Up or Down Ser? 008
After a mandatory bear market (and baby making) hiatus, we're sooo fucking back!
It’s been over a year since I’ve sat down and penned a market update, my excuses vary from bear market apathy, to taking time to enjoy life with my new wife and son. With apologies out of the way, let’s get down to business and see what the charts have to tell us.
The worst is behind us
Much like a bad Monday morning, the market has stumbled out of bed, mustered up the courage for a shower, and a hearty breakfast. Things aren’t looking that bad at all now, and the realisation that the we will in fact live to party another day is setting in.
On the weekly, we can see that the cloud has printed a bullish TK cross below the cloud (blue line crossing above red). As explained in my guide to trading the Ichimoku Cloud this isn’t a long trigger, but rather a short exit signal.
In the medium term, price has been rejected from the lower cloud span, and there’s a decent possibility that we witness a leg lower before retackling this resistance level. Should we close within the cloud, the price target for an edge to edge move would be $40-42K.
From a price action point of view, the chart has been printing a series of higher highs and higher lows, indicating a steady uptrend.
Reaching up
On the daily, we can see that price has broken above the cloud and is now finding support at the Tenkan (blue line). This is a relatively weak support level, with the Kijun (red line) providing plunge protection at 28K. The key point to interpret in the daily cloud is that it’s curving upwards, indicating strong upwards momentum over the mid to long term. That said, the lagging span (green line) is flat and close to crossing into price, which albeit not a signal in its self, indicates upcoming resistance.
Slideways
The 12H chart paints a story of sideways price action amid indecision. Everything is horizontal, indicating a lack of medium term momentum and indecision in the market. The lagging span has crossed below price, and there is a disequilibrium in the TK lines. A retest of $28K would be my entry should I not already have a position, with a close below that level indicating trend reversal.
Trade safe, and have a great weekend!
TCP