Chart:
http://imgur.com/VyUK0AzMarket Commentary (BTC):
No surprises this Thursday morning as bitcoin seems to be following our roadmap from earlier in the week, at least so far. Our hunch was that the market remains flat going into the latter half of the week, but also that volatility would pick up as we moved into the weekend considering the market is simply too constricted right now to remain in this tight 600 - 610 $ trading range. While it is still tough to get a good read on directionality, we remain in the bull camp for the time being due to the technicals which we will get to below. Having said that, regardless of which way it breaks over the coming days, we still do not see price extending beyond the 570 $ level to the downside or 630 $ to the upside.
Speaking of technicals, today we show the 4-hour chart for a look at the shorter term setup so that tomorrow we can focus on the daily chart in order to put everything into context. First of all we can see that price is in yet another symmetrical triangle consolidation, in addition to the ones on the higher timeframes, and is very close to reaching its apex (~ October 1st) which means a breakout move is nearing. Also note that SCMR is painting neutral candles while we chop around between 600 - 610 $, dynamic support and resistance are nonexistent around current levels, and market structure is mixed to say the least.
Moving on to momentum and volume, we can see that the 9/18 EMA cross has almost completely flatlined while the 200 SMA is still tracking withe the triangle uptrend line, both of which now sit just above the near term OTE long zone between 590 - 600 $. Additionally, the momentum oscillators remain very mixed given that the Stochastic is moving lower while RSI and Willy drift slightly higher, and PPO is neutral once again following slightly overbought conditions earlier in the week. Finally, trading volumes remain unimpressive and there is still a large volume profile notch between 570 - 590 $, however the A/D line continues to pick up steam to the upside which tells us that buyers are still accumulating rather heavily in this area.
For the time being we are sticking with our call for another day or two of sideways action followed by a move out of the triangles to test more substantial support and/or resistance zones. We continue to suspect that the move will be to the upside considering the longer term charts are becoming more attractive while the A/D line on the nearer term charts continues to rise. This is good news for our ProTrade longs, although as previously mentioned we would be surprised to see a move beyond the 620 - 630 $ area over the course of the weekend.
If things go the other way, however, we will get stopped at breakeven on the VST trade so that we can preserve capital for redeployment down in one of our longer term buy zones. All things considered, we still like our positioning going into what should be a relatively volatile weekend regardless of which direction the market decides to head, so for now we will sit tight and stay patient.
GLGT!
