rpietila Wall Observer - the Quality TA Thread ;)

[AnonyMint]

breakdown.

triangles have a tendency to breakout into larger triangles, forming a fractal pattern of self-similar nested triangles. proper breakouts need to be accompanied by large volume to be confirmed. be patient

test positive of upper wedge - no such evidence for the lower part.

if this does break into a larger fractal, the wedge should resume in the direction it came - down. Im taking profit of longs.

So you are saying that if it turns up after establishing a new larger triangle it will still be contained within the upper trendline and eventually be lower.

My problem with TA is that it is about 50% accurate.  

Rather I look to see if the sentiment matches my reading of the chart and I'd rather look at some macroscopic pattern such as noting the psychology of the market might be similar to the silver market from 2011 peak on down.

Remember how everyone had a reason that silver couldn't go lower, yet it did because the markets had shifted. Capital began to return to the USA from emerging markets and the Fed was able to slow down on QE and prepare to reverse. Thus there wasn't going to be a mad rush into precious metals any time soon. In short, the expectations had exceeded the reality.

What we have here is a massive rush into Bitcoin last year as it went from obscurity to being discovered by the mass media. The short-term expectations exceeded the reality.

Now we have the reality of numerous problems hit and now everyone exhales and tries to call the bottom. And so we go down and find the point at which everyone says, "I don't care if it goes lower, this is too darn good of a price to not buy".

And I believe that price is $300 and below.

To get there we need capitulation where all those who have an excuse why it can't go lower, have to finally panic. When they panic near the bottom, then you should buy.

Add:

Examples of such excuses. We can see them actively in denial of the market movement.

Rumors of Bitcoin's libertarian death have been greatly exaggerated.

Taking responsibility is so haard.

White House Petition to AMEND IRS NOTICE 2014-2 Taxing virtual currency/Bitcoin

The mass media basically did this "Buy, buy, buy" since summer 2013 and now the "Sell, sell, sell". I mean to say there is a lot of emotion and extreme expectation in the demographic of people who entered because they saw something on the mass media. Emotions and expectations diehard then reverse too late in a frenzy. The assumptions these adopters made upon entering was more akin to overhearing something than deep analysis:

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[AnonyMint]

If i can´t proove that Kennedy wasn´t killed by a talking green horse it might as well be as true as every other explanation!

I am just really curious if you understand the engineering of a steel beam structure?

I mean you speak with such venom and ridicule, then certainly you must be knowledgeable?

So can I give you some test engineering questions and expect you to answer?

Don't get shy now fonzie. I remember you as an outgoing cool guy from Happy Days.

Can you tell me how fires and debris could bring the Eiffel tower down vertically in free fall entirely with not any portion standing nor falling off center?

Add: I will have to go restudy my reasons from before if you decide to get into this with me. As I remember offhand when I had studied it before the finite element analysis of the NIST model made assumptions which were impossible.

Basically it boils down to common sense. You can't get domino failure across a lattice structure and free fall.

[chessnut]

AnomyMint, Please dont accuse me of bias Im very aware that TA is just risk management

 

And unlike seleme would have you believe I have my eyes peeled on much larger orders of the market, although I find it lucrative to be fine tuned by entries and exits.

[JoeyD]

@AnonyMint: Actually I have a very similar outlook on the Chinese markets going forwards, but I was pointing out the flaw of Westerners (and USD probably easily owns well over 80%) today looking at the Chinese exchanges and letting their most likely fictitious numbers influence them. You're talking mostly about future possibilities however, not the current state.

I've heard people like Tuur DeMeester claiming that it's arbitrage that is pulling the btc-price on all other exchanges towards the Chinese ones, but I'm having a hard time buying that. I think most of the btc-market is in USD and they let themselves be lead by the nose, mostly by looking at bitcoinwisdom. So my question remains, why are the Westeners so fixated on the btc-price and volume on Chinese exchanges, when they are practically guaranteed that those numbers are faked?

If the blame lies with bitcoinwisdom and others portraying the Chinese numbers as reliable, then those sites should probably be notified of and take action against helping the fraud. Even if it only effects the non-Chinese market.

[AnonyMint]

Regarding Risto's comment about adoption continuing and thus a demand increase and JoeyD's point about markets being unduly influenced by false data from Chinese markets, I just want to offer the thought that market price is (in economic theory) set by the marginal supply and demand, and thus in this case rushes in and out by speculators, not by the fundamental supply and demand.

Over the long-term marginal supply and demand is affected by fundamental supply and demand.

[SlipperySlope]

I watch Huobi, which is one of the Chinese exchanges that is a leader in no-fee trading. I find the volume numbers on Huobi plausible. I am not a trader now, but I believe no-fee trading greatly facilitates the high volume.

[Trolololo]

Can you tell me how fires and debris could bring the Eiffel tower down vertically in free fall entirely with not any portion standing nor falling off center?

Maybe this

I watch Huobi, which is one of the Chinese exchanges that is a leader in no-fee trading. I find the volume numbers on Huobi plausible. I am not a trader now, but I believe no-fee trading greatly facilitates the high volume.

1 Huobi permits leveraging (at 70-80% annual rate interest). That could explain part of its huge volume.

2 Huobi charts also show too much rounded numbers.
I.e. December and January maximums where 8000, 7000, 6000.

3 I wonder where does has that huge amount of bitcoins come from.
If was to sell my mined bitcoins in China's exchanges, I would need a china bank account to withdrawal yuans.
Nonsense for most of western miners.

So I suspect that Huobi has an insider bot (or something similar) that amplifies their customers' orders.

[User705]

@Trolololo
Or there's a ton of Chinese gear mining like crazy and insta selling because they could care less about bitcoin and just want fiat.  Over 2 million usd per day gets mined.  Even if there's only 20% of total mining power in china which seems low that's half a million per day that needs to be bought by someone.  Either the miners "buy it" which is another way of saying they are keeping it or someone else needs to buy it.  Coupled with regular selling and the general bitcoin pressure is always down.  It moves up in spikes on what's basically a short squeeze.  How many of those can there be in a year?

[JoeyD]

I watch Huobi, which is one of the Chinese exchanges that is a leader in no-fee trading. I find the volume numbers on Huobi plausible. I am not a trader now, but I believe no-fee trading greatly facilitates the high volume.

Watch the CoinSummit youtube video with Bobby Lee and especially the telltale signs he mentions to see how Huobi in particular is suspect (possibly worse than mtGox), zero-fees are actually needed for this kind of fraud, otherwise your own investors might get wind of it (because you aren't making the profits your website says you are if you sell to yourself).

[rpietila]

It bugs me that I was too early with the final capitulation last week. Now all the signs are the more prevalent. Hitting a low repeatedly in subsequent days without one massive flashcrash with massive volume was a typical for the last one. (Cf. now).

The bottom was 62% of the last stable level (note: fibonacci ratio). If the stability level this time is 640, the bottom would be seen at about 400. Indeed, next week of oscillation full of fear between 400-480 would be perfect for shaking out every single remaining weak hand and pave the way for continued gains (last time chart shown for reference  ):
1 month = +50%
2 months = +100%
3 months = +100%
4 months = +400%
5 months = +1000%.

[windjc]

It bugs me that I was too early with the final capitulation last week. Now all the signs are the more prevalent. Hitting a low repeatedly in subsequent days without one massive flashcrash with massive volume was a typical for the last one. (Cf. now).

The bottom was 62% of the last stable level (note: fibonacci ratio). If the stability level this time is 640, the bottom would be seen at about 400. Indeed, next week of oscillation full of fear between 400-480 would be perfect for shaking out every single remaining weak hand and pave the way for continued gains (last time chart shown for reference  ):
1 month = +50%
2 months = +100%
3 months = +100%
4 months = +400%
5 months = +1000%.

Ah, but everywhere you look the prognosticators are saying down down down. A breach if 380 sends us into a death spiral they say. Bid sums drying up. Everyone taking their money off exchanges. China drying up. No new fiat, no new excitement as mainstream investors already know about Bitcoin.

No good news reactions only bad new reactions are a clear symptom of this they say. This could go on indefinitely they say.

Are they correct?

[RAJSALLIN]

What I think is really not important but I'll add it anyway. I think there is a risk of the price falling down under 300 like Anonymint has been warning. 250 should be strong support and a flash crash to that area doesn't seem impossible. On the other hand sentiment is pretty darn close to rock bottom. Everyone seems to be in despair. Believers are changing their minds and people who where sure the bottom was in are speaking of new lows (me included).

[windjc]

What I think is really not important but I'll add it anyway. I think there is a risk of the price falling down under 300 like Anonymint has been warning. 250 should be strong support and a flash crash to that area doesn't seem impossible. On the other hand sentiment is pretty darn close to rock bottom. Everyone seems to be in despair. Believers are changing their minds and people who where sure the bottom was in are speaking of new lows (me included).

The most "fear" inducing thing I see are the paltry bid sums. They've literally dried up.

[chessnut]

It bugs me that I was too early with the final capitulation last week. Now all the signs are the more prevalent. Hitting a low repeatedly in subsequent days without one massive flashcrash with massive volume was a typical for the last one. (Cf. now).

The bottom was 62% of the last stable level (note: fibonacci ratio). If the stability level this time is 640, the bottom would be seen at about 400. Indeed, next week of oscillation full of fear between 400-480 would be perfect for shaking out every single remaining weak hand and pave the way for continued gains (last time chart shown for reference   ):
1 month = +50%
2 months = +100%
3 months = +100%
4 months = +400%
5 months = +1000%.

Ah, but everywhere you look the prognosticators are saying down down down. A breach if 380 sends us into a death spiral they say. Bid sums drying up. Everyone taking their money off exchanges. China drying up. No new fiat, no new excitement as mainstream investors already know about Bitcoin.

No good news reactions only bad new reactions are a clear symptom of this they say. This could go on indefinitely they say.

Are they correct?

well I believe thats all very bullish. when everybody feels ripped off by their bad fortunes - blame the market and blame the news. bearish sentiment.
a death spiral is a slippery slope argument. not gonna happen, whales like to intercept large sell offs, it's much easier than accumulating.

[windjc]

It bugs me that I was too early with the final capitulation last week. Now all the signs are the more prevalent. Hitting a low repeatedly in subsequent days without one massive flashcrash with massive volume was a typical for the last one. (Cf. now).

The bottom was 62% of the last stable level (note: fibonacci ratio). If the stability level this time is 640, the bottom would be seen at about 400. Indeed, next week of oscillation full of fear between 400-480 would be perfect for shaking out every single remaining weak hand and pave the way for continued gains (last time chart shown for reference   ):
1 month = +50%
2 months = +100%
3 months = +100%
4 months = +400%
5 months = +1000%.

Ah, but everywhere you look the prognosticators are saying down down down. A breach if 380 sends us into a death spiral they say. Bid sums drying up. Everyone taking their money off exchanges. China drying up. No new fiat, no new excitement as mainstream investors already know about Bitcoin.

No good news reactions only bad new reactions are a clear symptom of this they say. This could go on indefinitely they say.

Are they correct?

well I believe thats all very bullish. when everybody feels ripped off by their bad fortunes - blame the market and blame the news. bearish sentiment.
a death spiral is a slippery slope argument. not gonna happen, whales like to intercept large sell offs, it's much easier than accumulating.

Have bid sums fallen dramatically prior to past bottoms?

[chessnut]

Have bid sums fallen dramatically prior to past bottoms?

I honestly dont know, but if you believe the model of sentiment to forecast turns, it's no surprise that many people pull their buy orders near the bottom. buy orders can change in a flash, and sell pressure may be exhausted regardless of orders.

[podyx]

Risto, I have a question

I'm curious on how much you spend each month on quality cigars?

[creekbore]

Risto, I have a question

I'm curious on how much you spend each month on quality cigars?

And hot towels.

[rpietila]

It bugs me that I was too early with the final capitulation last week. Now all the signs are the more prevalent. Hitting a low repeatedly in subsequent days without one massive flashcrash with massive volume was a typical for the last one. (Cf. now).

The bottom was 62% of the last stable level (note: fibonacci ratio). If the stability level this time is 640, the bottom would be seen at about 400. Indeed, next week of oscillation full of fear between 400-480 would be perfect for shaking out every single remaining weak hand and pave the way for continued gains (last time chart shown for reference   ):
1 month = +50%
2 months = +100%
3 months = +100%
4 months = +400%
5 months = +1000%.

Ah, but everywhere you look (1) the prognosticators are saying down down down. (2) A breach if 380 sends us into a death spiral they say. (3) Bid sums drying up. (4) Everyone taking their money off exchanges. (5) China drying up. (6) No new fiat, no new excitement as mainstream investors already know about Bitcoin.

(7) No good news reactions only bad new reactions are a clear symptom of this they say. (8 ) This could go on indefinitely they say.

Are they correct?

(1) This is one requirement for a bottom, similarly as everybody saying "up" is a prerequisite for a top.
(2) I have developed a wonderful proof that this is not true, but sadly my time does not allow to elucidate.
(3) Actually it seems that ask sum is drying up and there is very much (15k) bids in 400-470. Anyway these are easily manipulated.
(4) As well as their coins. This is typical for a bottom.
(5) I don't believe there is any additional "drying up" left in China. If someone wants out, he is already out. If someone wants Bitcoin, he is in.
(6) It takes 12-24 months on average from hearing to acting. That's why the upside will be so explosive (like 2013/1-4 as a result of 2011)
(7) Yes, in the bottom the news reactions are bad no matter what happens.
(8 ) Every day we go lower, there has to be new sellers selling a growing number of coins to satisfy even stagnant demand. I would not bet it happening indefinitely.

[rpietila]

Risto, I have a question

I'm curious on how much you spend each month on quality cigars?

And hot towels.

I don't know what are hot towels, but cigars cost between EUR 10-60 and I consume about 20 per month. I would say that it is slightly less expensive than owning a car (I sold the family cars a few months ago).

Funny thing is that by smoking cigarettes which do not have any known health benefits (on the contrary they are harmful!) you are set back about EUR 200-300 per month. So just by doubling it, you get to enjoy the best of the best, instead of worst of the worst