ETHUSD Perspective And Levels: More Strength, No Volume.

31 Jul 2017

ETHUSD Update: Less than a day to go for the big BTC event and this market is continuing to build price structures that imply strength. After the initial push up to 213 and attempted break of the 208 resistance, price has retraced to the 190 to 184 minor support which is an ideal location to form a higher low.

This market is presenting a broader higher low which I wrote about previously, (see linked report) and is now in the process of building a minor higher low structure. Higher lows appear when real selling is absent in a market, and typically lead to higher highs. The broader HL followed by this minor HL implies further strength.

What make these higher lows even more interesting is where the buyers are expressing the most interest and that is in the support zones that are related to the .618 of each respective swing. If the BTC drama was not happening tomorrow, I would be buying into these structures.

Reason I am not buying: There is extreme lack of volume which removes some credibility from these formations. BTC has also been showing technical signs of strength (see linked report) but all the analysis in the world will not be able to foresee any fundamental surprises that can cause wild swings in both directions. Plus there is no confirmation at the moment that meets the conditions of my trading plan.

Another push beyond the 208 resistance, and this market is likely to reach the 230 to 240 resistance zone. A break of that compromises the recent bearish swing and sets the stage for the 300s.

Keep in mind the kind of swing that can occur upon tomorrows news can be extreme and it is very possible that wide stops can be taken out. That's why if I did take a position now, I would not place a stop until after the wild ride is over. In order to do this, you must be willing to lose your entire investment.

And if the market goes straight up, and you feel like you missed the bottom, do not worry, strong and healthy markets offer plenty of opportunity to profit, you do not need to buy the bottom. As long as the uptrend stays intact there will be more swings to buy.

On the low side, if this market does NOT go below 136 and finds support at a higher price after tomorrows news, I would see that as a sign of strength as well. A break of the 136 low is a negative sign, and that would prompt me to reevaluate my bullish outlook.

In summary, this market, just like BTC is presenting price structures that indicate strength. Higher lows typically lead to higher highs. The key is to see how this market reacts and settles after tomorrow's big event. If the support levels are tested and hold up, that will provide further evidence that buyers are in control and it is then just a matter of defining risk. I won't be able to do that effectively until after the big event.

Comments and questions welcome.