Hi Riders! We are at a very important moment in the markets, as all assets are now touching the Divider Band.
The SPX is right on the band, the NASDAQ bounced off the band last week, Bitcoin has finally corrected slightly and has just come very close to the band, and Altcoins have also just touched the band.
This leaves us with two very clear scenarios: a bounce from the band or a pronounced price drop if support is lost, on eitther case we will know the outcome very soon, patience.
Do not get bearish right at support, i've mentioned multiple times on past newsletters that when assets are right at the band is a good risk/reward zone for longs, we already had multiple bounces on lower timeframes on stocks and now that crypto had reached band gotta look for potential entries as well and quick take profits until we get a mid - long term confirmation of the trend direction (bounce or further correction)
In this edition, we'll focus on what signals to look for to see which of the two scenarios is confirmed. Also will share an update on Bitcoin, which has reached a green zone on the 4h and 1D timeframe.
4 in 1 Weekly Chart: All assets still testing Band as support:
Maximum price confluence, all testing the divider band
Bounce Scenario: All eyes are on the SPX, as the rest of the markets are waiting to see if a strong rebound occurs to follow it. Some markets may rebound more strongly than others, but all will be keeping an eye on the SPX.
Therefore, it's important to pay attention to the following signals to anticipate and confirm the rebound:
On the Short term: Green "M" on the 1D candle and price STILL inside or above Divider Band. (yellow band on the chart above)
For Mid term confirmation: Green "M" on the 1W chart and price STILL inside or above Divider Band.
For Long Term Confirmation: 2 Weekly candle closes above Trend Resistance at 4173 USD, it recently was rejected from there so if it closes above it will be a new higher high.
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----------------------- Bearish Scenario.
Also we will follow SPX, in this caseit is very simple:
Mid Term Bearish confirmation: 2 Weekly candle closes below Divider Band
Long Term Bearish Confirmation: Close below 3722USD. (below green buy zone and diagonal support line. Also it would be another lower low on the weekly chart.
Meanwhile for Bitcoin
Bitcoin has broken daily support, which is a cause for concern. However, when we look at the context, it has just entered a green zone and is still above the divider band (which has its lower limit at 19,700).
That's why I believe it still has good chances of bouncing in the short term, as long as it stays within the green zone. To confirm this, I prefer not to jump the gun and wait for at least a green "M" or green dot on our oscillator.
On the 4-hour chart, the situation looks very similar. There, I'm evaluating long positions and looking for signals of a probable bounce in the green zone while securing profits
If price do enter the yellow divider band, then it is very likely for price to drop fast to the 19700 area and if that fails it will enter short territory, aiming for the next buying area around 16-17k range.
For Alts: Alts are High risk right now , as long as we dont confirmation that stocks and bitcoin bounce from divider band. Do not get FOMO to buy into alts just yet, if we do get a bounce from divider bad on stocks, alts will most probably skyrocket, giving us plenty of time to find lagging coins.
4h trades or less are fine if you are already experienced with indicators, if now, just trade bitcoin, spx or nasdaq for now.
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