We have the pieces in place I require to make a less risky entry into the market.
The custom fear and greed index, the Smurf Sentiment Index is showing extreme retail fear.
We have a cyclical low in prices.
We have a bullish divergence trigger with targets plotted in green and downside stop in fuchsia with the RSI broken above the top band and the midline.
Now… all that being said. We STILL have yet to break through horizontal resistance. I don’t care what anyone says about trendlines, horizontal resistance is more important than angular. Until we break that structure we are still in a downtrend.
What do I do with this information?
In my long-term positions that have time horizons beyond my 3-8 months trades, I buy. I don’t care that we are still in a downtrend. The market has shown in the technicals that it has formed a local bottom in this timeframe.
In my medium-term 3-8 month trading positions, I buy a little bit just for exposure in case the price runs away. Then I add to the positions on retracement of 30-50% from a bullish rally until my position size is the volume I desire. I never buy all my volume for a position at once.
In my short-term trading positions, I wait until the trend has turned bullish to resume long-biased trades.
Caveats:
The combined weekly and daily cycle forecast still shows a downtrend until around the end of February to mid-March. Weekly and monthly bearish divergence targets have not been met. It is entirely possible that prices will return to this level before we breach new all-time highs and/or later this year. Also, the bullish divergence has not appeared on all the oscillators. Ideally, there will be one more shakeout wick touching below 34k to setup up that money signal 6 oscillator bullish divergence on the Smurf Correction Strength Meter. If this current rally fell below the local low I woulnd’t be adding to my medium-term “exposure” positions until a second bullish signal appeared. I want to add to positions in pullbacks from the underlying trend, and technically the trend is still down.
Help me out again on Twitter. I really hope I can get some big eyes on this cycle theory. Thanks.
I’ll post the video on oscillators tomorrow. Turns out I saved my excel file in the wrong format and lost all my charts… I’m a noob.
Have a great weekend!
@theprivacysmurf
If you’re a noob…sheesh, what does that make me! 🤣
This was excellent. I love the timeframe suggestions. Just knowing what direction the current is flowing is so helpful in establishing positions.