I’ve been quiet for the past 2 months about predictions because I strongly believe that if you have nothing of value to say then don’t waste peoples time. However, after 2 months of quiet, I thought it was time for an update.
After giving us the opportunity to get long a 50% position at an average price of 223 the market has done nothing but meander back and forth. This behaviour pattern is not uncommon in a market after a period of high volatility and simply signifies a period of value testing – does the market feel fairly priced at this level?
We now need to consider what to do with our small 50% long position.
On the upside I will be extending my position to long +100% if we break above 330 (The market is currently trading at 260 at time of writing). This is a pivot high following the reaction to the 166 lows back in early 2015 and breaking this should see a period of sustained higher price action. On the downside I’m no longer willing to see a loss on this small position so look to place a stop below the recent congestion level at 230.
A final note of caution, recent market behaviour will have made people lazy with stops and undisciplined in their trading; don’t get caught out! Quiet periods like this rarely signal when they end.
The end is likely to come as a sustained move in one direction or another; often not a dramatic surge but a consistent grinding move which will catch people out who are waiting for the retracement to close out. Stick to your stops and your trading discipline.
Well…what a month. I hope you followed our advice and kept to your stop discipline which got us out of our tentative long position at 250 before the collapse down to 166. Since then we’ve kept out of the market to see what transpires.
Looking at the chart you can see that the trend is still down, so we should be playing this market from the short side. But there’s something in the way the market is behaving that makes me more inclined to still trade this from the long side – but very cautiously.
Our recommendation is to take a small 25% long position at the current level (226 as I write this) with a further 25% long at 220. Initial stops should be placed below 200.
On the basis of how quickly this market can move we will also give a short break recommendation. We will be looking to go short a full 100% of the way on a break below 160. We don’t believe this is the scenario that will unfold but if it does we can see a quick spike down a further $30 where we will look to cover our shorts (at the $130 level).
Over the past few days market action is starting to look mildly constructive; It is encouraging enough to suggest that we dip our toes back into the market.
We are entering to buy of a 25% position at the current price (284 at time of writing) with a further 25% bid below the market at 271. Protective stops should be placed below the 250 level. I would recommend a very disciplined use of Stops at the moment as a further slide can’t be ruled out.
We will build on this position if the market starts to trade higher.
First Global Credit
Happy New Year and another sweep down in the BTC price below 290. Followers of our recommendations should now have covered their tentative short position from the 342 level and be flat again.
This latest move down lacks conviction and backs up our central thesis that we are seeing long term bottoming behaviour in the market with this down move being a re-test of the lows reached in October (275 intra-day); rather than a new impulse move lower.
Stay flat for now until market sentiment becomes clearer. Our recommendation is to place a buy order (1/3 position) on a break back above 340. We don’t recommend placing a buy order at this level or below the current market level as falling markets have an uncomfortable habit of falling further and faster than people anticipate, better to buy after support has been established.
Good Luck for 2015