways consolidation, but a break under this support would be very bearish.
Mass Index:
volume tracker
this indicator is calibrated to peak during reversals, which are usually periods of high volatility and high volume. the red and blue bounds are critical, intended to show periods during which volume and volatility are significantly higher than during normal trending and consolidating behavior. a short-term peak above this threshold threatens a reversal.
William's:
another light oscillator
in these data we see a broken support, and a consolidation underneath perhaps forming a bearish triangle. if we cannot break above this support, the mid-term trend is likely over.
SlowStoch:
measures the momentum of price movement
similar story here, with a broken support and an even more bearish consolidation. if we cannot break above the 50-line, the trend is over. if we break above the 50-line but consolidate under the old support, we may see sideways consolidation. a break above the old support would be a confirmation of the mid-term trend.
i hope i have given some of you the tools to trade this exciting moment dynamically. here's a great resource that has the actual formulas as well as in-depth explanations/interpretations of the various indicators. keep in mind that the linked site is intended for other markets, and that my own personal interpretations have been tested and calibrated specifically for the bitcoin price function, but the basic interpretational intuitions still apply. good luck!
--arepo
I work diligently in my analysis, and share it with you as I can. If you learn from me, help keep it free!
18N9md2G1oA89kdBuiyJFrtJShuL5iDWDz
last issue: Decision Point! -or- A Page From Arepo's Notes
SO! Let's take a quick look at the present moment on Gox (for all you bitstampers out there, the prices are largely correlated so this analysis applies equally!)
http://s28.postimg.org/fg67oje7h/trendornotrend.png
we've got two possible patterns, one a bearish flag the other a rising wedge (usually bearish), depending on which parts of the data can be considered outliers. for the flag, breakout is in 0.5 - 3 hours, for the wedge, breakout in 1-5 hours. however, there is a case to be made for both bearish and bullish scenarios. this is intended to be an overview and a brief tutorial on how to interpret the various indicators available over at bitcoincharts.com. as always, questions and clarifications are welcome and encouraged!
The Bull Case
===
10-day 2-hour scale @ GOX
http://postimg.org/image/yfzanaxz1/
===
MFI:
an oscillator that incorporates volume
we've touched down onto a strong moving support, marking the third point of contact that describes a robust trendline*, which is very bullish. this suggests that we've reached the bottom of a correction to the trend, and we will break up out of this pattern.
*a line can be drawn through any 2 points so 3 points is the minimum for a robust linear model for channels, trendlines, and bounds for various other patterns.
StochRSI:
a very light oscillator
upwards movement after an overbought period (blue) on this oscillator is bullish. if it continues, we should break up. a reversal in this indicator would be bearish.
CMF:
an price-volume transformation that acts as an oscillator
not only is the CMF strongly positive, a small but robust upwards trend is visible. as long as this trend continues we will stay on track for the mid-term trend.
PVT:
another price-volume transform
same interpretation as the MFI -- trendline intact, also very robust with 4 points of contact.
The Bear Case
===
10-day 2-hour scale @ GOX
http://postimg.org/image/dht4p7y4d/
===
UO:
an oscillator based on moving averages
these data show a retest of an important support, as well as a lower high correlated with the recent peak. very bearish. if the support holds we may see sideways consolidation, but a break under this support would be very bearish.
Mass Index:
volume tracker
this indicator is calibrated to peak during reversals, which are usually periods of high volatility and high volume. the red and blue bounds are critical, intended to show periods during which volume and volatility are significantly higher than during normal trending and consolidating behavior. a short-term peak above this threshold threatens a reversal.
William's:
another light oscillator
in these data we see a broken support, and a consolidation underneath perhaps forming a bearish triangle. if we cannot break above this support, the mid-term trend is likely over.
SlowStoch:
measures the momentum of price movement
similar story here, with a broken support and an even more bearish consolidation. if we cannot break above the 50-line, the trend is over. if we break above the 50-line but consolidate under the old support, we may see sideways consolidation. a break above the old support would be a confirmation of the mid-term trend.
i hope i have given some of you the tools to trade this exciting moment dynamically. here's a great resource that has the actual formulas as well as in-depth explanations/interpretations of the various indicators. keep in mind that the linked site is intended for other markets, and that my own personal interpretations have been tested and calibrated specifically for the bitcoin price function, but the basic interpretational intuitions still apply. good luck!
--arepo
I work diligently in my analysis, and share it with you as I can. If you learn from me, help keep it free!
18N9md2G1oA89kdBuiyJFrtJShuL5iDWDz
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