from:
http://kongzi.ca/silver/TSR/20130424TSR.pdf-----
There’s a lot going on here so please allow me to explain my thoughts.
1. A, B, C, D
a. Green line A represents the original trend. I speculate this is the normal rate of adoption.
b. Orange line B represents market acceptance of what I believe was a large institutional buyer entering Bitcoin and driving the spikes higher with D.
c. Red line C was a speculative frenzy ending with a blow-off top.
d. The black line D represents steady accumulation by an institutional-class investor or investors and the current breakout above this line represents smart-money recognition and confirmation of this event and trendline.
Based on the above A-B-C-D analysis, and the recent psychology of the market, we expect a short term rise to approximately $250 over the next two weeks, followed by a secondary crash to above previous support levels of $90 and $95. Finally, a rise to long term stability in the $300 range.
2. Head and shoulders confirmation of reversal followed by return to speculative frenzy dynamic (red line C)
a. The three purple cups on the three purple lines drawn downward show an upside head and shoulders reversal, which is extremely bullish.
b. Support is marked in the $90 to $95 to $100 range.
3. Period of net selling followed by period of net buying
a. Self-explanatory and ridiculously bullish.
4. MI and MFI confirming all other signals.
a. Mass index declining after a period of net selling, into a period of net buying, which shows big money is waiting on the sidelines and is not in the market. This is bullish since big money would theoretically buy at these levels.
b. Money flow index at local lows, which implies the price increase has occurred despite net selling.
This implies that people who sold in the $100 to $150 range made a mistake; it’s not that demand is up and people are no longer willing to sell, it’s that people already sold and they don’t have any more to sell, and if they return to the market they would have to be buyers. We feel that is a great confirmation of all the other signals.
This is pretty much a textbook example of a bullish reversal.
Here’s another fun little chart you might enjoy;
There are four technical points on this chart. One, the MACD crossovers confirming the downtrend (red circles) and uptrend (green circles) show that yes, we are in the middle of an uptrend. The crossover is bullish and the last crossover lasted for more than two weeks, suggesting there’s at least another week left in this rally.
Second we have the accumulation/distribution indicator showing increased accumulation. This is consolidation. Make NO mistake. This is incredibly bullish.
Strong hands have been buying this whole time, all throughout the previous bubble, crash, and even now with the recovery. They haven’t sold. If you think the price went higher on short term speculation you ain’t seen nothing yet – you are now dealing with people who bought at $100 on the way up, bought at $260, bought in the crash at $57, bought at $120, and are still buying right now into the recovery at $155. If they didn’t sell at $260 only God knows how high the price will run this time.
The final indicator is the Enveloping SMA 20, which never really stopped going up.
I must admit I sold a few coins into the $130s last week, but this new analysis stopped me dead in my tracks. I bought all my coins back at $150 and I’ll stand by that. Please remember I can’t tell you what to do with your money. I am just letting you know how I think and why I did what I did. It’s up to you to make your own trading decisions.
