How to trade Crypto Currency using Technical Analysis?

What is Crypto currency – Bitcoin? Will the buying mania continue? Or Will Bitcoin be responsible this time for the Global crises! Crypto currency is a new age, decentralised, digital currency which works on the mechanism of cryptography. Being decentralised it is not governed by one single monetary or legal authority – See astonishing charts and similarity between movement of Bitcoin and US – DJIA

Cryptocurrency is a new age, decentralised, digital currency which works on the mechanism of cryptography. Being decentralised it is not governed by one single monetary or legal authority. It works through a series of communicating nodes which runs bitcoin software and maintains the blockchain which is the public ledger recording bitcoin. Through mining, the record keeping system, miners keep the blockchain updated, consistent and unalterable. Miners use complex algorithms to mine (or “discover”) bitcoins which are then added to the blockchain. There are various other types of cryptocurrencies like Litecoin(LTC),Ethereum (ETH),Ripple(XRP) etc but Bitcoin remains the most used and traded.

Bitcoin is the first and the most famous cryptocurrency used till date. ……..Recently bitcoin trading has increased significantly, mainly because of the following reasons-

(please refer actual Monthly research report for more details)

See the below charts and you will be thrilled how highly correlated the movement has been between US major index – DJIA and Bitcoins

The above charts clearly highlight the Fractal Nature – It means that irrespective of the markets or assets the basic emotions that drive the prices remains the same. It is Greed, Hope, Fear that are responsible for movement of any asset class.

The above chart shows classical example that everyone is too focused only on Bitcoin but people are forgetting the fact that movement of US major index is mimicking that. The magnitude might be different but the slope of rise looks similar. There also seems to be high correlation between movements of both of these assets which is highlighted by black box.

The Bitcoin mania can be compared to that of the Tulip light bulb mania of 16^th century. Prices of Tulip ………………..

I am not here to catch a top in mania but definitely the risk does not justifies entering at current levels. It might very well move higher as measuring people extreme emotions like greed can be everyone’s guess but I think we are nearing that phase and the apocalyptic decline in Bitcoin might be a trigger for Global selloff this time. Food for thought – How will this be correlated to other assets! My take is when you run for cover you do not care what are you selling to save your …..!!!

There are missing text above. To get complete research on Bitcoin subscribe to the Monthly research report.

“The Financial Waves Monthly Update” is now published. Understanding what is Crypto currency- Bit coin. Nifty outlook with the application of Neo wave, Hurst’s Time cycles. Outlook on Banking Index. Sadbhav Engineering Long term pick. Dow Jones an uncontrollable bull trend. Mutual Fund Section Subscribe to “The Financial Waves Monthly update” and see yourself the long term forecasts and world markets at a glance.

Plot and see yourself chart of Bitcoin here

Dow Jones Industrial Average: Trading Flat correction Elliott wave pattern!!

US Equity market continued to move in high volatile environment. In this kind of situation one can get carried away at the highs or can create panic exactly at the lows. Hence application of objective tools is important to trade the markets. We have been applying Elliott wave theory along with basic technical analysis to capture the markets. Recently we were able to capture the down move from 18100 to 17265 levels. “The Global Waves Short Term Update” by Waves Strategy Advisors cover Dow Jones Industrial Average, EURUSD, Comex Gold and Comex Silver with applied Elliott wave counts and important turning points.

DJIA 60 mins chart: (Anticipated in the evening of 2^nd January, 2014)

DJIA 60 mins chart:

Wave Analysis:

For Dow Jones Industrial Average, in the last 2 trading session prices showed weakness and has been moving lower sharply. This suggests that rally started from 17050 level is complete at 18100 levels and correction on downside has started.

“Basic techniques like channeling continued to work very well on Dow Jones Industrial Average. We can see that since September 2013 prices are intact in upward moving channel as shown in black color. Recently prices found resistance at the same channel and has been moving lower. So from short term perspective, as long as high of 18100 is protected on upside trend is bearish now. Prices made a new high at 18100 however RSI was unable to make new highs which suggests negative divergence and has been losing strength on upside.”

On 60 min basis, the sharp fall in the previous trading session raises higher probability that may be wave b has completed and the next leg (wave c) has started on downside but we will have to wait for the move below 17780 levels in order to get confirmation of the same. Hence as long as prices sustain below previous peak trend will be negative and any pullback towards the same should be utilized as selling opportunities.

In short, for Dow Jones Industrial Average, near term trend will be negative with the important resistance of previous high (18100) levels. Move below 17780 levels will suggest down move to continue towards 17300 levels.

Happened: US Equity Market moved in line with our expectation and moved lower from 18000 to 17262 in 4 trading sessions. Post that prices have reversed on upside so what to expect now?  Will it break 18100 on upside?

The Global Waves Short Term Update gives detailed analysis on DJIA, EURUSD, Comex Gold and Comex Silver. Visit www.wavesstrategy.com for subscription to this Global research report.

Why US market – DJIA is at very crucial juncture?

An insight into US major index – DJIA - Global markets have continued to be under turmoil over past few weeks without any strong negative event.

It is prudent to look at the long term charts to understand the short term counts when prices reverse from crucial junctures. We are therefore showing the weekly chart of DJIA that represents the entire movement post 2000 onwards.

DJIA Weekly chart:

DJIA daily chart:

Wave Analysis:

As shown, prices have reversed from the important trendline resistance which has been connecting the tops of 2000 and 2007. The recent whipsaw around the same trendline and a sharp move on downside confirms the major trend might be either topping or already topped out.

The up move from 6470 is probably forming primary degree wave (X)that is internally moving in double correction on upside. An X wave connects two standard corrections together. The internal counts of this wave (X) suggest that prices have probably completed intermediate degree wave (c) of second standard correction.

5% Shifted 30 period Exponential Moving average: We have applied 30 period Exponential Moving average but shifted it by 5% which has been acting as very important support and resistance to prices since 2002 onwards. Prices are now kissing this important displaced average line and a decisive close below it will be a strong indication that the intermediate top is in place.

Series of RSI divergences: The turn in prices is accompanied by series of negative divergences on the momentum indicator which is providing secondary negative confirmation. Now a lower low and lower high formation on the weekly scale will be a strong negative indication.

Short term outlook:The daily chart of DJIA shows the rise in form of intermediate wave (c) has been Ending diagonal pattern. UK major index – FTSE has already achieved the downside projection post the breakout from the Wedge pattern. The start of wave (c) on DJIA is from 12500 in late 2012. If the wedge pattern is indeed complete than we can see a sharp selloff across the US stock market. Sharp fall in US treasury yields is also indicating flight to safety.

In short,we are keeping  a close watch on US equity markets and a breakdown in DJIA will be a first indication that we are revisiting the 2008 scenario all over again! The most important level is15350 which is the low of wave iv.

At times it is important to see the Global markets since during period of uncertainty the correlation between various asset classes increases drastically. It will be very crucial to keep an eye on DJIA togauge the overall momentum across world markets.   

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Billion Likes for Facebook!

FaceBook the social giant which has widened its business, its revenue, its presence, its acquisitions, its likes etc aggressively over the years. 

 Facebook Daily chart:

On day one at closing bell, shares were valued at $38.23, only $0.23 above the IPO price and down $3.82 from the opening bell value.After seeing failure of many social networking sites like Orkut, Hi5 many doubted the success of Facebook IPO but it proved everyone wrong!

As per Elliot Wave perspective, Facebook completed primary wave III at 72 levels and since then moving lower in wave IV. Internal structure of primary wave IV suggests that intermediate wave A completed at 54 levels and now stock is moving higher in wave B. There is higher probability that wave IV is forming complex correction pattern (A-B-C). After completion of intermediate wave B, prices should move lower in wave C.

Don’t trade based on the outcome of the news and stay ahead of the next move. Subscribe to“The Global Waves STU” this report covers view on DJIA, EURUSD, Comex Gold and Silver. Visit http://www.wavesstrategy.com/index.php/store.html for subscription options.

Neowave counts on US index - DJIA

Neo wave perspective on DJIA

US markets has shown unprecedented rise from the lows of 6500 seen in March 2009. The below chart shows the Neowave countings and the Diametric pattern it has been forming.

DJIA – Weekly chart

Diametric patterns are 7 legged corrective structure. Due to complexity of this pattern the prediction prior to its occurrence is difficult to predict. However as the pattern is nearing its completion the wave structure gets very clear. The pattern has reached a matured stage but since we are talking about a trend lasting since 2009 Time and price leeway is very important.

Also look at the volumes that has constantly reduced during the entire up move which further confirms its corrective nature. Nevertheless the trend will be up unless 15500 is broken in faster time.

Diametric pattern has similarity of price and time which can be clearly seen above. On upside 16900 – 17500 will be the important levels to watch!

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What is long term charts of Reliance Industries, Sensex, Gold, DJIA, USDINR suggesting?

By Waves Strategy Advisors, For more information please visit www.wavesstrategy.com

From investing and trading perspective it is necessary not only to look at short term charts but to also align oneself with what the long term trends are suggesting.

It is imperative to know when the long term trends are about to reverse so that the surprise element is not there and people do react along with newswire that this was completely unexpected. Markets tend towards surprising majority of the crowd and it is upto us to evaluate all plausible scenario systematically to derive the highest probable outcome.

The below is a brief of what our “The Financial Waves” monthly report is showing:

India continues to stand independently in the Global markets with Indian currency the worse performing asset class among Asian peers. Prices of Gold has touched life time highs in terms ofINR as the currency hits life time lows i.e. USDINR made life time highs. Equity market continues to be in strong downtrend and is moving in the down wave which was pending before finally bottoming around mid of 2014.

In this research we have explained why the rally in Gold is only localized and not Global. Gold in terms of USD has so far not even retraced its high made in May 2013, let alone the highs of 2012 and 2011 when Gold topped out at $1900. Also a true rally in Gold happens when it rallies against all the major currency and does not exhibit a local phenomenon due to domestic currency.

Indian currency crisis: When the currency was at 55 we have updated about impending currency crisis and the mainstream experts are realizing it now.  Also the selloff in currency clearly explains why government interventions does not change the major trend but produce only short term spikes. If government actions could have changed the trend then Japan would not have faced more than 2 decades of deflation!

Food security Bill is said to be the main culprit for depreciation in currency and economic instability as the bill will cost 1.30 lakh crore. We do not rule out the fact that it is a huge subsidy bill which is announced exactly at the wrong time but this does not justify the sharp selloff in Equity and Currency. The trend on downside in Equity was due which we are seeing now and the fundamental logical explanation will keep coming as and when market keeps falling. Also remember the most bearish fundamentals come exactly when the market is at the bottom. However, news cannot be used to do objective trading but Elliott wave along with Time cyclesprovide the details on how matured the current trend is and what to expect next.

DJIA continues to fail around 15500 – 15600 levels and has fallen by more than 900 points from the top. Drop below crucial level mentioned below over next 2 weeks will confirm that the major trend in DJIA has probably changed from up to down. A synchronized move across world markets will always provide better trending moves.

Reliance Industries was one of the leading stocks in the bullrun from 2003 to 2008. This stock has been a major underperformer since then. However, Reliance Time cycles shown below also suggest the major bottom should be formed by ……...

To get insight into this Monthly update please visit  http://www.wavesstrategy.com/index.php/store.html and subscribe to the long term trends showed in “The Financial Waves Monthly Update”. For more information write to us at helpdesk@wavesstrategy.com or call us on +91 22 28831358 / +91 9920422202

Useful for: Long term traders, long term investors, elliott wave, Equity traders, technical analyst 

Related to: Equity market,Reliance,Sensex,Gold,DJIA,USDINR,currency,Elliott wave,technical analysis,long term analysis

DJIA in big expanding pattern!!!

DJIA in big expanding pattern!!!

By Waves Strategy Advisors, For more information visit www.wavesstrategy.com

In 2008 world equity markets crashed due to financial crisis and felt the heat of recession. In this period, DJIA moved lower from 14250 to 6250 i.e. more than half in just one year. Thereafter, majority of the indices bounced back on upside sharply and breached the important high made in the year 2008 and continued the uptrend. DJIA is one of the index which has been performing exceptionally good since 2009 and currently moving near the lifetime highs.

In our view, sharp move on upside in DJIA from 2009 seems corrective in nature rather than impulsive. This corrective move has formed expanding pattern. Below we have shown DJIA Daily chart picked up from the Global report- The Global waves published on alternate days.

DJIA Daily Chart: Medium term chart

Wave Analysis:

Below write up is picked from the previous report

For DJIA, in the previous two trading session prices moved lower from the lifetime high of 15558 and closed on negative note. As seen in daily chart of DJIA, prices are moving higher in the upward sloping blue channel since September 2012 and currently it is in the last leg of intermediate wave e of primary wave (D).

Prices were moving in the stiff range of 15400-15658 from last two trading sessions and paused the up move. Momentum indicator RSI exhibits the negative divergence and moved lower. However….

As per wave perspective, prices have ended wave x near 14380 levels and currently moving higher in the form of wave a triple correction (a-b-c-x-a-b-c-x-a-b-c).

DJIA is in a strong uptrend. Elliott wave counts and channels suggested that more potential is left on upside in DJIA. Do not catch the top in strong bull market and trade objectively. To know the next important levels and Elliott wave counts subscribe to our global report – The Global Waveswhich also covers Comex Gold, Silver and EURUSD. For more information visit to http://wavesstrategy.com/index.php/store.html

DJIA at Crucial juncture!!! Elliott wave counts

By Waves Strategy Advisors, for more information visit www.wavesstrategy.com or write to helpdesk@wavesstrategy.com

Equity market bellwether i.e. Dow jones industrial average (DJIA) has made life time high in the current year. DJIA is the index which has outperformed against emerging market index such as Indian Equity market which was failed to cross it previous high and moving lower from last 2 months.

DJIA has made life time high of 15521 in the month of May 2013. Since then prices have note breached the same level and moving sideways to downside. Prices are respecting our strong resistance zone which we have been mentioning in our Global report – The Global Waves since past many days.

Elliott wave theory, Fibonacci retracement and many other technical tools helped us to plot the crucial resistance level on DJIA.

DJIA Daily Chart: Medium term chart:

DJIA Daily Chart:

Wave Analysis:

On Wednesday, we had speech of Federal reserve chairman Ben Bernanke, he said that it will not pull back its $85bln a month bond buying programme just yet, but made clear that if America's unemployment rate continues to improve and inflation edges closer to 2%, then it will start tapering its monetary stimulus programme.  After this statement we have observed sharp movement on downside in DJIA and index closed on negative note. Technically, prices failed to persist within the upward sloping black channel, breached the immediate support of 15000 and arrived near the next support of 14700 and prices closed lower by more than 2%.

As seen in daily chart, in last two trading sessions we have observed fall of more than 500 points in US equity market. This indicates the end of wave …..of double zigzag pattern (a-b-c-x-a-b-c) and…... Prices had given respect to resistance zone of …… which we have been mentioning since past few weeks in the reports.

We can observe above in medium term chart, prices are moving higher since 2009 and it is in strong uptrend since past 3 years. Hence, to catch the top in secular uptrend we need more negative price confirmation which will be obtained below ……. levels. Unless that does not happen positional trader should refrain from creating short positions as of now.

In short,…………

DJIA is now approaching crucial resistance levels. Trading strategy has to be formed in accordance with the crucial level on upside. Do not miss the next turn in this index. Get access to International currency – EURUSD, Comex Gold and Comex Silver in the Global research report- The Global Waves The report will be mailed daily and you can get access online on the website as well under client login section. To know more get in touch with our product specialist NOW!!!

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DJIA (US Markets): AT LIFE TIME HIGH! BUT Nifty still down 10% !!!

DJIA (US Markets): AT LIFE TIME HIGH! BUT Nifty still down 10% !!!

By Waves Strategy Advisors, For more information visit www.wavesstrategy.com To subscribe to alternate Global research “The Global Waves” write to helpdesk@wavesstrategy.com or call on +91 9920422202 / +91 22 28831358

The crisis of 2008 supposed to have originated in US and Europe which later spread across the globe.

US unemployment rate and other macro economic data still indicate that they are still not completely out of the woods. However, whatever may be the case, interestingly US equity market – Dow Jones Industrial Average is at LIFE TIME HIGHS!!! In contrast, India was supposed to be a growth story and relatively insulated to an extent from the world financial crisis but Indian equity markets trading almost 10% below the life time highs. During such scenarios it is therefore important to use objective tools like Elliott wave analysis and technical indicators when normal fundamental logics goes for a tailspin…

DJIA Weekly Chart:

DJIA Daily Chart:

Wave Analysis:

As shown above in weekly daily chart of DowJones Industrial Average (DJIA), prices have breached the previous high of 14200 which was made in the month of October 2007 and made a life time high of 14540. This index has characteristic to move in an expanding pattern. Since 1999 prices are moving in an expanding pattern (shown by black color trendline). Up move from 2010 seems corrective in nature and prices have formed similar expanding pattern as seen from daily chart.

As per wave perspective, prices have ended primary wave (5) in the month of 1998 levels. Since, then it is moving in expanding pattern in a corrective manner (A-B-C-D-E). In 2009, prices have finished primary wave (C) near 6000 levels. Thereafter, it has moved higher in the form of primary wave (D).

As seen in daily chart, prices are at life time highs and there is still some steam left. Interestingly, wave (e) = wave (a), wave y= wave w and wave (e) = 161.8% of wave (c) comes near the resistance zone of 15200-15500 levels. Looking at current scenario, trend remains positive over medium term and prices can move higher in the form of minute wave z of minor wave (e).

In short, even though prices are in matured stage of uptrend there is still more room left before the major trend on downside begins. We are not seeing any reversal signs as of now and move below 14000 will provide first negative sign. 15200 – 15500 is the maximum where the current trend can go… 

Don’t let a near term opportunity in DJIA pass you by. Get instant access to Global research (The Global Waves). Along with equity index, this report also contains EURUSD, Comex Gold, etc…  To subscribe this report write to us at helpdesk@wavesstrategy.com or call us on +91 22 288313588 / +919920422202 or visit www.wavesstrategy.com

DJIA mimicking wave 2 correction exactly like 1987!

DJIA 1987 & 2010

DJIA mimicking wave 2 correction exactly like 1987!

Can you identify the difference in wave 2 in the above charts shown

The first chart is of DJIA in 1987 just before the crash. Wave 2 ended at 2650 and market fall to 1620 in less than 11 trading sessions

Market has mimicked exactly the same corrective pattern NOW

I was shocked to see even the retracement levels are perfectly in sync with end of waves "a" & "c" in spikes

It looks nothing changed in more than 2 decades in terms of people behaviour and psychology. It is correctly said - technology cannot change the inherent behaviour of people & they will act exactly the same way even if a millennium is passed!!!

Dow down 1 0 0 0 points (but recovered) VOL up 58%

DJIA

We are in unprecedented times where surprise should be the last element in your emotional and mental frame work. Dow was down 1000 points at one point and time. This can be justified by saying a human error or a system glitch or blamed on automated systems, etc. but this just shows how vulnerable we are.
Even If it is a system / human error or even if trades are canceled at such extreme prices or if it is a actual fall as there were no buyers left the pulse was set racing at pressure even doctors cannot measure!!!

Volatility index up by 58%

Point: BE PREPARED FOR UNEXPECTED AS WE HAVE BEEN SAYING SINCE LAST WEEK AND THIS IS HOW BADLY COMPLACENCY IS PUNISHED. These are not times to relax but to be prepared !!!

Happened: Negative Confirmation!

DLF

Hindalco

ICICIBANK

Sensex

Explanation:

As mentioned on 2nd April (Sunday) Sensex did open a gap down on Monday and we did see an impulsive move down continued today taking Sensex below 17200. This wave down today looks like a start of minutte degree wave 3. Given the steep fall in US and European markes expect selling pressure to intensify further tomorrow.
DJIA is falling with rising US Dollar, steep rise in VIX, rise in Bond prices, steep fall in copper, silver, oil all pointing only in one direction!
We also said how badly complacency will be punished and that is what has started.Immediate target for Sensex now lies at around 16000 where it shall find some support before another leg down.
I have said in my previous blogs many times that the top outperformer - METALS will be the worse performer. The time has gone for bottom picking but using every rise to go SHORT.

DJIA - An end of an "ERA"!

DJIA

Explanation

I thought of analyzing other markets till the time Indian markets test our patience!

Please observe since 1929 DJIA has moved in the bullish channel with utter precision and a throwover in the final Cycle degree wave V
The end of rally in early 2000 represents an end of an era i.e. not only end of a Cycle degree wave but of a super cycle degree that started somewhere around 1800s
Also we are in Wave C of an ABC correction that started after wave (V) of supercycle degree
When dealing with waves of such degree it is imperative to use log scale and wave measurements in percentage terms & not arithmetically
As per "Elliott wave principle" stated "impulse wave relationships usually occur in percentage terms"
The modest target for DJIA is 3500 and can even go further down in the territory of previous Wave IV. I will not be surprised even if it reaches in 1000 range. "We are dealing with supercycle corrections here"
This same explanation is valid for some of the other developed markets as well
Also momentum tools helps in wave counting, if used wisely. We can get classic divergences when in wave 5, if in wave 3 we should see a clear breakdown in momentum -- staying in extreme territories
The above interpretation is as per my understanding and may have other probable scenarios