** To be clear this is a Technical Analysis for those that are still not straight on the difference between TA' ( Technical Analysis ) and FA' ( fundamental analysis ).
Elliott Wave is not as cut and dry as many people think. Give a chart to three different analysts they will likely give you similar overall pictures, but in the short term it becomes hazy to say the least. Other than the trend and market sentiment, Elliott Wave is used to gain an overall aspect on what phase of the market we are in and Fibonacci provides a guide for levels of interest.
This morning we hit a critical level in my opinion. Now to be fair I did not believe we completed wave III' in the longer term cycle, but I yet I never remove it from the possibilities. It is all about probabilities which is why I personally add in positions seldom going all in, and never all in during a correction. The other side of the coin is that markets reverse faster than we often can adjust and we end up chasing reversals which leads to portfolio erosion. So trying to sell your core long term holdings is foolish in my opinion. Being out of theS&P -1.44% during the best 25 days over a 40 year span reduces your returns by half. Sure you could say well if your out the 25 worst days you gains almost double. The trick is 70% of the best days are within one week of the worst days, so good luck.
Now to be clear we can still go lower, However, at this point we have pulled back near to the 7582 level (0.618 level of the bull run that started in 2015) which in my opinion completes the IV' wave and sets us up for the final wave. I want to again emphasize again that we can go lower and a if we break and close below 7582 lower levels as low as 3000-4600 come into play. I just do not see it but again I did not see breaking 9000 either so nothing is off the table. With that said 9000 saw buyers come into the market and I believe it is short lived. So in my personal opinion its just best to buy dips! If you never sold an equity thinking it would go lower, yet it turned and went higher, leaving you buying higher than you sold, you have not been trading very long and you will learn your lesson eventually. I know there are many paper traders that do this consistently but I have yet to meet a real one that wasn't a liar.
Bitcoin' more often then not rallies over the weekend. So as I enter another partial position here I look for the 15000 ( 0.618 retracement of the correction) to 17300 levels for my initial target. As we sold into strength we are now buying into weakness.
Bottom Line: This is still a bull market and corrections happen. Trading corrections is risky, so I look to position myself when the bull market resumes with smaller longer term positional trades. Bull markets always resume unless you think that cryptos are dead. Tom Lee from Fundstrat, one of the few wall street analysts that cover crypto currencies, said in an interview that buying bitcoin' at 9000 presented the biggest buying opportunity of 2018. He also was very bullish on smart coins which we have been mentioning for a while. If you think your smarter than Tom, CNBC is interviewing, and I guarantee you Fundstrat has more resources then we will ever have
