Consolidating Trend -- A Page From Arepo's Notes

[T.Stuart]

so that's where we're headed now. bumpy consolidation into a final capitulation event, and then we can finally be done with the craziness of the December crash. however, if the bubble paradigm we've seen so many times before holds we will not see sub $450 and we will likely not see sub $600.

Arepo - excuse my wish for precise figures but can you please give me a target I can quote you on?

You know where I stand!

That's a bit unreasonable. That's a pretty specific range for a bottom.

those are just lower bounds. i do have a much more specific target. i can answer the questions "What is the target price for capitulation? What is the expected timeframe? and What price action would invalidate this model?" if i can raise the bounty described in my previous post. i hope this arrangement seems reasonable. i really can't just go around posting my notes in their entirety on a public forum

forum members who are interested can feel free use this thread to make pledges so that a number of individuals can contribute small amounts but be confident that the bounty will be reached and the information will be released.

--arepo

Frankly I think that's a bit steep! We have to pay you to be more specific? But you put plenty of effort - must be hours every week on here not to mention the calculations - into reporting impending capitulations and then we ask questions and have to pay?

This is a one-off test of your methods. Rise to the challenge. You have called me out before for not explaining my position better. I have tried - and spent time doing so (time writing is money for me as it's my profession!) - but never asked anyone for anything or even put an address for donations. This is a chat forum!

[arepo]

Frankly I think that's a bit steep! We have to pay you to be more specific? But you put plenty of effort - must be hours every week on here not to mention the calculations - into reporting impending capitulations and then we ask questions and have to pay?

This is a one-off test of your methods. Rise to the challenge. You have called me out before for not explaining my position better. I have tried - and spent time doing so (time writing is money for me as it's my profession!) - but never asked anyone for anything or even put an address for donations. This is a chat forum!

0.08 BTC is only steep if you're the only one who wants the information, which is what it seems like at this point, unfortunately.

But you put plenty of effort - must be hours every week on here not to mention the calculations...

you've got it! i work almost 12 hours a day and the pitiful part is that i don't have enough spare capital to do this for a living. i donate my time and effort all the while working under contract with someone else's capital. i hope by the end of this i will have enough to do it on my own, but for the time being i have to beg, because i have bills to pay, and frankly i spend way too much time doing this for what's actually going into my pocket

This is a one-off test of your methods.

my methods were thoroughly tested throughout this, and many other posts. i know that you are a bit new to this but price targets are generally only given through subscription services and other paid means. this is in part because of the game-theoretic complications the information asymmetry causes. if you were asking any other kind of question, i probably would not have proposed a bounty. further, im not just releasing this information to you, im releasing it to the entire forum. if 8 people want the price target, it'll only cost you 0.01 BTC each, a sum which you should easily be able to make back if the information is accurate.

if you really just want to "test" my methods, i'd be happy to pm you, personally, the answers to your questions for an amount which we can settle. what is this information worth to you, my friend?

[T.Stuart]

my methods were thoroughly tested throughout this, and many other posts. i know that you are a bit new to this but price targets are generally only given through subscription services and other paid means. this is in part because of the game-theoretic complications the information asymmetry causes. if you were asking any other kind of question, i probably would not have proposed a bounty. further, im not just releasing this information to you, im releasing it to the entire forum. if 8 people want the price target, it'll only cost you 0.01 BTC each, a sum which you should easily be able to make back if the information is accurate.

if you really just want to "test" my methods, i'd be happy to pm you, personally, the answers to your questions for an amount which we can settle. what is this information worth to you, my friend?

Thanks for the offer - really - but I think I'll just leave it.

The chances are it will be clear whether you are right or not compared to what I think and have explained. If we end up in the middle - then so be it! 

[michaelGedi]

I'll make a donation to you arepo if I profit, at this time I'm happy setting my own price targets, but your comments have been helpful as always..

[arepo]

I'll make a donation to you arepo if I profit, at this time I'm happy setting my own price targets, but your comments have been helpful as always..

ah Michael! it's nice to see you around these parts again i appreciate your support, as always, and i hope my work helps you profit, indeed. i think i'm about done with this issue of "Arepo's Notes" but keep an eye out for the next one!

[michaelGedi]

I'll make a donation to you arepo if I profit, at this time I'm happy setting my own price targets, but your comments have been helpful as always..

ah Michael! it's nice to see you around these parts again i appreciate your support, as always, and i hope my work helps you profit, indeed. i think i'm about done with this issue of "Arepo's Notes" but keep an eye out for the next one!

I'm always around, whether I post or not is a different matter     ..will keep my eye out for sure

[astralhash]

so that's where we're headed now. bumpy consolidation into a final capitulation event, and then we can finally be done with the craziness of the December crash. however, if the bubble paradigm we've seen so many times before holds we will not see sub $450 and we will likely not see sub $600.

Arepo - excuse my wish for precise figures but can you please give me a target I can quote you on?

You know where I stand!

That's a bit unreasonable. That's a pretty specific range for a bottom.

those are just lower bounds. i do have a much more specific target. i can answer the questions "What is the target price for capitulation? What is the expected timeframe? and What price action would invalidate this model?" if i can raise the bounty described in my previous post. i hope this arrangement seems reasonable. i really can't just go around posting my notes in their entirety on a public forum

forum members who are interested can feel free use this thread to make pledges so that a number of individuals can contribute small amounts but be confident that the bounty will be reached and the information will be released.

--arepo

I'm interested in your target price for capitulation. Would you say that the coming high volume capitulation would have us at lower lows?

[arepo]

I'm interested in your target price for capitulation. Would you say that the coming high volume capitulation would have us at lower lows?

i'm sorry, but i can't give out specific price targets for free, but i can quote you this:

so that's where we're headed now. bumpy consolidation into a final capitulation event, and then we can finally be done with the craziness of the December crash. however, if the bubble paradigm we've seen so many times before holds we will not see sub $450 and we will likely not see sub $600.

[DPoS]

Charts on bitcoin exchanges is fun and I got roped into them for a while but all these hours would be best spent finding out the inflows/outflows of BTC & fiat per exchange on an hourly basis.

In contrast, a stock like Twitter goes IPO and many of the variables are known. The amount of stock doesn't just get bought up on one exchange and then sold on another with both having limited constricted funds thus showing rapid dilution and scarcity.  The float available is public and also its % of the whole allocation with insiders having to broadcast their selling (kinda like cold storage doing 'days destroyed' and knowing they are being sold on X exchange) And there are no limits or friction on the amount of funds that can enter those markets

I bet knowledgeable eyes watch the blockchain to see where and when large amounts of bitcoin flow in and out (are the addresses public?  all of them?)
but no one will know the amounts of funds going in and out which would show appetite for support/pump/crashes


as I type, I thought we'd be in for a 770-810 range for a while but we slammed through that on btc-e and hit 751.

charting this is folly, more transparency is needed first in this fog of war

[MAbtc]

In any case, until we actually close under the 6h EMA30, I'm not even going to get active. Not a single downtrend came into motion without that happening first in the last 2 months or so. Until then, I'll sit tight (note however that I aim to trade only the medium/large swings, and let most smaller ones slide)

[arepo]

Charts on bitcoin exchanges is fun and I got roped into them for a while but all these hours would be best spent finding out the inflows/outflows of BTC & fiat per exchange on an hourly basis.

i hear what you mean. i find a lot of the trappings of the trader universe like emas, donchian channels, and marking a chart up with every possible fibonacci retracement to be a little distracting.

i work with a small set of classic indicators including the ones presented in the OP, as well as volume data, and fractal analysis, which is related to Elliot's wave model. fractal analysis attempts to find consistent patterns in the price function which can be used to better understand the "price environment". these patterns include triangle consolidation patterns, double-tops, cusp-tops, and bubble patterns (oscillation model). as for classic indicators, i find that the best indicators are the ones that incorporate volume heavily into the algorithm, because volume is one step closer to the inflow/outflow data you talk about.

and while i'm sure that these data would be a useful indicator in some sense (i'd expect it to look like a transformation of the mass index, peaking at times of of market uncertainty and reversals, correlating with peak in- and outflow), i think actual trade volume is far more important. i have often said that the only two important sets of data are the price function and the volume. i treat these data alone with a scientific approach and strive towards the simplest models that are effective at anticipating price behavior.

that being said, i have found empirically that they have "yielded returns better than chance during the time period which i have employed them". the problem of induction, of course, forces me to consider that this may simply be due to chance so i'm not claiming any superpowers here regarding predicting what is an inherently stochastic function, the price function.

--arepo

[DPoS]

I agree the volume is all we really have and good to know you use that as main weight,  I'll go back and read up your earlier work

I did notice the ascending triangles forming that broke us out of that previous downtrend and led us into the 700s.  But these can be like constellations where we kinda see what we want to see most times

[arepo]

update!

calling the short-term bottom here -- we will likely not see prices below $859/$765 (gox/stamp) for the next 3 - 5 days*.

===

10-day hourly scale @ BITSTAMP


https://i.imgur.com/Tl3IZlp.png
price plot for reference

===

1) the amplitude of oscillations in the Chaikin Oscillator is correlated with price volatility. since peaking price volatility is a reversal signal, an increasing range in these data can indicate trend exhaustion.

2) we can look at the volume data as well, keeping in mind that peaking volume is also a reversal signal. the 1-day red candle that was Monday, 06 Jan 2014, UT, had the largest daily volume in the past 18 days.

--arepo

*timescale based on a predictive fractal model of the 10-day price

[arepo]

I agree the volume is all we really have and good to know you use that as main weight,  I'll go back and read up your earlier work

I did notice the ascending triangles forming that broke us out of that previous downtrend and led us into the 700s.  But these can be like constellations where we kinda see what we want to see most times

triangle consolidation patterns, or oscillation patterns, are actually extremely common on all scales. i'm not surprised you noticed a few amongst all this volatility. unfortunately, since these patterns exhibit upwards breakouts and downwards breakouts rather chaotically, simply spotting one doesn't tell you much about price direction. combined with other methods that do, however, spotting and measuring these shapes can help you anticipate the timing of a large price movement in either direction, which is obviously a useful trick for speculators

--arepo

[oda.krell]

In any case, until we actually close under the 6h EMA30, I'm not even going to get active. Not a single downtrend came into motion without that happening first in the last 2 months or so. Until then, I'll sit tight (note however that I aim to trade only the medium/large swings, and let most smaller ones slide)

Very good... You noticed that breakthrough as well But what to make of it, huh? We're already above again, with exactly one 6h candle in betweedn opening and closing below. By my count, that means there's a good chance we'll revisit this level again in the next days, so: low 900s very well possible.

But apart from that? I've said before, I consider the most likely end of the post-ATH decline/correction/bear market to be in late January/early February, but I also said I can be convinced otherwise if a clear reversal reveals itself. It's still a possibility in my opinion, depending on how we recover from yesterday's drop.

Don't know about you, but I'm not tempted to make a major adjustment to my position yet. Then again, as I said before, there are different trading styles... frequently, with smaller amounts vs. seldom, with larger amounts. I do the latter, almost exclusively. Waiting until I'm sure of a major swing, then put in one or two larger orders -- worked extremely well for me this December.

[kehtolo]

Lovin your work Arepo.. great thread. Posting here so it's bookmarked and i can keep an eye on it.

[MAbtc]

In any case, until we actually close under the 6h EMA30, I'm not even going to get active. Not a single downtrend came into motion without that happening first in the last 2 months or so. Until then, I'll sit tight (note however that I aim to trade only the medium/large swings, and let most smaller ones slide)

Very good... You noticed that breakthrough as well But what to make of it, huh? We're already above again, with exactly one 6h candle in betweedn opening and closing below. By my count, that means there's a good chance we'll revisit this level again in the next days, so: low 900s very well possible.

But apart from that? I've said before, I consider the most likely end of the post-ATH decline/correction/bear market to be in late January/early February, but I also said I can be convinced otherwise if a clear reversal reveals itself. It's still a possibility in my opinion, depending on how we recover from yesterday's drop.

Don't know about you, but I'm not tempted to make a major adjustment to my position yet. Then again, as I said before, there are different trading styles... frequently, with smaller amounts vs. seldom, with larger amounts. I do the latter, almost exclusively. Waiting until I'm sure of a major swing, then put in one or two larger orders -- worked extremely well for me this December.

My position was being steadily adjusted all day Sunday. I had seen enough signals not to wait for the trend to break. At the least, a minor correction was in order -- though I am feeling more bearish than that. I've played two bounces here, mostly for kicks, but my money (outside of cold storage) is generally in dollars while this consolidation plays out.

Was just curious what your take was since one of your signals appeared to have triggered.

[oda.krell]

[...]

My position was being steadily adjusted all day Sunday. I had seen enough signals not to wait for the trend to break. At the least, a minor correction was in order -- though I am feeling more bearish than that. I've played two bounces here, mostly for kicks, but my money (outside of cold storage) is generally in dollars while this consolidation plays out.

Was just curious what your take was since one of your signals appeared to have triggered.

So would you consider yourself a trader (aiming mainly for fiat profits) as opposed to a "trading investor"?

I'm just wondering because the thought had of course crossed my mind as well, to sit out the entire correction/consolidation phase in fiat, but to me it seems nearly impossible to do so without taking a hit to your total BTC holding.

I mean, say you would have optimally sold at ~1200. How long to wait til you're convinced the correction is over? 1000? 1100? Anything later than that, and your total BTC position is reduced. Which is okay if you're agnostic about BTC's long-term price target, but if you assume that in the long run BTC will worth much more, it all becomes a game of what, I think, Rampion called "land grab".

So I don't really feel comfortable sitting it out entirely, only during the most obvious and violent downward movements do I turn (more or less) full fiat.

[MAbtc]

[...]

My position was being steadily adjusted all day Sunday. I had seen enough signals not to wait for the trend to break. At the least, a minor correction was in order -- though I am feeling more bearish than that. I've played two bounces here, mostly for kicks, but my money (outside of cold storage) is generally in dollars while this consolidation plays out.

Was just curious what your take was since one of your signals appeared to have triggered.

So would you consider yourself a trader (aiming mainly for fiat profits) as opposed to a "trading investor"?

I'm just wondering because the thought had of course crossed my mind as well, to sit out the entire correction/consolidation phase in fiat, but to me it seems nearly impossible to do so without taking a hit to your total BTC holding.

I mean, say you would have optimally sold at ~1200. How long to wait til you're convinced the correction is over? 1000? 1100? Anything later than that, and your total BTC position is reduced. Which is okay if you're agnostic about BTC's long-term price target, but if you assume that in the long run BTC will worth much more, it all becomes a game of what, I think, Rampion called "land grab".

So I don't really feel comfortable sitting it out entirely, only during the most obvious and violent downward movements do I turn (more or less) full fiat.

I am not aiming at fiat profits -- not as an end goal, anyway. I am interested in fiat profits in a bear market only to accumulate coins.

I didn't mean to say sitting out the entire correction/consolidation phase -- I have been actively trading. I meant the consolidation I expect from the most recent top (995->765). If I weren't working, I'd probably trade more of the small swings -- otherwise I am comfortable in fiat right now. I've got some wiggle room from my last sells and don't expect a re-test of the recent highs in the short term.

I've always got cold storage. But it's currently only 25% or probably now closer to 20%.

[oda.krell]

[...]

My position was being steadily adjusted all day Sunday. I had seen enough signals not to wait for the trend to break. At the least, a minor correction was in order -- though I am feeling more bearish than that. I've played two bounces here, mostly for kicks, but my money (outside of cold storage) is generally in dollars while this consolidation plays out.

Was just curious what your take was since one of your signals appeared to have triggered.

So would you consider yourself a trader (aiming mainly for fiat profits) as opposed to a "trading investor"?

I'm just wondering because the thought had of course crossed my mind as well, to sit out the entire correction/consolidation phase in fiat, but to me it seems nearly impossible to do so without taking a hit to your total BTC holding.

I mean, say you would have optimally sold at ~1200. How long to wait til you're convinced the correction is over? 1000? 1100? Anything later than that, and your total BTC position is reduced. Which is okay if you're agnostic about BTC's long-term price target, but if you assume that in the long run BTC will worth much more, it all becomes a game of what, I think, Rampion called "land grab".

So I don't really feel comfortable sitting it out entirely, only during the most obvious and violent downward movements do I turn (more or less) full fiat.

I am not aiming at fiat profits -- not as an end goal, anyway. I am interested in fiat profits in a bear market only to accumulate coins.

I didn't mean to say sitting out the entire correction/consolidation phase -- I have been actively trading. I meant the consolidation I expect from the most recent top (995->765). If I weren't working, I'd probably trade more of the small swings -- otherwise I am comfortable in fiat right now. I've got some wiggle room from my last sells and don't expect a re-test of the recent highs in the short term.

I've always got cold storage. But it's currently only 25% or probably now closer to 20%.

I see. Guess we have pretty similar trading strategies and goals then.