BTCUSD Perspective And Levels: 12K And The Future(s)?

Dec 5, 2017

BTCUSD update: Sitting on the high, this market is still poised to go higher. There are two extensions to be aware of: 12400 and 14750.

The CBOE is aggressive and will have the futures trading in a matter of days followed by the CME shortly after. No one knows how they will affect this market, or the alts, we have no choice but to wait and see.

Meanwhile this market does not really retrace. It almost seems too easy: "just buy and you will make money", "it's different this time", etc. I don't like to be the one to burst people's "bubble" but it is not different this time. The Dot.com era offered the same promise, and it delivered on it's promise, the internet has dramatically shaped the future and has presented limitless opportunities, but the equity markets experienced two serious corrections since then and the majority of internet stocks that existed 20 years ago no longer exist.

I do not know when this market will experience that magnitude of correction. The scope of my analysis covers short term price action, and there is still no sign of weakness. There are two levels just above where price can potentially reverse, but that is no reason to get short. There is 12100 which is the upper boundary of the reversal zone measured from the 8821 low. There is the 12400 extension which is measured from the 5400 low and then there is the 14700 (1.618 extension) projected from the 8821 low.

14700? Proportionally that is a potential target for this market (doesn't mean it will get there right away). As far as support goes, 10700 is the active support for this market (.382 of recent bullish swing). At this point, unless you are trading small time frames, I am using a break of this level as a signal for coming weakness. The break would have to be significant (price will have to be trading back toward 10102). A break by 100 or 200 points is not very meaningful in this market. And for those itching to short, the best time to start looking for setups is the retrace AFTER that break (and I would also wait until the futures are trading since this market is severely skewed by the inability to short and Tether).

Until then, momentum and structure are aligned for higher prices. Now, I keep getting messages asking if this is a good time to invest. In my opinion, no. Short term trading is one thing, risk is defined by near by levels and the position can be exited for relatively smaller losses. Investing implies holding which opens you to a ton of risk and uncertainty. Why buy highs? ALL markets correct, why not wait? It is amazing how blind greed proliferates.

In summary, the kind of price action that is occurring in this market is very unusual. And for me is a red flag. There are a number of factors that can come together and change things quickly: the futures which will open this market to institutions and a more balanced ability to short, and the Tether situation. I do not mind buying into a strong market, even with these potential threats, but IF I am going to take a swing trade long, I prefer to do so on my terms which means it has to be according to my plan. If the market will not meet my criteria, then I stay flat. I developed this plan to keep me out of trouble and to help me recognize when conditions are more favorable in terms of reward/risk. It is not meant to get me into every movement, instead it is a form of protection against impulse, opinion and emotion.

Comments and questions welcome. (Also quick note: It has been brought to my attention that my reports are not appearing where they should be and as a result, my viewership is seriously low. TV does not seem to be responsive to the situation,so I am wondering if I can get further feedback from the community. I am trying to figure out, is it my subject matter? Feedback would be much appreciated).