Ryans' log

[RyNinDaCleM]

Since this sub-forum is lacking substance these last few weeks in the new threads dept., I decided to start this thread as a log of Elliott wave counts, as they progress, and reject as they are invalidated. I will only post charts of counts, including possible outcomes and targets should the count mentioned come to fruition. Targets will be found using only Fibonacci relationships to price action.

Note:This is NOT a prediction thread. I do not give advice on trading.


In most cases, for fairness sake, I will post at least one Bullish count and one Bearish count using the same period of time. These counts will be equally plausible, and equally valid, but not necessarily equally likely.  I will try to post updates Daily at a minimum, and more frequently during active times. Sometimes, I will put multiple counts on the same chart. In these instances, I will color code the counts so that it's easy to identify what is what. I will at times, use an indicator or two on my charts (to be announced later) which I will go into detail on how they can be used to help determine where we are in a count.

This thread can be used as a sort of learning tool for those who would like to learn Elliott Wave Theory. Ask me questions or post your own counts if you'd like, but please keep off-topic chat out as I will remove useless material as I see fit.

Elliott Wave Theory (I will use "EW" from here on out) should not be used as a trading system by itself for reasons I will explain throughout this thread. Always, and I mean ALWAYS use other indicators/methods together with EW to get a solid read of the market. FYI, I have about 100 charts for Bitcoin. Everything from 5 minute to weekly. Then I have Bearish and Bullish counts. I have probably 40 charts with different various indicators, some custom and some with default settings. So don't be afraid to have charts

Some basic psychology behind the waves can be found here https://bitcointalk.org/index.php?topic=672187.msg8767634#msg8767634 EW is based on this psychology and the effects it has on you, the trader. Bitcoin is no different than any other financial market in the world in that the gain and loss of wealth whether it be Fiat or BTC affects the emotions of traders new and seasoned alike. EW is a glimps into the collective market psychology.

Divergences talked about in this thread such as Bullish divergence and Bearish divergence, and how to effectively use them can be found here: https://bitcointalk.org/index.php?topic=672187.msg8960947#msg8960947

To start off, I will stir the pot a little with this Bearish one


Or this one

This one remains valid until 683.26 is PASSED.

...and for those that don't know what smoothie is talking about with that inverse Head and Shoulders (H&S)  


This is the legend for the degree labelings I use. They are top to bottom, larger to smaller. However, I tend to only use 3-4 degrees in any given chart and those are usually Upper case Roman numerals, digits, and lower case Roman numerals. Sometimes I have a need to use more and I will add parenthesis.
Upper case is greater than digits. Digits are greater than lower case. Brackets are greater than parenthesis. Parenthesis are grater than non-enclosed labels. The character takes precedence over enclosure type.

[windjc]

Awesome. Thanks.

Why is the first chart bearish? I assume it crashes after 920ish?  

Nevermind. I figured it out.

[bitebits]

...and for those that don't know what smoothie is talking about with that inverse Head and Shoulders (H&S)  

First: thanks great post! Second: so your left shoulder actually is the right shoulder, right?  

[RyNinDaCleM]

...and for those that don't know what smoothie is talking about with that inverse Head and Shoulders (H&S)  

First: thanks great post! Second: so your left shoulder actually is the right shoulder, right?  

It's on the left side, right?
http://thepatternsite.com/hsb.html

[ThomasCrowne]

Inverse head and shoulders!  Gotta say, I love all your guys's techno-analysis speak.  It really kind of does resemble a set of shoulders with a head when I flip my monitor upside down

So, from what I'm reading on investopeida makes me bullish for bitcoin!

Can't wait to see where bitcoin goes by the end of the year.

[RyNinDaCleM]

Inverse head and shoulders!  Gotta say, I love all your guys's techno-analysis speak.  It really kind of does resemble a set of shoulders with a head when I flip my monitor upside down

So, from what I'm reading on investopeida makes me bullish for bitcoin!

Can't wait to see where bitcoin goes by the end of the year.

The two arguments against the inverse H&S is 1) that it's not very symmetrical. It *should* be, but it's not required. And 2) the neckline should slope up, not down. These are of course the ideal scenarios and more of a guide line rather than a rule. The slope however, makes for a more reliable outcome and more reliable target.

[RyNinDaCleM]

Today's installment:
Now that you have the bigger picture (shown above) of what may lie ahead, today I will present a couple of charts of the recent price action we've seen. With glaring divergences on the hourly charts, a minor top is decidedly in.The weak 5th wave was yet another indication of a topping situation.



Note these divergences and where they appear relative to the waves


Higher highs in price, coupled with lower highs in the indicator (in this case, the Elliott Wave Oscillator, or EWO) is exactly the type of divergences you want to look for. The bar period used is dictated by the degree of wave you are trying to identify. For a low degree wave such as this, you use 1 hour bars. When looking for a major top like the $1163 top on Stamp, you would want to use something longer such as a Daily bar. This rule applies to any indicator that finds divergence in price to strength comparisons.

Another is the MACD (2nd region) or RSI (3rd region).


I will add more to this in a few!

[RyNinDaCleM]

So far, we have a clear 5 wave decline off the top. This makes for an easy, relatively predictable series of events to come. A 5 wave move from a price extreme nearly guarantees that there is at least one more move down still to come. But not before a small countering move to retrace part of that 5 waver.

Fibonacci is a great tool. It is found everywhere, including financial markets.
The retracement tool gives you an idea as to where to expect a pullback to after a move occurs. Since we have our 5 wave "a" off the top, we can get our target for the b-wave. Since a b-wave usually retraces by 50-61.8% of the a-wave (it can retrace further or shorter but those are the most likely points), we now have a good idea where the b will end. In cases like the $1163 top, the b-wave is a good chance to exit your position if you were caught long when you realized the price had tumbled. In smaller moves, it's best to just hold tight and wait out the whole correction.



We can go further into projecting a target for the c-wave and the completion of the correction, but it gets less accurate the more waves you try to estimate. For the purpose risk:reward ratio calculation, it sometimes is a good idea to do this just to get a ballpark idea of where you could buy back. The c-wave is measured from the end of the b-wave.

Using a retrace of 50% as our b-wave target, we get this


The c-wave target is a good place to buy back or buy more if there is still room to go up. If you are looking for your entry point this is it!

Another way to find this target is by checking the Fibo retracement of the impulse preceeding the correction.



As you can see, it falls in around the same price point.

Don't worry! I will not be doing this much typing in every single post, I just wanted to explain what I'm doing and how I arrived at these targets.

[Bitcopia]

Thanks for the thoughtful and useful analysis! So if I'm reading this right, you're charts are predicting a bottom of about $627? Any thoughts on long term price and what happens when we start approaching $1100?

[RyNinDaCleM]

Thanks for the thoughtful and useful analysis! So if I'm reading this right, you're charts are predicting a bottom of about $627? Any thoughts on long term price and what happens when we start approaching $1100?

This is not a prediction thread
I give targets to look out for

Long term, there are a lot of factors that go into such a target. So many that I don't like to speculate what an eventual top to top all tops may be. I will say that a 1% of paypal to as much as 1% of global commerce is a very realistic target, but I don't like to go deeper than that.

As we approach the current ATH, it is a very critical time, imo. If we meet too high of resistance, there is a good chance that many will snap and sell, effectively extending the believed to be behind us, bear market. This type of failure would produce a cascading sell-off back to the $339 area and possibly below before heading up in our next Bull market.

[CEG5952]

As we approach the current ATH, it is a very critical time, imo. If we meet too high of resistance, there is a good chance that many will snap and sell, effectively extending the believed to be behind us, bear market. This type of failure would produce a cascading sell-off back to the $339 area and possibly below before heading up in our next Bull market.

I completely agree. I think this run is make-it-or-break-it time. If we fail to break the $1k level, I think there is a high possibility we will be retesting the $340 low when this bull run turns south.

[segeln]

Don't worry! I will not be doing this much typing in every single post, I just wanted to explain what I'm doing and how I arrived at these targets.

I am not worried.Thank you very much for your EW-Explanation,one of the best I read so far here at bitcointalk.og

[oda.krell]

Great thread, RyNinDaCleM.

I continue to be rather skeptical of EW theory, but admit that this could be largely due to my own lack of working knowledge of it.

Okay, for some actual input: I half expect another re-test of the daily SMA200 in the coming weeks. Currently at $611, but it'll continue to be declining for another month or so because of the inherent lag, which means the further that re-test lies in the future, the more drastic it might be (possibly going to high 500s again).

On the other hand, because of a (so far) rather reliable pattern of local peaks, I think it's likely we will see an intermediate high in late July, above the previous $683 top. I'm wondering now if there's enough time (3 to 4 weeks left) to go through both: a drop to (sub?) $600, and breaking $700.

[RyNinDaCleM]

Thanks for the kind words, everyone!

oda, As long as the market doesn't lollygag around, there is plenty of time to achieve both in the next few weeks. The $627 fibo target could be considered that retest of the D200. Bitcoin loves to overshoot a typical target, so it can get below my target. Or if the support is there, then it may not touch it. If I were to go into projecting the next higher high, we should be seeing 670-685 for the top of this impulse (larger degree than what I laid out last night) in the coming days. We will be banging our heads on this resistance for a bit in a consolidation before ultimately breaking it to see short term highs in the low to mid $700's. in the following weeks.

After work, I will report back to see how my counts are holding up. So far, Stamp is following nicely with a b-wave high at $649.08. We'll see what happens!

[RyNinDaCleM]

Since the b retraced nearly 100% of a, it is very likely that we are in the midst of a flat abc. This means that the target has shifted up by about $10 to $637.xx.
These are the type of unexpected issues you run into with EW, and why you don't want to use EW solely. You won't always have the count on the first try, so you therefore will be revising your counts as new data is available.

[RyNinDaCleM]

Yet another option!
Bitcoin also loves triangles. You guys are far too indecisive

Triangle are continuation patterns. The direction the triangle is entered, is the direction the triangle breaks. As labeled in fig.1, the triangle will break up. However, if the triangle breaks down, then the count would be as fig.2

fig.1



fig.2


Again, these are possible variations for the correction. The correction could be finished as my last post shows. Confirmation of the flat abc comes with a rise above $558.9 before the triangle shown here completes.

[RyNinDaCleM]

Triangle: Invalidated
Flat: Invalidated
Zig-Zag: Still valid (From post #7&8 )

A break below $604.21 invalidates the Bull count from post #7&8


More to come...

[RyNinDaCleM]

I guess I should have just kept my original target of $627.xx. oda got his retest and we've since recovered a bit. But I'm not totally convinced the market wants to continue higher at this point. There is a definite lack of conviction thus far.

As I said in the OP, to keep things fair, I will be posting bearish counts as well (Sorry Bulls, it's just a fact of markets). Since there are no new developments in price action as of yet, I will use this opportunity to do so. This count builds on the second chart from the OP. The time aspect is not adhered to, so don't expect new lows by September.  It likely won't, but since there isn't enough room on the charts unused space, I just drew it in. I used Fibo to find all these points. If we make lower lows now (especially below $604.21), it makes this an even more plausible future outlook.



A fifth wave down (to complete 1 of III) would be heading toward the red box in the $596-612 range, where we should see a nice bounce "back to normal" ~$640. To find the wave-III target, I used Fibo and multiplied the wave-I gross price movement by 1.618 which puts us to about a $428-450 range. I won't go deeper than this until something happens, but it could get ugly if we fail to break $685 soon. "Soon" is a relative term. It doesn't mean today or even this week, but we definitely won't have 6 more months of sideways between $604.21 and $685. It just won't happen.

This is a close-up shot of that 1 of III

[RyNinDaCleM]

Seems the 1 is now complete, falling about $0.50 short of my target. Both 1 hour and 4 hour charts have divergence for that last wave down. Now we will identify the next target to expect.

First, here is the updated view of my last chart posted complete with the divergence drawn in light blue


This is the Fibo retracement of that 1 to get our target.


The typical retracement of a wave-1 is between 50-61.8%. Again, this is just textbook levels and it can fall short or go beyond. Look for $635-$645 as the wave-2 high.

I am getting another post ready to show two conflicting counts that the count shown here works for. One has us going much lower if $604.21 is broken, the other keeps the bull alive and fighting even with a break of that semi-critical level. Stay tuned!

[RyNinDaCleM]

This is the Bullish alternative to the first chart from my post, yesterday (Post #17).
With a breach of $604.21 this is the last stand to keep the Bull alive. Nested 1/2's aka an extended 3rd wave. This count has us retesting the lower end of the $500's before heading much much higher mid to long term. The count and target in my previous post still works for this count as well as the Bearish alternative from post 17. We will need some further confirmation to determine which count will last.

This is the close-up of the whole correction since $683.xx. Note that I did not apply any Fibo to find the bottom of (2) yet. I want some confirmation before I dig deeper here.


This is the expanded view to show the nested 1/2's of the Bullish alternative


This is the expanded view of the Bearish alternative. This is in play because the recent low of $538.38 invalidated the wave-III leaving only the nested 1/2's option for a Bullish continuation. Since that low fell below the top of I from the Bullish alternative count (above) this count has been moved up on the "likeliness scale" by a few clicks. This is the doom and gloom count that has us revisiting the low $300's again, eventually.


What invalidates these counts?
A move above $683.26 before a breach of $604.21 invalidates this particular Bearish alternative (I have others that are a long way from confirmed such as the first chart from the OP).
This particular Bullish alternative count is invalidated with a move below the $420.27 low from May.

'till next time, Happy trading!