Wyckoff Take II: UTAD edition - ending with Arc of Dump Destiny

3 мая 2020 г.

My last chart mapped out the Wyckoff structures, but left out the UTAD: upthrust after distribution, assuming that the LPSY dumping was already in progress. As it so happens, the selling I prematurely thought was the end of the TR -- was in fact whales testing distribution, but followed by the UTAD (a driven move hitting stops and forcing a vertical move to $9200). The Up Thrust After Distribution is explained here:

"This is a test of the remaining demand. It is also a bull trap—it appears to signal the resumption of the uptrend but in reality is intended to “wrong-foot” uninformed break-out traders. A UT or UTAD allows large interests to mislead the public about the future trend direction and, subsequently, sell additional shares at elevated prices to such break-out traders and investors before the markdown begins. In addition, a UTAD may induce smaller traders in short positions to cover and surrender their shares to the larger interests who have engineered this move."

Ironically, in my previous charts, I actually projected this very rise to $9200 before heading back down to the low range. I even expected to TP at 9200, because the retrace fibs of the last drop were perfectly positioned there. But in my blindness to Wyckoff, I didn't realize I was forecasting the UTAD itself. I got bear goggles, spooked by the first dump, but thanks to sufficient margin, wasn't at risk of getting liquidated. So I will miss the $200 ride up and back down, but this development only confirms the original Wyckoff Top distribution scenario more surely. The resolution simply gets delayed a bit.

A few new things have caught my attention since rushing out the last chart. This new correction pitchfork, a favorite of mine when charting bear seasons after a bubble peak -- actually fits this price action perfectly, to the very point of our $9200 UTAD peak smack on the intersection with the rising channel top! Also, I reframed my white rising channel to better fit the controlled edge touches (not the selloff overshoot). And a new alignment appears with the CME futures opening at 5pm Sunday evening CST --- the futures closed at $8840, and I believe spot price is going to drift right down to meet it. First - because our bearish Gartley is supposed to resolve down. Second, because the UTAD is a temporary high structure in Wyckoff, and resolves back down to the Trading Range. Those should all converge at about the right time and price expected.

Now the resolution: lots of bull hopes are inflated by this recent pump to 9500, and they're strongly expecting a breakout to 10K and beyond. If this whole sideways range **does not dump at the LPSY areas** but instead just keeps climbing, then the whales really are taking us to the moon before halving, damn the distribution.

If we have a proper LPSY and SOW selloff -- but the drop stops at 8520, refusing to breakdown the rising bull trendline floor we've been riding above for weeks, then the Wyckoff was valid, distribution whales get to take their profits, but bull sentiment is just too damn strong to stop the market from continuing to go up on the sideways.

If we break down the intersection of the pitchfork median AND the rising bull floor, then it's dumpsville. All the way to TP2 and TP3, bottom of the bear fork but no lower than $8000 probably. Any rebound from such a dive will be weak, because we will have retraced to the 0.845 fib, almost the entire pump rally!

Decision Point - $8840
TP1 - $8520
TP2 - $8260
TP3 - $8020

3 мая 2020 г.

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Dumps arrived within minutes, UTAD played out as expected, right back in trading range. very forceful move, same volume as the pump that got us up to 9200. Full retrace. We could either settle down towards 8840 or if bears are bold, drive this right down to the intersection of channel bottom and correction fork at 8810

3 мая 2020 г.

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Phase C complete, settling into trading range, Phase D next

3 мая 2020 г.

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while my target of most concern is our arrival and departure from $8840 in 13 hours - there's a chance to catch some profit on the way. Bids set to catch any deeper dumps here, reshort on the rebound pink paths.

3 мая 2020 г.

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From a fundamentals perspective, if you know that this Monday should be bringing some bad news for stock markets (Buffet selling airlines, etc) -- then it would make sense to be done with this whole pump & dump Wyckoff system, having unloaded your pumped coins by... Monday 😉

And it just so happens that all the wyckoff structures I've labeled, ending in the LPSY dumps, just happens to wrap up by..... early Monday morning.

How convenient, almost like somebody timed the start of the pump process to allow for a peak near 9500 and allow the market to go through the motions of this distribution before.... Monday

Could it be that *that* becomes the deciding factor? the "news" that everyone uses to justify choosing the bear path down, not the moon path? Will that determine where we go after 8840? 😉

3 мая 2020 г.

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Just noticed a periodicity with the few high-volume movments we've had (which I had already identified as whales pumping/dumping all at once. Just in case you were wondering if this action is "natural/organic" market movement -- does action every 6 hours sound natural? If i'm right, we could have a series of dump and pumps all the way down here to CME open, in perfect tempo every 6 hours

3 мая 2020 г.

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3 hours from CME futures open, and spot price has returned **exactly** to this level, as expected. Dumps have been carefully timed and drawn out to deliver us here. This is basically "painting candles" where you want them to go 😂

Now the question is, how will CME futures behave when they open? Do they see the recent dumping and recognize the distribution happening here?

We are at the bottom edge of the bull channel (white), and the top 1/4 of the correction channel. So bulls would be inclined to rise from here, thinking the rally continues -- but they'll be walking into the last of the bull traps, where LPSY kicks in and our whales unload in force, causing lower highs each time, and eventually creating the Sign of Weakness (SOW) where we fall out of the Trading Range (the dark rectangle). We are in Phase D of Wyckoff and as supports are broken and we fall further will be in Phase E very soon, there selloff gets steep and there is no retrace to relieve trapped longs.

I can't predict the timing of this transition - but it should happen within this circular area, no further up than the top of the blue correction channel. This is the time to ONLY go short, don't long even the small legs up, because the downward motion will be swift and severe.

3 мая 2020 г.

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Overview -- the moon path is doomed. Sell any rise we get from here to 9080. Expect the pumpwhales to be making fat million-dollar buys today pushing us slowly up to 9K. They've propped the price up without any trouble so far, won't be hard. it's even likely they'll create a small gap with spot price above CME futures last close price, precisely to encourage futures to follow!

4 мая 2020 г.

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CME opened, and we pretty quickly dumped to the bottom of the trading range thereafter. This set us up for an obvious SOW (sign of weakness) poking below trading range down to 8570, which just so happens to be near the median of this correction fork. So the optimistic yellow circle zone turned out to be too high for a final LPSY, any ABC correction we have, after dumping 5 waves from the UTAD, is going to run out of steam. Longs have been liquidated too many times, their stomach (and their wallets) have been hit too hard to sustain another rally.

In normal circumstances, after dropping out of a rising channel like we just did, I'd be fairly sure we would rise to kiss the underside of that channel floor -- but that would require reaching 8900 from here, and I find that too optimistic. Too many bears salivating at selling 9K one last time, which ensures it won't happen.

I have revised my dump path and targets, this will be more severe and straight down 5 impulse wave, I don't sense any hesitation in the bears or enough strong action from bulls to "pause" the selloff bounces for reconsideration on the way down. And we're already in the 8550 range of TP1, so there's only two left, $8200 and $7800 (right back at the
previous stiff ceiling before the pump)

4 мая 2020 г.

Заметка

and no - I really can't say where this correction wave will top out, impossible to know. Depends on timing and exhaustion. If you're short from 8900 already, you're not going to get a higher position, might as well just hold. If you get a second chance at 8888, take it.