This is a follow-up to yesterday’s post: Head & Shoulders Forming, Look For 20 Point Drop If Neckline Breached
Yesterday we saw a 90% completed head and shoulders pattern, indicating a reversal of the recent runup was imminent. The retesting around 145 indicated the market was looking to blow off a lot of overbought pressure. We warned against yet another retest, after which a drop would be expected if breached.
That retest ultimately occurred, as did the drop in the amount predicted, but took longer to materialize than if the pattern had been completed. Rather than finishing the head and shoulders, the market trended sideways for nearly a day before the eventual retest at 145. The bearish crossover of the EMAs and repeated prints below both indicated the retest was coming.
We’re seeing a number of developing indicators at the moment. On a longer term basis, a hammer candlestick is forming nicely on the H4, a sign of bullish reversal – though it has weakened even since we began writing this update. We would like to see a hammer printed at close followed by a green candlestick before being confident in the related bullish outlook. At the moment we’re still trading below the EMAs on a medium term basis (H1), indicating continued downward pressure. We’ll continue to watch these indicators and remain relatively neutral until either the longstanding support at 125 is broken (bearish) or we see a few prints above the EMAs (bullish).
It would be great if you included timestamps on your posts.
We’re working on some updates to better handle traffic and optimize for mobile. We’ll consider for this inclusion in the same roll-out. Thank you for the feedback. In the mean time you can check on Twitter – all of our articles are automatically tweeted when posted.
These posts are great. Keep it up.
i thought of your article yesterday as i watched it tumble. nice analysis. .
With this article you are revealing your gerenal attitude, and I am sorry to learn that. This one goes into the category “I told you so”. Here you’re celebrating your insights, but just hours prior to this article, namely in the comments to yesterday’s article, as the H&S pattern did not seem to materialize, you personally commented to that article as follows:
“This post was simply intended to make our readers aware of a developing pattern so they would have an idea of what to expect if it fully developed. Since the pattern was not completed, it should not be looked to as an indicator going forward from here.”
So if you’re right, you’re right – and if you wrongly revised your view (yesterday), you’re still right.
I’m telling you people: the emperor has no clothes.
Emperor? You’re too kind.
If you continue reading the conversation happening in the comments of that article, you’d also see my response to a clarification question in the same thread: “Generally consider it inconclusive. The resistances/supports and subsequent outcomes if broken may remain, but the confidence level isn’t quite the same.” We were looking to the H&S to retest 145 and the retest simply did not happen as part of the pattern.
That said, these posts are not about me. They’re to help our readers understand day trading and chart analysis. Everyone is welcome to take from them whatever they please.
Aww, did someone lose a bit of money?
This is the 3rd prediction that I have seen you guys make, and so far you are 3/3. Nice analysis.
Great analysis, thanks. I’m starting to look at TGB for updates before starting a trading period.
One thought – timestamps would be *really* helpful in determining exactly what timeframe the post is discussing, just due to the fast-moving nature of BTC trading.
Good job, once again. I was one of those commenting in the previous H&S post, questioning its validity. Turns out your price predictions pretty much came true, but the pattern didn’t form completely, so your predictions regarding the cause were somewhat off (or at least didn’t materialize). But that’s pretty much exactly what you say in this post, so you’re not at all, as the commenter above claims, “pretending to be right even when you’re wrong”.
Very professional website. By far the best source of Bitcoin news on the web.