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Bitcoin: Caution Ahead

August 31, 2017 4 comments

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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.

Not that you should necessarily get your crypto currency advice from Goldman Sachs but there is this:

Bitcoin is now within reach of the $4,827 near-term price target that Goldman Sachs analyst Sheba Jafari quoted to clients in a research note earlier this month. Once it hits that level, the cryptocurrency could be due for a corrective selloff, perhaps as low as $2,221, Jafari estimated.

Which conforms pretty nicely with my non-bankster analysis from the Bitcoin Price Road-map:

Given the current price trajectory of Bitcoin (and some underlying knowledge of how Murrey Math Cycles work) a target price of $5,000.00 would be well within reason.

After this, especially if you are speculating use caution as the Bitcoin Price Road-map suggests the possibility of a 50% decrease in price from $5,000 to $2,500.00.

There are two big picture variations of price levels below. The first is based on Murrey Math and its rules for constructing a price grid.

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 second big picture variation is a modified Murrey Math price grid based on natural growth patterns and the base 60 rather than decimal or base 10 system.

8/8 – 10861.16

7/8 – 9503.51

6/8 – 8145.87

5/8 – 6788.22

4/8 – 5430.58

3/8 – 4072.93

2/8 – 2715.29

1/8 – 1357.64

0/8 – 0

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

OK, that’s a lot of numbers! So, where does that get us to?

First, the long-term implication is that Bitcoin has further to go up. However, before it can move to anywhere near 10000, it is more than likely due for a sharp drop lower. If you have been “holding” Bitcoin for a long period of time, you may not be concerned. However, if you are new to Bitcoin or a speculator who has either purchased near the highs, or is considering doing so, you should proceed with caution.

The two big picture grids, combined with some knowledge of cycles and Murrey Math, can be interpreted to indicate that the 5000 to 5400 levels could bring a reversal lower. In addition, the base 60 grid points to dual-resistance forming at 5132.67 and 5525.34. So, basically, anywhere from 5000 to 5525 or so could see a reversal. Of course, the reversals could occur elsewhere or not at all. Anything is possible, but not everything is likely or probable. Somewhere near 5000 would be where the cycle would normally reverse the price trajectory downward.

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With Bitcoin taking center stage and locals taking to Facebook to ask which crypto currency is the best to turn a profit on, there is anecdotal evidence that the market has some froth. Cycle theory combined with Murrey Math is pointing to the same conclusion – as Bitcoin nears 5000 it may be wise to exercise caution and not take any undue risk or speculate with any money that you can’t afford to lose.

Update: Since writing this post Bitcoin traded above 5000, and then promptly started to see its price erode. As this update is being written (9-4-17) the Bitcoin price is below 4300. Cycle analysis would point to the price to move to near or below 2500 before it rebounds and begins a move that is expected to take Bitcoin to somewhere around 10000. Stay tuned.

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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Target (TGT) Stock Price Breaking Down?

April 10, 2012 Leave a comment

Looks like the Target (TGT) stock price is breaking down. Here is the TGT 1-year stock price chart.

Target TGT 1-year stock price chart

Target TGT stock has been overbought recently

It appears that the TGT stock price is moving from a overbought status as demonstrated by the channel in the bottom chart. Whether this will continue is unknown, but it seems likely.

Now, let’s look at the TGT 5-year stock price chart.

Target TGT 5-year stock price chart

Target TGT stock price may not reach much higher

It appears that around the $60 level, TGT has difficulty breaking through. Also, for the past several years, TGT appears overbought. At these price levels, I don’t think I would be looking to purchase TGT as it does not appear to have much room to rise, and may – in fact – fall more in price.

Disclaimer: The above is for informational purposes only. This should not be considered investment advice. Any investment decisions are your own and should be made after conducting your own independent research and / or in consultation with a professional investment advisor. 

Timmins Gold TGD Nears Buy Price Trigger

Timmins Gold TGD finished the day at $2.43, only $0.03 below its 21-day exponential moving price average of $2.46.

TGD 1-year stock price chart follows:

Timmins Gold TGD 1-year stock price chart

Timmins Gold TGD nears buy price trigger

As you can see from 21-day detrended price oscillator chart, TGD has been below the bottom of the channel, indicating an oversold condition.

The last time this occurred, TGD went from $2.06 to over $3.00 before hitting the sell trigger at $2.63.

Expect overhead price resistance at a little over the $3.00 mark.

Disclaimer: The above is for informational purposes only. This should not be considered investment advice. Any investment decisions are your own and should be made after conducting your own independent research and / or in consultation with a professional investment advisor.

RIMM Reversal of Fortune

March 30, 2012 1 comment

As a former BlackBerry user, I have watched with fascination as Research in Motion (RIMM) has managed to lose its position as market leader.

Image representing Research In Motion as depic...

Image via CrunchBase

Unfortunately, for the RIMM stock price, the company has waited for too long to face the grim facts.

Research in Motion’s inability to face the challenges that faced it, led to a dramatic reversal of fortune. First, let’s look at the shorter-term chart.

RIMM Short-Term Chart 3-29-12

RIMM's declining stock chart

For a short time it looked as if RIMM might bounce off the bottom and begin to ascend in price. However, RIMM dropped through support and is now in a descending price channel.

The view is even more dramatic looking back over the past year.

RIMM 1-Year Chart 3-29-12

RIMM's stock price decline this past year has been spectacular

Who could have seen this coming? Well, perhaps, those who switched from BlackBerry to an iPhone or Android phone. Oh yeah, and Reggie Middleton.

JCPenney (JCP) Stock Price Slaps Back

March 27, 2012 2 comments

Looks like the JCP stock price chart just got a little more interesting.

JCP Stock Price 3-27-12

JCP stock price just peeking out of descending price channel

JCP stock price is just peeking outside of the descending price channel and also right above the sell trigger line it had fallen through previously.

However, we’ll have to wait to see how the JCP stock price closes to better assess this chart.

Despite the nice bump up in price, JCP is nowhere near the Andrew’s Pitchfork that it fell out of a couple of weeks ago. The price would need to close above the blue 21-day exponential moving average on the price chart to convincingly indicate that the price will rise further.

Disclaimer: The above is for informational purposes only. This should not be considered investment advice. Any investment decisions are your own and should be made after conducting your own independent research and / or in consultation with a professional investment advisor.

HUI / Gold Ratio at Panic Levels

March 27, 2012 1 comment

From the always informative Zeal Speculation and Investment:

As I ponder this vexing puzzle [low gold miner stock prices], my mind keeps returning to how the stock markets in general work. Any stock is ultimately a fractional share of its underlying company’s future profits stream. If those profits are high or rising relative to the stock price, investors bid up the stock to reflect its underlying economic reality. Over the long term, the markets eventually price all stocks to fairly represent their profits.

And despite the many challenges of mining gold, profits are rising dramatically. My business partner Scott Wright recently updated his fascinating research thread proving this. By painstakingly analyzing detailed data from individual major gold miners collectively representing nearly half of global mined production, it is apparent gold-mining profits are amazing. Last year the average gross margin of this elite group ran $915 per ounce, or an astounding 58%! Gold miners are making money hand over fist.

And later…

This week the HGR [HUI / Gold Ratio] slumped to levels only seen two other times in this secular gold bull. The first was way back in early 2002 when the gold-stock bull was just getting underway so participation was light. And the second was briefly during late 2008’s once-in-a-century stock panic. Quite literally, relative to gold the gold stocks are trading at stock-panic price levels today!

Is this rational? Do these dirt-cheap prices fairly reflect the current and future profits streams the gold miners are spinning off? History argues no way. The entire stock-panic event essentially encompassed the second half of 2008, with normal market conditions existing before. Over the 5 years between mid-2003 and mid-2008, the HGR averaged 0.511x! The HUI tended to trade at about half the price of gold.

On mean reversion:

Mean reversions are one of the most powerful forces in the financial markets.  And gold stocks are in the catbird’s seat with two huge ones in their favor.  Not only do gold stocks need to be much higher to reflect today’s prevailing gold prices fundamentally, but this sector’s psychology is due for a radical shift as well.  Thus just like back during the stock panic, today’s panic-priced gold-stock levels aren’t sustainable.

Perhaps Stein’s Law (“If something cannot go on forever, it will stop.”) applies here with regards to gold stocks so badly lagging the price of gold.

I highly recommend you go read the entire article and look at their excellent charts showing the HUI / Gold Ratio.

Disclaimer: The above is for informational purposes only. This should not be considered investment advice. Any investment decisions are your own and should be made after conducting your own independent research and / or in consultation with a professional investment advisor.

Android App Review: Stock Chaos

March 24, 2012 Leave a comment
Stock Chaos Home Screen

Home Screen for Stock Chaos Android App

Recently I was looking for an application to keep track of stocks, prices and more using my Android phone. However, nothing really caught my eye until I ran across Chimpler’s Stock Chaos.

Stock Chaos offers lots of big features found on applications such as E*E*Trade Mobile*Pro. But Stock Chaos is not dependent on having an account with an online broker.

One of my favorite features is the ability to bring in my Google Finance portfolios. It’s definitely nice to not have to re-enter stock tickers again into yet another application.

Stock Chaos Portfolio

Stock Chaos Portfolio

Aside from Google Finance, you can also add other popular social networking sites such as Twitter, Facebook and LinkedIN.Stock Chaos Accounts

Stock Chaos Accounts

Stock Chaos Accounts

Stock Chaos offers a full range of features, including stock charts, news updates (including from blogs, Twitter, StockTwits, and other social networking sites), charting, spreadsheets, transaction tracking etc.

Stock Chaos Stock Details Screen

Stock Chaos Stock Details Screen

 

Stock Chaos Stock Details News

Stock Chaos Stock Details News

 

Stock Chaos Charts

Stock Chaos Charts

 

Stock Chaos Spreadsheet

Stock Chaos Spreadsheet

 

Stock Chaos Transactions

Stock Chaos Transactions

 

Stock Chaos also includes the ability to screen stocks and set price alerts. I have been especially impressed with the price alert capability. It is as good or better than what is available in the E-Trade application.

Stock Chaos Transactions

Stock Chaos Transactions

 

Stock Chaos Alert

Stock Chaos Alert

 

Stock Chaos Set Stock Alert

Stock Chaos Set Stock Alert

 

Overall, I have been pleased with the performance of Stock Chaos. It isn’t perfect. It has crashed on occasion, but it has incredible functionality, especially considering it is a free application that does not tie you to any particular stock broker in order to continues using it at no cost. Overall, a highly useful and recommended application if you want to keep track of stocks, do research, and share with your social network while on the go.