How To Read Chart

pela78

Junior member
31 2
NASDAQ Stock Index Wide Picture Overview

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I use daily TF, data from CME, futures market.


I did divide the chart into components - waves. Let's analyze every component and combine them into the opinion.


A) Upwave 10/March-2/May. This upwave formed a busy trading range (1) around 7375, and culminated on 7850 level (2). We can see a spike in profile (2), this is a distribution stage. I believe, news was good. And professional operators unload their holdings onto buying rush of FOMO public.


B). Downwave started on Monday 05/May. We got 4 red candles in a row, the first time for a long time. Volume did increase. Declining price amid falling price - is the typical bearish behavior. If Chart reader were able to detect the distribution range at the top of up-wave A, this decline did not make a surprise for them.


Note, price bounced up (3) from profile spike (1). But we can see ND sign (lack of buyers) at the top of bounce movement (15/May). As a coincidence, the supply did arrive on 16-19/May.


Downwave B Culminated in form of Panic volume spike and Fake penetration (SLKB) of the low of the up-wave A. Many investors had to turn bearish (enter shorts) because their systems detected the first lower low. But it turned into the Trap for them.


C) The general shape of up-wave C builds the vision of the letter "P". We have a lot of volume at the top of the wave. As you can see, profile spots the spike at 7950 level (4). How can we interpret it? Another range of Distribution? Oh yeah. Market penetrated the top of the up-wave A. Many investors had to turn bullish (enter longs) because their systems detected the higher high. But it turned into the Trap for them. 25-28/July were No-Demand days.


D) On 29/July, the new Supply-wave did start. It culminated (Intraday Panic Selling 05/Aug) at the level of horizontal spike (5). That downwave formed shape with profile spike 7475 (5). Later. this level was tested (6). And after SLKB Trap on 25/Aug (7) ...


E) ...a new up-wave was started by Demand Bar on 4/Sep (8). But as you can see, the character of the movement is not very speedy and easy.


So, what is the judgment?


We have HEAVY supply around 8k level. Despite the market is trading within the current up-trend wave, IMO, bulls have no enough power to overcome 8k Resistance soon.
 

pela78

Junior member
31 2
267695


Let's take a wide view on Bitcoin/USD market. I use 3D TF and average data from 5 Major exchanges.

Read the Chart:
1) No Supply under 9k

2) The surge of demand broke out 9k resistance.

So, we have 9k support after 1+2 actions.

3) Buying culmination above 12k. Check Google Trends. "Bitcoin price" was extra-popular on the 25-20/Jun days. This is a sign of FOMO Climax.

4) Bounce up from 9k Support. If the market were bullish, it should overcome the Jun/July highs. However, we got only a fake breakout of 12k level (5)

6) The second bounce up from 9k support. What the result? Price did not even reach 11k.

Well, the inability of market to rally after bounces from support line - is the bearish sign. The last 4 red bars have low volume. Why trading activity is low? If market has a lack of buyers (demand), then we should expect the breakdown of 9k line with an increase in volume (supply pressure). In this case (I believe in), the decline should develop down to 6k support.
 

pela78

Junior member
31 2
In the previous post I wrote:


we should expect the breakdown of 9k line with an increase in volume (supply pressure). In this case, the decline should develop down to 6k support.


So, the bearish journey toward 6k has begun. Actually, It has begun... much earlier.


Take a look at the big vertical picture: to know what I mean.

 

pela78

Junior member
31 2
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So, what the chart of Gold does tell us? (I use data from Oanda, futures market charts are quite same).

On the first view, the eye catches up-trend wave (blue lines). But let's take into consideration volume and its relation with price action.

1) On 13-15/August, we had a spike of volume (red vertical zone). I always stick to high spikes of volume in order to for the story from chart. I plot the red horizontal line at the high of those days - 1535. Since that time we had several attempts to overcome 1535 level.

2) The first attempt. Volume is massive, close on the low - not very optimistic. It is more bearish sign revealing the heavy supply above 1535 level.

3) Next attempt. Close on the highs, but we have only tiny penetration of the previous high #2. Low volume represents the lack of sellers.

4) Next day is big red down bar. There is an important thing - volume. It increases on down bar. You have no bar like this on the chart. 05/Sept was a day when Sellers did appear - they gained a big result actually. This is Bearish change of the character. Supply impulse was too powerful to push price toward the low line of the up-wave channel. On those levels, market has found a bullish party, but...

5) ...after 3 green up-days (20-24/Sept), we got wide down bar (yesterday). It fast erased the progress of previous up-bar and moreover - it formed another attempt to breakout above 1535 level.

So, price is approaching back down to support. The unwillingness of market to bounce from support line - a sign of weakness.

Taking into consideration mentioned above facts, we can build the following opinion. Definitely, 1535 is powerful resistance. It was started by the 13-15/August extra-high-volume days. So, current Range 1478-1535 could be interpreted as the Distribution Range. If price refuses to breakout on higher levels, it should be interested in breakdown.


BTW, Some analysts can find Head & Shoulder (SHS) pattern here. Let it be the confirmation of the Distribution opinion.
 

pela78

Junior member
31 2
267747


Setup for shorting

Every market is moving within neverending cycle: ...balanced -> unblanaced -> balanced -> unblanaced -> balanced -> unblanaced -> ...
Balanced markets cover 80% of time. Trending markets last 20%.


It is hard to understand, but many cycles are developing at the same time on different timeframes. Learn more in Peter Steidlmayer original materials.


The zones of balances can be detected on chart as they form the triangle shape. The zones of unbalance forms trending movements (pumps and dumps).


Here is a pair if the #BTC chart. On the top side - 30m bars, it shows the triangles of balances. The goal of a trader is to find low-risk opportunities. Where do they hide? Think from the point of view of market balances. From my point of view - the rational answer is:


  • sell at the top line (resistance) of the new balance after the previous balance was broken down
  • buy at the bottom line (support) of the new balance after the previous balance was broken up

On the bottom side - clusters tick chart. It shows the details and confirmation to open the trade. A lot of green clusters - minor buying culmination. Some sellers are knocking out amid triggering their SLs. Some buyers enter breakout longs. Soon, they both will find they made a mistake. This is your setup for shorting.
 

pela78

Junior member
31 2
OK, let's do update for BTCUSD. I use Bitfinex clusters, UTC time.

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First of all, what is the context? Price has been moving inside balancing triangle/wedge AB for several days. (Note, it entered the wedge after falling - this fact increases odds for a bearish escape from balancing wedge - this concept often discussed in classical TA).

Second fact - SLKT above 8300. I pointed attention on this Killing of SLs of sellers (and trap for bulls) in Tradunity Main Telegram Chat (see screenshot).

So, we had the more weakness on background - this is context. What we had next?

1) Supply wave
2) Supply wave culminated in for of Panic at the level of line B (bottom/support level of balancing wedge).

3) Yes, this is EVRB (small progress for bears)

4) NS (lowering of volume on the level where Panic+EVRB were detected)

5) With a minor sequence of Strength (Panic+EVRB+NS), Bulls tried to push market higher.

6) But their power exhausted quickly. This is No Demand (low volume attempt to go up caused by a lack of buyers). Note, ND appeared just at 50% half way back of decline from SLKT 8350 to Panic 7950

7) SB (I'd like to see higher volume) and confirmation of ND. Bearish Cha Cha. Chart tells you market changed its sentiment. Holding longs became very risky as buyers were not ready to push market above 28/09 SLKT.

What's next?

8) An attempt of bears to break down big AB wedge. Volume was extremely high.
9) This bar tells that bearish attempted was about to fail. Because a lot of activity of this bar was registered above the body of minor balance CD. This is bullish sign and chart tells that bar #8 is likely to be a Big Trap for bears with killing SLs under 26/Sept low.

So, as #BTCUSD is trading above 7900, I expect an attempt to break out line A.
 

pela78

Junior member
31 2
Here is a Setup for Shorting. It uses the oil market but works fine everywhere. As described below setup based on a cruel market nature.

I call it the Test_Of_RFSB. Here is a fresh example in the same market.

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The first chart is telling the global view (1 candle = 1500 ticks). You can see on chart #1:
1) the breaking down of line A.
2) consolidation zone after break-down of A
3) development of the Selling Wave with big bearish effort around 59.40. Plot RFSB here.

The idea behind the testing RFSB - is to knock out bears who joined the selling wave from good positions. Test means that -> the market makes back move up in order to trigger SLs of bears placed around the breakeven level. As you can see on the profile, we had a spike of activity at 59.40 level. So, point #4 - is the "test" of RFSB and knocking out sellers from a falling market.

Now, look at chart #2. This is footprint (1 candle = 144 ticks). We need to find the best moment to open a short position.

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1) Abnormal Buying during testing of RFSB on faster TF. Green Clusters = Many Existing Shorts are Stopping-Out. Market Fooled that Sellers. Thereby, it lost its interest to go further up.
2) That is why selling pressure appears (Pure Genuine Supply). Price starts to decline amid the red Delta = bearish behavior.

A period of transition from 1 to 2 = the rational moment to enter shorts with applying your personal Capital Management Rules.
 

pela78

Junior member
31 2
In the last overview about #BTC market (posted 2 days ago), I wrote:

So, as #BTCUSD is trading above 7900, I expect an attempt to break out line A.

Since that time, price increased from 7900 to 8200. Let's do update.


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1) After break-out of line A...
2) ...price did advance up to 8400. Study carefully the character of up-wave in point 2. It consists of 3 up-bars. Every next up-bar has bigger volume than the previous bar. And every next bar has smaller bullish progress in comparison with the previous up-bar. This is EVRT - big Effort Versus small Result. EVRT tells about Supply swamping Demand. Sellers activated above 8400.

3) This is SLKT - stop-loss killer at the Top. It: a) knocks out sellers who placed their SLs above the high of Point 2 and b) involves bulls in buying. This is pure manipulation. That is why you can see...

4) ... fast decline after SLKT pump bar. The chart tells, market is not interesting in holding above 8400 figure.

5) SLKB brings some bullish impulse to market. But it seems, buyers will not capable to develop a powerful pump and breakout 8400 resistance.


IMO, negative sentiments are growing again.

Any questions?
 

pela78

Junior member
31 2
Yesterday, I've posted messages in Telegram Chat about gold
I wrote:
market is not interested in moving higher. We have to expect some sort of decline.

Let's look at this market with a more detailed view and analyze how the situation has developed.

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I use ATAS software, a tick chart from Moscow exchange.

1) This is a pumping upmove from yesterday. I judged it as an SLKT and starting the shape of weakness formation. Note "P" shape. It means a lot of activity on the top (around 1524 level). This is a typical behavior for the weak market. You can describe it as EVRT (small Result for bulls Versus high Effort on the Top), or a wall of SELL-LIMIT orders met up-wave.
2) As a consequence of Supply Entered the market, price started to go down. This is the second stage of the Shape of Weakness formation.

After slow sideways movement on Friday, we got...

3) ..News Event spike during American Session. This is another up-movement in fake direction. This up-bar diversion: a) knocked out bears from good positions, and b) attract buyers in Trap
4) Decline with breakdown of support line

Believe or not - On Thursday, professionals & Insiders were aware of Friday news effect. That is why they managed to prepare themselves.


5) Actually, here is minor SLKB (triggering of SLs under the previous minor low added bullish impulse to market). However, I do not expect gold price will continue to rally above the Thursday tight range & high of today's event above 1520.
 

pela78

Junior member
31 2
Intraday Bullish Change in #BTCUSD market.

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Line A - is major line of support. It can be clearly visualized on TF like 1h-4h.
Now study the behavior of the Price/Volume on down-waves 1-2-3

1) Panic Volume + Wide Fearful Spread (attracting the public to sell)

2) Big Volume + Small result for bears (only SLKB actually).

3) No supply wave. Very little volume on the decline.

4) Demand Bar

5) Small NS bar

6) Another DB.



In sum, we got PANIC+SLKB+NS+DB+NS+DB. After first NS+DB holding shorts became risky as the market demonstrated exhausting of selling pressure on 1-2-3 waves. That gives an idea that the Support line will be unbroken (for a while).
 

pela78

Junior member
31 2
This is a post about Stop-Loss killer, it happens everywhere, not only on #oil.

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When public bulls look market goes up #1, they go long and place SL under the low of #A.
Then SL-killer comes in #B.


When public bulls look market goes up #2, they go long and place SL under the low of #B.
Then SL-killer comes in #C.


This is a cruel character in every market. Only a business.
Note a spike of volume on clusters. This is knocking out sellers.


If you really want to join the bullish team, cluster #3 could be a signal for you. Buying here has arguments:
1) cruel market lost interest in going lower because it has triggered many SLs of buyers already

2) M5 profiles show the growing POC - it confirms the interest to go higher.
 
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pela78

Junior member
31 2
#ACB #stock market is developing in the down-trend stage. However, the character of down-move 1 could be interpreted as the Panic selling wave. Now we have to get a confirmation from the Chart. The lines of downward trend channel should produce bearish movements 2 and 3. If the Cumulative volume on that down-waves will decrease in comparison with Panic wave Cumulative volume - then we will get more facts about the accumulation of cheap stocks around level 4.0$
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pela78

Junior member
31 2
Today I wrote in the Telegram Chat:
ZRX broke above previous major high. I believe in Correction. The progress of wave A was quickly nulled.
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Actually, as you see in hindsight, it was a clear manipulation:
  • #FOMO wave has extremely size of volume. Extremely high volume on up-bars = hidden weakness.
  • #SLKT above the #FOMO waves – additional Trap of smaller scale (intraday size)
So, the current trading range is developing in the format of the #distribution stage. That is why I do believe, #ZRX #cryptocurrency has negative sentiments
 

pela78

Junior member
31 2
Example of Judging the #Bitmex #XBTUSD Market Action using the Price and Buying/Selling Volume

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We Have 3 downwaves A-B-C. All downwaves were finished around 8475.

1) Study the Profile of Each wave - They have "b" Shape.
2) Study the Selling Volume - We have a lot of Spikes in red Delta and Red Clusters around 8475.


So, we got signs of hidden strength around 8475. It seems that Professionals Accumulated the falling flow of coins using Buy-Limits.


Study the wave D. Here where Strength turned Real. We have breakout above the resistance line.


So, Bulls are producing big efforts to push market up from 8475 level. If they fail, this level will act as resistance.


OK, this all great. But how you can trade this situation?


Turning delta from red to green (circled blue) around SFDB line - is a rational setup to join the bullish campaign.
 

pela78

Junior member
31 2
In my previous overview about #Gold, I wrote this maket did trading in the range of balance between 1500-1520 levels. As a result, we got the formation of a big "bell shape" in market profile (left side indicator).

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Yesterday, we got the first clue about future direction with the breaking of minor blue support line.
1) Selling of pressure to break down the minor blue support line


At the opening of today's session, chart confirmed the market's intention.
2) Trap for bulls at the opening of the session (I use data from Moscow exchange, futures section). Green clusters represent: a) buyers are entering Trap b) sellers are knocking out from good positions

3) Another portion of genuine Supply (Selling Pressure).


So, Buying Culmination + EVRT on 03/Oct revealed its power - the Market broke down 1500 level. It should act as resistance. Sentiments are negative. Next week should produce the development of decline. Breaking out above 1500 with the bullish style will invalidate the bearish course.
 

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