as we approach the official news release of the Silk Road auction price has moved into an interesting location. As was mentioned previously, the move through $610 over the weekend has registered a wide off the 38.2% Fib level off the higher time frame charts. This bodes well for BTC over the longer term, however, when we drill down to lower time frames the picture isn't as rosy.
Indeed, the rally since last Friday has been a little suspicious to me considering we have moved more than 15% on little to no actual news. Over the course of the rally momentum readings have gone from oversold back into an overbought condition. We have completed a rather well defined 'bat' price pattern. And is clearly showing signs of fatigue. Put it all together and I for one shall have to temper my enthusiasm for the time being.
I am reminded of the market cliche, 'buy on the rumor, sell the news'. Should the actual auction price be less then current market prices we may see a quick move back to those levels. For those lower time frame participants, this sets up an interesting trade possibility. As outlined on the chart above, shorting against previous highs (and risking to new highs) sets up an interesting reward / risk profile and something serious to consider. Like our most recent OTE long trade (which was buying against previous lows and looking for a test of the most recent highs) this 'range' strategy setup has a greater then 2:1 r/r profile.
There are of course is no guarantees and this is just another setup, but it does pose an interesting trade idea and frankly, if I had the PAMM service up at this point I think I might take the risk. Considering too our last three valid setups were all winners (taking almost no heat along the way) I would be more than happy to make this trade number 4 of the set and live with the result.
Cheers all and hope you can you this information to your benefit.
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p.s. often the hardest trade to take is the right one, and selling against these highs feels like a hard trade to take atm...
I am now happy with my profit on 535 and watching market with pack of popcorn :)