Weekly Market Outlook: Short Term Signals To Watch
The market’s still grinding, emotions are high, and everyone’s trying to figure out whether the worst is behind us—or if there’s still another leg lower. But instead of guessing, I’m sticking to what works: price, time, and structure.
In this update, I’m breaking down a few very specific things I’m watching right now that could tell us if and when a real shift is underway.
Nothing complicated. Just clear signals, rooted in sound market principles, that too many overlook when volatility takes center stage. These are the signs and levels I’m keying in on right now.
Overbalancing Price
Bull trends run up more in price than they run down and vice versa for bear trends its simple trend analysis.
However, there is a lot these price runs can tell us about a changing trend. When we get the first leg against a bear trend that runs up more than the previous run up we have an overbalance in price signaling that the bears are losing steam.
In this low time frame case that simply means we want BTC to run up more than the 12,249 points that the previous move ran. If it can do that, it’s the first signal to us, among many, that the trend is beginning to reverse.
The other key to this and the next level to watch above that would be a break above the previous high of 88,804. That would be a higher high and the signal to a changing market structure.
Overbalancing Time
Gann always said that an overbalance in time was the strongest indication of a change in trend.
The two and three day reversal rule is something you all are very familiar with by now but the simplicity of it and the effectiveness of this observation always amazes me yet so few ‘analysts’ recognize it.
Simply put, in a strong trending market we typically see reactions against the trend no more than two days.
This current downtrend is a textbook example of this. The trend to the downside has been strong because you will see that we have not had three green days in a row on BTC for over 100 days now.
Hard to believe, but if people understood time better they would see that it’s clear as day this has been a strong downtrend.
That said, that is the major piece to this puzzle we are missing and still waiting on. Continue to observe price until we get 3 days in a row as that will be a major signal given the fact that it’s been so long since its happened.
50% Levels
On the bigger time frame we had a run up of 168 days from the low. Today now marks half of that time range which is a significant point in time.
It’s not a do or die moment but it is worth observing that we are passing that threshold and would like to see the market gaining strength beyond it.
On a closer look at price below, we have crossed over the 50% level from the last daily high. So on a very short time frame that is a good sign if we can continue holding above that level around 81,500.
Downtrend
Sometimes keeping it simple is all you need. Below we can see that the downtrend from the January top has been broken through after 80 days. Another good short term signal that things may be shifting more bullish.
We have also reclaimed the 25% retracement level from that same high on this most recent move.
Wrapping Up
The market is still trying to confirm a bottom. I have given you a mix of key signals from overbalancing of time and price to subtle structural changes we are looking for on a low time frame. Usually we don’t focus so much on the day to day and short term levels but in this case the market just hasn’t quite gotten to where I want to see it yet.
We are still looking for 3 days green to overbalance time. The 86,670 level to overbalance price and 88,800 to make a higher high. These are the three conditions I want to see met before dancing on bears graves.
This leaves a lot to be said about alts and the broader market and I will get an update out on that this week assuming the low continues to hold.
There is no shortage of news this week between the start of equity earnings and whatever Trump decides to say on a day to day basis. So I expect emotions to remain elevated with more volatility in the short term.
Otherwise, just be patient here I do not believe this market is going to take off anytime soon and I’ll show you why this week. There will be another pull back its just a question of time and how low price goes. Regardless, I will continue to buy weakness on any dips going forward.