First off. Don’t take this an advice or as a “trade call”.
People keep asking me how my trades have been on point so far, and keep sending me private messages asking for help in their trades. Another question that I get asked the most is if has bottomed in. Let’s tackle that here.
Has bottomed in? Yes it has. This doesn’t mean that the same bottom will not get retested. It is possible. Unlikely any time soon however.
As I mentioned in the title January is going to be the strongest month so far in over a year for .
On the monthly chart, we can see that a possible is forming. This pattern occurs after a big red candle (november), a very small red or green candle (december) and the a big green candle. is a reversal pattern, if formed on the monthly, it will officially mean that 2019 will be a bull year.
Let’s keep analyzing the monthly chart. Below the chart, I have shown a particular leading (yes leading and not lagging) indicator. This indicator is called Mean Reversion. For those who don’t know what mean reversion is, it is a relative “return to normal” price action. As you can see, so far the mean reversion on big timeframes like a monthly chart has produced really well timed signals. In december 2017, a sell signal crossover (when green line is under red line) occurred on the indicator when mean reversion broke near or above 1 (blue circle), in July a buy signal was produced before the rally began. Finally, another buy signal occurred this december when the indicator is near or less than 0. It’s likely, therefore, that a move up to normal (0.5) is coming soon, given the crossover (green over red) and that the relative indicator is near 0.
On the monthly chart, is still in the zone, is very oversold, this is another clue that a move up (and a big one) is likely.
Finally, we can see that the 20-ma on the monthly chart has not been breached but almost reached, which means it is a very very strong support around ($2950). It was not reached because the 200-ma was reached on the weekly chart (around $3160). Now, let’s analyze a pattern on the weekly chart.
As we can see, a potential inverse head and shoulder pattern is forming, this is another reversal scenario on a big timeframe. The 200-ma held and provided a big bounce. has bounced from oversold conditions. is on a move up. On the , the inverse head and shoulder does not look perfect, but it will still be successful, let me give you another proof.
This is a very strong inverse Head and Shoulder pattern on the of the Total Marketcap including . Same pattern is shown on the chart of the total marketcap excluding .
Now, these are enough proofs to make me believe that 2019 is going to be the start of the bull run.
Take this analysis more as my opinion rather than a trade call please.
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Published at Tue, 25 Dec 2018 16:12:07 +0000
