My Current Take - Market Analysis for Oct 14th, 2017

I'm going to give you my crypto market take right now without charts, but I plan to grind through the chart of each of our portfolio holdings this weekend. I have a lot of personal things I have to do as well, so it will be a slow process. 

Seems to me, and I think is obvious to everyone, that the market is behaving in three segments or sectors right now: Bitcoin, Other big caps, and small caps and tokens. 

Bitcoin

As we all know Bitcoin is working through a standard impulse, and one that is extending. When we have such a move, it provides the Elliotician a very accurate template to call the micro. Albeit we are in the 'fours and fives' which can be more tricky, we can still expect the support and resistance to behave as expected. So, I have reasonable confidence that I can guide us through. My only concern is at some point I get off by a micro degree. But that is managed by keeping an eye on support. What I hope I don't see are folks feeling FOMO and now sizing up in BTC. This run is very mature and it is far too easy to feel like you missed out. The fourth and fifth waves of a move are choppy and you will soon regret that decision. But if you are riding a core, enjoy it and take some profit along the way. And, add some of it back near support when we do come down. But you should be thinking about getting down to a long term hold, not pressing a swing position. Doing so would be late in the game.

Other Big Caps

For me personally, trades in big caps  like, but not exclusively XMR, DASH, XRP, ETH, LTC have been very reliable money makers, albeit obviously not as amazing as Bitcoin of late. We had some interesting discussion in the room this week on big caps versus alts. I'm going to repeat that the big caps that we play in the portfolio have enough price history to increase my confidence in my own calls. When I'm playing the micro on one of these, I'm playing against the backdrop of a daily Elliot Wave pattern that continues to hold. They are not big money makers but a steady income. The micro/hourly patterns have been a little challenging, but very workable. Currently, while bitcoin has been taking off and leaving the other big caps in the dust, I'm seeing some setups form in these, and this week we already took a few. So, if you haven't been on this train, you might pay attention this week. I expect more setups to come.....XMR, DASH, maybe XRP again are just a few that we may hit the gas on. 

Small Caps / Tokens

Are these not trouble makers? The reason this whole portfolio has been trouble is the lack of price history. When the service first started most of our current tokens were in the top of a third wave. But of course since it was the first third wave we've had, we didn't know whether it would fill out as a 5 wave move. For most of them, they proved to be the top of a C wave, not a true third, when most of the them blew wave 4 supports. I knew then, we were looking at large diagonals (AT BEST), and maybe some of these may prove to be corrective rallys into those thirds. 

But when are going to bottom? Many of these tokens are putting little rallys in and forming the technical divergence typical of fourth waves. Next comes the bottom. Some may have already bottomed. What is troubling to me, though, is that I don't yet see many impulses off the bottom except for the more aggressive trades I called. It is certainly too early to show a count off these bottoms except the stronger ones: PIVX, NXS, and OK. Until an impulse shows or a solid ABC over wave 4 resistance, it is dangerous to say the bottom is in, particularly when you have a diagonal count and you have nothing on a daily history to suggest what fib will hold it. 

Part of my trade plan goes like this: I don't catch knives except with lotto sizes. Inherently, if you read any trade books worth their weight, reversal trading is lower probability but higher reward. Successful reversal traders, then, naturally size down versus breakout traders and retrace traders (me). Anyone buying tokens in these lower levels because they look washed out are playing the roll of a reversal trader, and should be aware of what they are doing. If you have a daily count that is mature (One but preferably two years old) reversal trading gives you higher probability because you can find confluence between the corrective count on the way down and the daily count on the way up. This yields fib targets that are higher probability. We simply don't have that in MOST of these Post-ICO small cap coins. 

I know it is tough if you are not skilled in Elliott Wave, but I hope to at least throw out these tidbits and hope you'll take the time to use the webinars on the site. That's where I was two years ago, and here I am. 

Future Moons

Lastly, I want to develop on another conversation on the board that is buried. My biggest focus, but quietly is to figure which coins are going to behave like Ether and bitcoin in the coming years. Many on the site are trying to figure that out via analysis of the project, team, etc. While I respect that, it is not my method. I am watching each step in price action to see if we are developing the Elliott Wave pattern that should propel us into one of these counts.

As I have said, I first owned Ether at $4 and regret not holding a much larger core all the way. I didn't because I didn't believe what has happened could have. Yet the signs were all there, clear as day in the form of a beautiful impulse in wave 1 and a very corrective and shallow wave 2. Right now the cleanest impulses I see in smaller coins, that I recall are OMG, OK, ARDR, and XZC. RISE (in USD) may also fill it out. These clean impulses, I full expect will launch us into a moon count but not until we've had a wave 2 correction, perhaps into next year. Other tokens, for the most part are giving us diagonals. Diagonals can one day become 'moon counts' but not until they grind slightly up and sideways for some time. DASH and NEO are two 'moons' that started in a diagonal. And, as I said above, some of these diagonals may fail. We don't know.

So, while many are worried about whether tokens are going to bottom or not, I care much less about now as I do the future. I've been focusing on taking my big cap profits off and now and then moving some of it into tokens that I think may be well structured in price action. But not too much. I'll be watching every step to see how it develops, and take any off that stop playing well. But I'll remain very sized down until these coins are loaded on the REAL launchpad in the future. We have time to wait for that. 

I've learned from the mentors I've had and my own experience that a smooth equity curve is a huge value. It calms emotions, and steadily grows wealth. Calm emotions are essential for good decision making. This is why I so heavily weighted in big caps. I just know what they are up to. I may miss out on some big trades, but I assure you I will also miss out on some big drops. This has worked very well for me.