BTCUSD: Range Lows Offer Potential Buying Opportunities.

BTCUSD update: Price retests the 13786 to 12853 support zone after failing to push through projected resistance. This is a trading market.

I have written about this since the overdone rally in December: unrealistic markets reinforce bad habits and warped expectations and the results are very apparent if you read some of the negative feedback that I have been getting on various forums. The kind of price action we are seeing at the moment is more in line with how markets generally trade, especially after the dramatic rally this market has seen recently.

The 16350 to 17867 resistance zone is the .618 of the recent bearish structure and I have been writing about its significance for weeks. If you actually read my recent BTC report, I explained how a break of the 16100 level confirms BEARISH momentum. On top of that I have been reiterating locking profits at the highs. If you find yourself unable to comprehend these simple concepts, then you should read more popular reports that tell you exactly what you want to hear.

At the moment, this market is in the midst of support levels while momentum is still bearish. It is also literally in the middle of a broader consolidation defined by the 17200 and 11600 areas. The middle of a range bound market is the probably the worst place to establish a NEW position because price action is the MOST RANDOM. Randomness is what a trading plan aims to minimize.

Since momentum within this range is still bearish, I am anticipating price to retest the low 14Ks (which is a minor .618 support) or possibly a push back toward the 12853 level which is the lower boundary of the .618 support zone that is relevant to the recent bullish structure.

Within these support areas, I am looking for bullish reversals. That means IF a retest and price rejection occurs it will be establishing a higher low or failed low reversal structure. For ME this scenario is what I look for when I am interested in swing trade longs. KEEP IN MIND I do NOT KNOW if these reversal patterns will occur, it is a matter of IF the market chooses that scenario. If the market conforms, then I will be looking to buy into the bullish reversal. If instead the market falls through, then I do nothing.

As far as shorts, for those who have been reading what I write know that I do not short these markets. I will look for those opportunities in the futures once the spreads become more practical for the type of strategy I employ. At the moment I am still carrying a position trade long that I intend to hold with no stop or target. (Read my reports from 10 days ago).

In summary, the whole idea behind projecting support and resistance levels is to have a way to not only anticipate reasonable levels for the market to retest in the near future, but also to have a predefined plan that will govern your decision making process when such levels are reached. The price areas in the low 14Ks and within the 13786 to 12879 area offer reasonable levels to anticipate bullish reversals. This type of price action is in line with buying at range lows but also buying into a much broader higher low that many participants seem to be unaware of. Patterns on charts helps us build a decision making process since they repeat, BUT you also have to look beyond the patterns and consider them in light of the market CONTEXT. If you cannot see beyond the chart, you are much more likely to react along with the herd rather than anticipate it.

Comments and questions welcome.