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Posts Tagged ‘technical analysis’

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.

 

 

 

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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.

Balanced Price Ranges 9-1-17

September 4, 2017 Leave a comment

Below are Balanced Price Ranges (BPRs) calculated on 9-1-17. BPRs are calculated at the end of each trading day and are intended to bracket medium and long-term price movements. They can be coupled with other tools such as Potential Target Prices (PTPs) which, although likely less accurate, attempt to reveal potential price levels and are useful for evaluating whether price will move up or down in the future. Additionally, BPRs can be compared to where current prices fall within a price grid defined by Murrey Math. If the high end or low end of the Balanced Price Range falls above or below where the grid projects price, then that reduces the likelihood that the price extreme will reach that level – at least until something changes. So, here are the Balanced Price Ranges. Afterwards will be some examples of how the information can be used.

Gold 899.0833 1591.3333
DXY 87.8567 120.2808
SPX 1853.1667 2693.8333
DJIA 16168.7500 23502.9167
WTI 20.5667 91.2000
TLT 92.3333 149.8583
DOG 15.8183 21.9717
EURUSD 0.7656 1.2487
WTIU 6.5733 41.2400
USDCAD 1.2308 1.5124
USDCHF 0.8820 1.0704
GBPUSD 1.1474 1.3727
EURCAD 1.3120 1.6619
EURAUD 1.3053 1.6162
EURCHF 0.9635 1.1498
EURGBP 0.7841 0.9350
AUDCAD 0.9231 1.1060
GBPCHF 1.0865 1.3714
AUDNZD 0.9085 1.1109
NZDUSD 0.6637 0.8206
AUDUSD 0.6795 0.8272
SCO 23.0092 47.4275

Now, looking at the BPRs above, have a look at gold. Gold has a Balanced Price Range of  899.08 to 1591.34 (rounded numbers). At the time this is being written, gold has a Potential Target Price (remember the PTP tends to be less accurate and is more useful as a guide to the direction of price) of 946.27. So, 899.08 is significantly lower than 946.27. On the high end, 1591.34 is well above the daily Probable Price Range of 1375.00 for gold.

Taking a look at the big picture price grid for gold we get the following:

8/8 – 2000

7/8 – 1875

6/8 – 1750

5/8 – 1625

4/8 – 1500

3/8 – 1375

2/8 – 1250

1/8 – 1125

0/8 – 1000

The current price grid for gold covers the 1000 to 2000 range. Therefore, both the PPR of 946.27 and the BPR of 899.08 are outside of the grid. 1591.34 is within the grid. However, until a break above the 3/8 or 1375 level discussing 1400, much less above 1500, seems premature.

In addition, another gold price grid – this one customized around base 60 – might be helpful:

5/5 – 1393.82

4/5 – 1378.64

3/5 – 1359.05

2/5 – 1339.17

1/5 – 1319.29

0/5 – 1299.41

Currently there is dual-resistance at 1319.29 and 1339.17. This is below the 3/8 or 1375 Murrey Math Level. Above that, there will be another important resistance level near 1398.82. So, again, talking about anything above 1400, much less 1500 is very premature at this point until dual-resistance is taken out.

The following chart is a helpful look at gold:

Gold-Action-Reaction-Fib-9-4-17

The gold price is currently in a descending channel. The top of that channel is a little below 1365. Until and unless the top of the channel can be broken and held, it isn’t much use discussing anything above 1400.

If gold stays within the current descending price channel, there is the possibility it will finally dip below 1000, which – at least for the present moment – would appear to make the lower end of the balanced range the most likely.

Changing gears, one other example – AUDNZD – can help demonstrate the usefulness of Balanced Price Ranges. On 8-30-17 the BPR for the AUDNZD pair was .9154 to 1.1058 and the closing price was 1.097. On 8-31-17 the BPR for the same pair was .9035 to 1.1058, but the price had risen to 1.108 which was above the high end of the BPR. The next day, 9-1-17, the BPR for AUDNZD was .9085 to 1.1108, but the price was still above the high end of the range, closing at 1.113. A closing price outside the Balanced Price Range tends to indicate there is strong momentum in one or the other direction. In this case, AUDNZD is showing strong movement to the upside. Typically, the close will not stay outside the BPR for more than a few days, although there are examples where is has remained outside the BPR for several weeks. Even after the price moves back within the  Balanced Price Range, it is possible for it to continue to move in the same direction so the closing price moving back within the BPR doesn’t necessarily mean the trend has played itself out.

Hopefully, this has given you an idea of how the Balanced Price Range can be utilized. The BPR isn’t designed to be used by itself to make decisions, but can be combined with your other tools to provide additional supporting evidence for whatever your decision may be.

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 Price in Three Grids

August 30, 2017 Leave a comment

the-fence-428562_1280

The gold price recently reacted lower after crossing in to the dual-resistance at 1319.29 to 1339.17.

But looking at the gold price, there are actually at least three useful price grids you could construct that would reveal different support and resistance levels.

The first grid would be constructed on our familiar decimal (base 10) number system and looks as follows:

8/8 – 1375

7/8 – 1359.37

6/8 – 1343.75

5/8 – 1328.12

4/8 – 1312.5

3/8 – 1296.87

2/8 – 1281.25

1/8 – 1265.62

0/8 – 1250

These levels are based on Murrey Math. At the present, price is between the 3/8 and 5/8 levels. Under Murrey Math, we should expect that while the gold price is between 1250 and 1375, that around 43% of that time would be spent between 1296.87 and 1328.12.

The 2/8 and 6/8 levels, depending on where the gold price is can act as support or resistance. 4/8 can also act as another support or resistance level. If price reaches extremes below 2/8 or above 6/8 price often returns back to those levels.

The decimal system / Murrey Math combination are something that I have been using for a while to analyze price. However, another useful way to look at price level is to use base 60 and a modified form of Murrey Math appropriate to it. There are at least two useful ways to do this.

First, you can use an idealized base 60 grid as follows:

5/5 – 1357.64

4/5 – 1341.73

3/5 – 1325.82

2/5 – 1309.92

1/5 – 1294.01

0/5 – 1278.11

In the above grid, dual-resistance is 1294.01 to 1309.92. If you have observed today’s gold price action, you might have noticed that around the 1309 level the price turned back. Given the dual-resistance between 1294.01 and 1309.92 this was not surprising.

The second grid is also base 60, but is customized based on the current gold price and looks like this:

5/5 – 1398.82

4/5 – 1378.93

3/5 – 1359.05

2/5 – 1339.17

1/5 – 1319.29

0/5 – 1299.41

Yesterday, the gold price turned lower after crossing above 1319.29 to near 1328 before ending the day at 1315. The idealized base 60 grid would not have caught that turn while the customized one did.

There are several significant points here:

  1. If you only think and do your analysis in decimal (base 10) you are going to miss many important turns because they are invisible to you;
  2. An idealized base 60 analysis will allow you to see levels and turns that base 10 won’t, but there are other turns and levels it will miss as well;
  3. A customized base 60 level constructed on current prices will reveal other important levels and turns that neither decimal (base 10) grids and analysis nor an idealized base 60 grid and analysis will catch

The number system you work with to analyze price is analogous to language. Language shapes thinking and puts a box around what your mind can think and see in many respects. Number systems do the same thing. Only viewing the world through the decimal system (base 10) limits your thinking and analysis. One way to see price movement with new eyes is to use another number system such as base 60 to reveal levels that the decimal system simply has no way to reveal.

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.

 

WTI Crude Oil and 45.93

August 29, 2017 Leave a comment

drilling-36265_1280

In Oil and 46.63 it was noted that:

A weekly close below 45.93 for WTI would make that level resistance. Breaking below 42.42 could potentially open up the possibility of WTI moving substantially – even to below the mid-30’s.

Now, as this is being written, WTI crude oil has dipped below 45.93 which, should price hold below that level on a weekly basis opens up a test of dual resistance at 43.82 and 43.12.

Should dual resistance be broken, then 42.42 would be the final resistance before WTI could potentially dip below 40.

SCO gave an early warning that WTI was going to reverse lower. For more details on that, click here.

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.

 

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. 

JCPenney (JCP) is a Bad AAPL

April 9, 2012 4 comments

How much absolute crap has the public been fed about how JCPenney (JCP) was going to miraculously transform themselves into the AAPL of retailing? JCP was going to become our favorite place to shop, or some, B.S. But, it is looking more and more like all of the buy-side stock analysts that urged suckers, er investors, to purchase JCP stock and ride it all the way up to $40 or $42 per share were full of baloney. Seems to me that you can’t have junk, or crap, if you don’t have JCP.

To see how ludicrous predicting a plus $40 JCP stock price, take a look at the JCP 5-year stock price chart.

JCPenney JCP 5-year stock price chart

Apparently, stock analysts calling for $40 plus JCP stock price never saw this chart

After all, with the huge economic boom brought about by quantitative easing Helicopter Ben Bernanke and the boys at the Federal Reserve, why wouldn’t JCP stock reach into the heavens?

Instead, Icarus-like, JCP stock price got a little too close to the sun and is now falling back to earth.

JCPenney JCP 3-month stock price chart

JCP: But the stock analyst said it would go to over $40 per share...

I hate being lied to and I find it annoying when people can’t see the obvious. What in the world would make anyone believe that JCP and AAPL should be spoken in the same breath, much less that JCP will somehow transform its snoozapalooza anchor mall locations into Apple Stores?

Who came up with the crank concept of creating “a store within a store”? I prefer to call the strategy concentric circles of hell, but that’s me.

If I were in charge of JCPenney I would have closed down the unprofitable and marginal stores and remodeled every one of the crap mall locations like I have in my town. Instead of the traditional “rat searches for a piece of cheese strategy” whereby JCPenney makes its poor customers wander around aimlessly hoping to encounter what they are looking for, I would make it easy to shop there. The store would be open with signs indicating each department – not “store within a store”.

Employees would have a distinctive uniform in order to separate them from customers. Employees would not be allowed to hide from customers while they attempted to look busy folding clothes. In fact, employees would be required – in a not-too-aggressive manner – to make contact within second with each customer who came into their department. There would be something akin to a shopping assistant who would be certain to ask you if you found what you were looking for today, and if you answered “no” would offer to order the item and have it either shipped to the store or to your home. Cash registers would be clearly labeled and colored distinctively so they stood out from anywhere in the store.

When customer checked out they would again be asked if they found the items they were looking for. If not, there would be a kiosk-type display where an employee would find the item and offer to order it or – if the item was in stock – would go pick it up and bring it back to you.

Old line retailers like JCPenney, big box retailers like Lowe’s lose incalculable sums of money because they treat customer more like a nuisance than like the lifeblood of their business.

JCPenney’s silly junk marketing of everyday low prices, and crap ideas of becoming Apple are beyond wishful thinking. There is almost no hope that JCPenney will ever, ever, ever come close to achieving those ridiculous ideas. JCPenney could, however, offer a pleasant shopping experience with excellent customer service and grow its incremental sales. That is a tried and true method that, combined with taking advantage of the Internet, could prevent JCPenney from eventually meeting with the fate that awaits Sears and K-Mart. However, I doubt the CEO and many Senior Vice-Presidents will take the time to look at what really might work, and will instead continue to pump AAPL pie-in-the-sky ideas while watching JCP stock slide.

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.