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DJIA Probable Price Range for 9/25/2017

September 23, 2017 Leave a comment

DJIA Probable Price Range for 9/25/2017

Probable Price Range Low: 22190.62

Probable Price Range High: 22418.87

Click here to learn the basic elements behind the Probable Price Range (PPR).

Disclaimer: The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

Author does not make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, author disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.

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Bitcoin Bounce

September 15, 2017 Leave a comment

bitcoin-2729806_1280

With Bitcoin bouncing from a low near 3000 to above 3700, is it time to get excited about a big, fast recovery in price? Let’s examine some important levels to see where important resistance comes into play.

The biggest hurdle for the bitcoin price is dual-resistance at 3629.34 and 3907.00. Breaking 3629.34 is just the first step as this is dual-resistance. Even breaking above 3907.00 doesn’t by any means guarantee the price will continue to move higher. In fact, it isn’t uncommon for price to temporarily move above dual-resistance before a rally fails and moves down either between the dual-resistance levels or below both of them.

If we assume, for the sake of argument, that the Bitcoin price breaks and holds above dual-resistance then we should consider the following Murrey Math Price Grid:

8/8 – 5000

7/8 – 4843.75

6/8 – 4687.50

5/8 – 4531.25

4/8 – 4375

3/8 – 4218.75

2/8 – 4062.50

1/8 – 3906.25

0/8 – 3750

Should price break above dual-resistance, or 3629.34 and 3907.00, then this also bring into play the 1/8 or 3906.25 Murrey Math Level. If that level holds, then a move to 4375 becomes possible.

However, the larger Bitcoin price context should be considered:

8/8 – 10000

7/8 – 8750

6/8 – 7500

5/8 – 6250

4/8 – 5000

3/8 – 3750

2/8 – 2500

1/8 – 1250

0/8 – 0

The above price grid is discussed in the Bitcoin Price Road-Map. In that post the analysis indicated that price would rise above 5000 (it did) and then move back toward 2500 to 2700 (still in process).

The 3/8 or 3750 price level above is an important, but weak level. Breaking above 3750 and holding can be significant, but it is quite common for price to move above the 3/8 level and then fail and drop from there. This may be what we see with price action today.

Should the rally weaken today and price fail to move strongly above 3750 then we should consider the following levels to guide us:

5/5 – 3351.68

4/5 – 3155.34

3/5 – 2959.004

2/5 – 2762.66

1/5 – 2566.32

0/5 – 2369.99

Dual-support using the price grid above is 2566.32 and 2762.66. Hitting those levels would essentially represent a successful forecast of the Bitcoin price moving from near the 5000 level to the 2500 to 2700 range. Once price hits 2500 to 2700, the expectation, based on cycle analysis, is that Bitcoin will begin to make a move toward 10000. Don’t be surprised if Bitcoin overshoots 2500 to 2700 to the downside. Equally, don’t be surprised if price rallies extremely rapidly anywhere around 2500 to 2700. Dual-support, in this case 2566.32 to 2762.66, tends to be strong, so we shouldn’t necessarily expect a sustained price push below those levels.

Bottom Line: The Bitcoin Price Bounce may just be a relief rally and not sustainable. Expectation remains that price moves toward 2500 to 2700.

 

 

 

Bitcoin Price Falls: How Low Will it Go?

September 4, 2017 Leave a comment

bitcoin-2373265_1280

After pushing to near (or above depending on your source) 5000, the Bitcoin price has begun to move substantially lower – trading below 4300 as this is being written. Many people, especially those who are new to Bitcoin and other crypto currencies, are likely worried about where the price is headed. Fortunately, this was discussed in Bitcoin: Caution Ahead published on August 31, 3017.

With the crypto world buzzing about Bitcoin approaching the 5000 level, its progress has seemed unstoppable. However, there are some signs of frothiness. In my own local community the owner of a computer networking and repair business has started giving classes on investing in Bitcoin, Ethereum and Litecoin. The locals are discussing investing in crypto currencies, wondering which ones are the best to profit from.

But, more importantly than anecdotal evidence that there may be some temporary frothiness in the market are cyclical concerns. In fact, as Bitcoin nears the 5000 to 5500 level, the risk increases that the price will dip to around the 2500 to 2700 level.

Bitcoin has already broken through the initial resistance discussed in that post.

Additional resistance can be discovered by constructing a pure base 60 grid based on the current price level of Bitcoin.

5/5 – 6703.37

4/5 – 6310.69

3/5 – 5918.02

2/5 – 5525.34

1/5 – 5132.67

0/5 – 4740

The next base 60 grid is:

5/5 – 4740

4/5 – 4462.33

3/5 – 4184.67

2/5 – 3907

1/5 – 3629.34

0/5 – 3351.68

Potential dual-support is at the 3629.34 and 3907 levels.

Barring Bitcoin blasting through the 5400 – 5500 area, the expectation is that it will slide towards to 2500 – 2700. Once near that level expect Bitcoin to rebound and start working its way toward the 10000 level.

Bonus: This isn’t why the Bitcoin price dropped:

Sorry, it’s not the China

Yes, it always seems there has to be a “reason” for price movements to happen. Price movements happen based on cycles. There are many cycles ranging from climate to war, economic to fashion. Price isn’t unpredictable and it isn’t a random walk. Yes, predicting something like will the price of Bitcoin be up or down tomorrow can be tricky. Using Probable Price Ranges (PPRs) to bracket the day’s movement is simpler and, over time, can give a good idea which direction prices are moving. I wrote my post Bitcoin: Caution Ahead saying that near 5000 Bitcoin would reverse and head to around 2500 to 2700. The Chinese Government didn’t call me on the phone to let me know they would not legalize Initial Coin Offerings (ICOs). However, understanding cycles, probable ranges and Murrey Math allowed for the creation of the Bitcoin Price Road-Map on August 13th much ahead of when China supposedly “caused” the Bitcoin price to drop.

Disclaimer: The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

Author does not make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, author disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.

Gold and 1300

August 28, 2017 Leave a comment

Gold has had difficulty closing above 1300. The reason for that is that there is an important resistance level at 1299.41.

Even assuming that gold can close the week above 1299.41, expect a clustering of resistance at 1319.29 and 1339.17.

A potential argument against a substantially higher gold price can be made based on the chart below.

Gold-Action-Reaction-Fib-8-28-17

The current gold market is exhibiting striking similarities to the 1970’s to 1980 bull. Gold’s price sits within a declining channel which, until price breaks out of it, will likely remain within a range.

To even challenge the top of the channel, the gold price will have to break through the cluster of resistance at 1319.29 and 1339.17. That may (or may not) prove challenging.

Even if we boldly assume that price breaks through the resistance clusters, it faces further resistance at 1395.20 (.618 Fibonacci) and 1398.82.

As this is being written, the gold price is near 1305 so we’ll see if 1300 finally gets taken out on a weekly basis.

The U.S. Dollar Index (DXY) has failed to break through (thus far) its cluster of resistance at 92.16 and 92.44, so one could make the case that a weakening dollar would be positive for the gold price.

Continuing U.S. political instability, the inability of Congress and the President to move an agenda forward, as well as international tension with North Korea, etc. could also weaken confidence in government institutions and the economy. This too, under traditional fundamental analysis, would argue in favor of the gold price strengthening.

At this point, however, we need to see if gold can close the week above 1300. If so, the next challenge will be the cluster of resistance at 1319.29 and 1339.17.

Disclaimer: The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

Author does not make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, author disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.

Dow Jones (DJIA) 22000 and Below

August 28, 2017 Leave a comment

The Dow Jones Industrial Average’s (DJIA) failure to hold 22000, if it doesn’t concern the market yet, should start to be of concern soon. At this point, it would require a weekly close above 22594.11 to offer any hope of reversing the trend lower.

The next important level to watch is near 21750. If that level fails to hold, then 21469.40. Losing 21469.40 will open the door to the possibility of the market slipping below 20000.

Look for more on this in the future as the DJIA and markets move.

Disclaimer: The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

Author does not make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, author disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.

The Case for SCO

August 22, 2017 2 comments

To better explain how the system used on this site works, let’s use SCO, the Proshares Ultrashort Bloomberg Crude Oil as an example.

One aspect of the system is to look at support and resistance in terms of Murrey Math. At the end of July, SCO made a low of $35.90. That low was of interest because of how it related to Murrey Math.

8/8 – 100.00

7/8 – 87.50

6/8 – 75.00

5/8 – 62.50

4/8 – 50.00

3/8 – 37.50

2/8 – 25.00

1/8 – 12.50

0/8 – 0

At $35.90, SCO was only $1.60 below $37.50. Why does $37.50 matter? $37.50 is the 3/8 Murrey Math Level between zero and $100.00. That zero to $100.00 range encapsulates the vast majority of SCO’s price movements for the last two years. An interesting aspect of Murrey Math is that price will spend approximately 43% of the time trading between the 3/8 and 5/8 levels. So, 1/3 of the levels, or 33%, accounts for 43% of the time that price spends moving between 0/8 and 8/8. That means that once the price crosses above $37.50 there is a decent chance it will remain between the 3/8 and 5/8 Murrey Math Levels for some period of time.

Another way of looking at SCO is through the lens of the Negative-Positive Ratio (NPR) and Positive-Negative Ratio (PNR). One way to look at these ratios is to make an analogy to double-entry bookkeeping. For every entry on one side of the price ledger, there has to be a corresponding entry to balance it. With the NPR and PNR ratios this is done by a calculation that seeks to balance the total actual positive or negative price movement for any one trading day with the potential opposite potential price movement for that same trading day. This is different than simply assuming that a stock price increase of $1.00 must be balanced by a $1.00 decrease.

seesaw-41961_1280.png

Imagine a seesaw or teeter-totter. On one end of the seesaw sits a little girl, Sally. Sally, that little beam of sunshine, is the Positive-Negative Ratio. On the other end of the teeter-totter is bad boy Billy. He’s the Negative-Positive Ratio. At any one moment either sunny Sally or bad Billy has the upper hand. But, soon enough, the other child reverses the direction of travel of the other.

Now, transpose little Billy and Sally and their teeter-totter onto the undulating wave of prices.

frequency-282742_1280

Not only do you have the up and down of Sally’s positivity with Billy’s negativity, but you also have the overall trend, either up or down that influences the price. So, the two ratios – NPR and PNR – achieve a sort of balance but only within the context of an undulating price wave. At any given moment, Sally and Billy on their seesaw, are not only traveling up or down the price wave, but also moving up and down around the pivot of the teeter-totter.

The Positive-Negative Ratio and Negative-Positive Ratio are expressed as decimals (or percentages). There are actually several steps in creating the ratios. First there is the calculation of the raw positive and negative day numbers. The positive day raw number is divided by the negative day raw number to get a Positive/Negative (P/N) number. The negative day raw number is divided by the positive day raw number to get a Negative/Positive (N/P) number. Then the P/N is divided by the N/P to arrive at the Positive-Negative Ratio and the N/P is divided by the P/N to arrive at the Negative-Positive Ratio.

The NPR and PNR Ratios can be looked at in terms of a modified Murrey Math that looks like this:

6/6 = .9375

5/6 = .78125

4/6 = .625

3/6 = .46875

2/6 = .3125

1/6 = .15625

0/6 = 0

The 2/6 to 4/6 range is expected to be somewhat analogous to the 3/8 to 5/8 Murrey Math Levels, although the exact percentage of time the NPR and PNR ratios is expected to stay within the 2/6 to 4/6 range has not yet been calculated. Potential price reversals could happen at the 4/6 or .625 level and the 2/6 or .3125 level. Extremes of 5/6 or .78125 and above and 1/6 .3125 and below could mean at least one of two things: First, price has reached an extreme and is expected to reverse direction, or; Second, price is strongly trending and will continue to trend until some stronger force causes it to reverse direction.

As far as SCO is concerned  a case could be made for a strongly trending price (although current data is extremely limited). On August 8th the PNR stood at 0.802785911. The price that day closed at $37.77 (above the 3/8 or $37.50 Murrey Math Level). The next day price closed at $37.06 and the PNR was 0.64694451. Since then, the PNR has generally trended lower, but price has generally been trending higher. Yesterday, August 21st, price closed at $40.04 and the PNR was 0.528564954.

Given the very limited PNR and NPR ratio data on SCO, it would be handy to have another method to look at price to determine what the potential trend is. Fortunately, there is such a method – the Balanced Price Range (BPR). The method of calculating the BPR is not something we are going to discuss in any great detail today. It is a fairly complex series of calculations. It requires looking at each day’s price close versus the previous day’s price close and making further calculations using algebra to determine what the extreme low and high price levels for any given stock, index, commodity, etc. should be.

The current Balanced Price Range for SCO is $27.20 to $43.36. Given the previous close of $40.04, that still gives SCO some room to move higher. On August 8th the SCO BPR was $35.46 to $39.74. Over time, the BPR can widen or narrow. The entire range can also shift lower or higher. For example, on August 20th SCO closed at $38.20 and the BPR was $25.36 to $41.52. On August 21st SCO closed at $40.04 and the BPR was $27.20 to $43.36. The BPR can also give a signal to go short or long. For example, on August 14th SCO closed at $40.24. However, it’s BPR was only $30.65 to $39.68. When the closing price falls outside of the BPR, then that tends to be a signal that price will continue to move strongly in the same direction (higher or lower). In the case of SCO, since it closed above the BPR, the expectation was that it would continue to move higher. On August 16th SCO closed at $41.38. SCO has since moved lower than $41.38, but for the most part has remained above the $39.68 level which was the top end of the BPR on the day it closed above the range.

How you use the BPR is really only limited by your own imagination. Had you been a commodities trader watching the BPR for SCO on August 14th it would have given a compelling signal that the price of WTI Crude was going to reverse strongly since SCO was signalling that it expected the price of crude to move lower. Currency Pairs also from time to time will flash signals that it is time to go short or long. This happened very clearly with the USDCAD on June 27th when it closed at 1.319, below the BPR of 1.325 to 1.3315. By July 26th the USDCAD closed at 1.246. EURCHF also gave a signal to go long on the same day, June 27th as the USDCAD gave the signal to go short. EURCHF closed at 1.089 on that day. By July 31st the EURCHF stood at 1.143.

Returning to SCO, it does appear that the BPR gave a buy signal on August 14th when the price closed at $40.24 which was above the range of $30.65 to $39.68. Generally, price has remained above the $39.68 level  since then which could be viewed as indicating that level provides some support. Additionally, the $37.50, or 3/8 Murrey Math Level, offers some additional support. Once price crossed above $37.50, it opened up the possibility that price would trade between the 3/8 or $37.50 and 5/8 or $62.50 levels for some time. The $50.00 or 4/8 Murrey Math Level should be expected to provide some resistance to upward price movement. However, should price move and hold above that level for a few trading sessions, then that level would become a new floor of support. Additionally, the Positive-Negative Ratio can be viewed as making the case that SCO is in a price trend higher as a move lower in the PNR has not significantly damaged the upward price trend.

Full Disclosure: Author is currently long SCO.

Click here to learn the basic elements behind the Probable Price Range (PPR).

Disclaimer: The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

Author does not make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, author disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.

Successful Price Prediction Forecasts With Probable Price Range (PPR)

August 21, 2017 Leave a comment

If you have looked around this site and seen all of the Probable Price Ranges you may be wondering whether or not they work. The short answer is yes.

PPR-Percents-8-21-17

The criteria for determining whether the PPR is successful (TRUE) or not (FALSE) is as follows:

Does the entire probable price range fall within the the actual price range for the day and/or did the closing price fall within the Probable Price Range for that day.

If either one or both of these are true, then the PPR is considered TRUE or successful.

While some argue that price is a random walk, it isn’t nearly as random as some would have you believe. Yes, the daily direction appears random, but the longer than daily moves begin to fall into more clearly defined ranges.

While it isn’t recommended that you use the Probable Price Range as your only tool, it is quite useful as another tool in your tool box to help determine not only the direction of price, but potentially the overall extent of possible moves on a daily basis.

In addition, in a later post, we can discuss other tools such as Balanced Price Ranges (covering longer time periods) and Positive/Negative Ratios and Negative/Positive Ratios which can provide signals that price may reverse its current direction. Balanced Ranges can also provide signals when the actual price rises above or falls below the Balanced Range.

Click here to learn the basic elements behind the Probable Price Range (PPR).

Disclaimer: The information provided here is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney or other professional to determine what may be best for your individual needs.

Author does not make any guarantee or other promise as to any results that may be obtained from using this content. No one should make any investment decision without first consulting his or her own financial advisor and conducting his or her own research and due diligence. To the maximum extent permitted by law, author disclaims any and all liability in the event any information, commentary, analysis, opinions, advice and/or recommendations prove to be inaccurate, incomplete or unreliable, or result in any investment or other losses.

Content contained on or made available through the website is not intended to and does not constitute legal advice or investment advice and no attorney-client relationship is formed. Your use of the information on the website or materials linked from the Web is at your own risk.