This service is declaring that it's “crypto altseason” again

This service is declaring that it’s “crypto altseason” again

]

Every week, subscribers of Cointelegraph’s data analytics platform receive a detailed breakdown of each algorithmic tool’s performance.

Over the weekend, Cointelegraph’s Markets Pro data intelligence service, which offers institutional-grade research tools for crypto traders, shared the latest VORTECS™ Report with its subscriber community.

The full report, available only to subscribers, zooms in on the past week’s biggest-gaining tokens as identified by the system’s artificial intelligence tools and offers interpretations of the data that it makes available to traders. Here are some of the highlights of the latest report:

Altseason is here. The Altseason Indicator, CT Markets Pro’s metric that assesses the relative market strength of Bitcoin (BTC) vs. altcoins, finally flips to the alts’ side!

CT Markets Pro tools — the VORTECS™ Score and NewsQuake™ alerts — flash bullish on four out of the 10 best-performing assets of the week.

WAXP doubles its price shortly after Markets Pro subscribers receive a NewsQuake™ alert regarding its listing on Binance.

Markets Pro subscribers receive a NewsQuake™ alert when COTI is listed on Coinbase, and the token subsequently surges 150%.

A red VORTECS™ Score lights up for COTI ahead of its price correction following the listing.

Average returns: Longer waits continue to reward traders, as 40-plus instances of high VORTECS™ Scores are registered for a second consecutive week.

It’s altcoin spring again

The Markets Pro Altseason Indicator metric is designed to help traders figure out whether it is a good time to be stocking on altcoins or to be prioritizing BTC investments over the next 14 days. The indicator takes into account the same variables as the VORTECS™ Score — price movement, tweet volume, trading volume and social sentiment — plus additional data sources such as altcoin listings and crypto projects’ press coverage.

When Bitcoin struggles and the market turns bearish, many traders tend to see BTC as a safer place to park value than more volatile alternative crypto assets. Conversely, when Bitcoin’s position is robust and investor optimism carries over to the altcoin market, money flows to the side of alts, where massive gains can be made.

In May, following months of a blooming altseason that started in early 2021, the Altseason Indicator flipped to the BTC side amid Bitcoin’s troubles and the corresponding bearish trend in the overall crypto market. However, the recent bullish turn meant that it was only a matter of time before a new altseason began.

Within separate seven-day periods over several weeks now, altcoins have on average been generating larger gains than Bitcoin. Yet, the way it usually works is that Bitcoin must first gain a very solid footing, and only after the original cryptocurrency is healthy enough can altcoins finally break out.

After BTC stabilized in the $45,000–$50,000 corridor, the path was clear for alts to storm to new highs. Now, the indicator is 33% on the altcoin side, meaning that historical conditions are favorable for trading alts. While this is still not a very strong Altseason Indicator score, the reversal is itself remarkable.

To get more data-powered insights like this, join hundreds of Cointelegraph Markets Pro subscribers who derive actionable insight from the platform’s data tools and its vibrant Discord community daily.

Cointelegraph Markets Pro is a simple, easy-to-use dashboard powered by the same technology and data used by the leading institutional investors — at a fraction of the cost. For the full report available exclusively to members, visit pro.cointelegraph.com.

More Bullishness On the Way?

]

InvestorPlace - Stock Market News, Stock Advice & Trading Tips

Will the market keep climbing? Today, you’ll get the latest thinking from our technical experts, John Jagerson and Wade Hansen. In their Strategic Trader update last week, John and Wade tackled where the market goes next. They analyzed a recent “Bear Trap,” a valuable source of market data called the “Commitment of Traders Report” and what it’s telling us right now, and finally, how breadth is shaping up in the S&P 500. Together, these indicators offer hints about what’s right around the corner for stocks. For newer Digest readers, Strategic Trader is InvestorPlace’s premier trading service. It combines options, insightful technical and fundamental analysis, and market history to trade the markets, whether they’re up, down, or sideways. So, what’s John and Wade’s latest analysis indicating about the health of today’s bull market? Let’s find out. I’ll let them take it from here. Have a good weekend, Jeff Remsburg

Technicals are Improving the Prospects for the Rally

By John Jagerson and Wade Hansen

There are some in the financial press calling last week’s volatility a “bear trap.” We think that is a little hyperbolic, but we agree with the sentiment of that expression.

A bear trap occurs when a stock (or index) is rising and then starts to correct where profit taking a short-selling accelerates. The trap is sprung once buying momentum picks up and the short sellers have to cover again.

To characterize the retracement last week as a bear trap is an exaggeration if we only focus on price movement. A better example of a bear trap would be September 2020. However, the pace at which short-selling jumped last week is concerning.

Bloomberg is reporting that short selling by hedge funds outpaced buying by a ratio of 10:1. Of course, the ostensible purpose of a hedge fund is to “hedge” the market, so this ratio isn’t unprecedented, but it is higher than normal.

Figure 1 –S&P 500 Bear Trap

Something that could help us think about risks to the market is the Commitment of Traders Report (COT) released by the CFTC each week. Although the data lags by a few days, it helps us see how traders are positioned in the futures market. If risk-takers (speculators) are as bullish on the major stock indexes as they have been in the past, then the rally is likely to be fine regardless of hedge funds short selling.

We measure speculator momentum in the COT report by looking at whether they are still net long, and if so, how large is that cumulative position. In the following chart, the blue line represents small speculators (individuals and small firms) and the green line represents large speculators (hedge funds and institutional traders.) In both cases, the level on the y-axis shows that risk-takers are net-long. Compared to the last two years, both classes of traders have larger than average long positions as well.

Figure 2 –Speculator Momentum in the COT

Despite major unknowns in the market including COVID-19 future infection rates, the Fed’s bond purchasing taper, and low market breadth, the COT report implies that the trend is relatively strong, which gives us more opportunities to sell income with both short puts as well as covered calls on the portfolio’s long stock positions.

Another key measure of market strength that we have been discussing for a few weeks now has also continued to improve, which should support the rally even further. This is the S&P 500 Equal Weight index. The idea behind the index is to weigh each of the components of the S&P 500 equally rather than disproportionately favoring the biggest stocks like AAPL and MSFT. If the equal weight index is breaking to new highs with the S&P 500 itself, then it acts as confirmation of the rally.

The best way to chart the equal weight index in your own watchlist is with the Invesco S&P Equal Weight ETF (RSP) which is included below. As you can see, the index broke to new highs at the end of July and has now retested that breakout point with a bounce on August 19th, which establishes support.

Figure 3 – S&P Equal Weight ETF (RSP)

From our perspective, the confirmation we would still like to see is a breakout in small caps and transportation stocks. In the case of small-cap stocks, you can see a chart of the Russell 2000 below that has been channeling between $2120 and $2320 since February. Momentum among transportation stocks is even weaker.

In our view, the lack of momentum in these two categories is largely due to uncertainty around the pandemic. Will travel be curtailed again? Are parents going to be able to stay at work or will they have to deal with school dismissals this year? Are services like restaurants going to be shut down again? Traders are likely pricing in a discount in the major indexes over those questions.

Figure 4 – Russell 2000

The positives in the market of strong earnings growth rates, new hiring, and momentum in the major indexes should prevent any major retracement this quarter. The negatives of narrow breadth and uncertainty about the pandemic are not serious enough yet to trigger a major reversal, but we expect volatility to remain high. The regular ebb and flow we have seen this year (including last week’s “Bear Trap”) will probably continue.

The Bottom Line

Now that second-quarter earnings are behind us (for the most part,) the next few economic reports will take on greater importance. New home sales ticked higher on Tuesday after falling for a few months. Based on information from some big builders, this trend should continue through the end of the year. Preliminary GDP will be released for the quarter on Thursday. We aren’t expecting any surprises, but the inflation data included with GDP could be a market-mover.

Finally, the Jackson Hole Financial Symposium takes place this weekend. Over the last 13 years, this has become a traditional location for the Fed Chair to make big monetary announcements. Jerome Powell will be speaking on Friday and his comments are the most likely short-term threat to the market if traders detect any (real or imagined) hints that the Fed will pull back on its current easing program.

For now, we recommend maintaining a bullish bias with a focus on maximizing income.

Sincerely,

John Jagerson and Wade Hansen

Editors, Strategic Trader

The post More Bullishness On the Way? appeared first on InvestorPlace.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Using Bullish Candlestick Patterns To Buy Stocks

]

Candlestick charts are a type of financial chart for tracking the movement of securities. They have their origins in the centuries-old Japanese rice trade and have made their way into modern day price charting. Some investors find them more visually appealing than the standard bar charts and the price actions easier to interpret.

Candlesticks are so named because the rectangular shape and lines on either end resemble a candle with wicks. Each candlestick usually represents one day’s worth of price data about a stock. Over time, the candlesticks group into recognizable patterns that investors can use to make buying and selling decisions.

Key Takeaways Candlestick charts are useful for technical day traders to identify patterns and make trading decisions.

Bullish candlesticks indicate entry points for long trades, and can help predict when a downtrend is about to turn around to the upside.

Here, we go over several examples of bullish candlestick patterns to look out for.

1:34 Click Play to Learn How to Use Bullish Candlestick Patterns to Buy Stock

How to Read a Single Candlestick

Each candlestick represents one day’s worth of price data about a stock through four pieces of information: the opening price, the closing price, the high price, and the low price. The color of the central rectangle (called the real body) tells investors whether the opening price or the closing price was higher. A black or filled candlestick means the closing price for the period was less than the opening price; hence, it is bearish and indicates selling pressure. Meanwhile, a white or hollow candlestick means that the closing price was greater than the opening price. This is bullish and shows buying pressure. The lines at both ends of a candlestick are called shadows, and they show the entire range of price action for the day, from low to high. The upper shadow shows the stock’s highest price for the day, and the lower shadow shows the lowest price for the day.

Image by Julie Bang © Investopedia 2020

Bullish Candlestick Patterns

Over time, groups of daily candlesticks fall into recognizable patterns with descriptive names like three white soldiers, dark cloud cover, hammer, morning star, and abandoned baby, to name just a few. Patterns form over a period of one to four weeks and are a source of valuable insight into a stock’s future price action. Before we delve into individual bullish candlestick patterns, note the following two principles:

Bullish reversal patterns should form within a downtrend. Otherwise, it’s not a bullish pattern, but a continuation pattern. Most bullish reversal patterns require bullish confirmation. In other words, they must be followed by an upside price move which can come as a long hollow candlestick or a gap up and be accompanied by high trading volume. This confirmation should be observed within three days of the pattern.

The bullish reversal patterns can further be confirmed through other means of traditional technical analysis—like trend lines, momentum, oscillators, or volume indicators—to reaffirm buying pressure. There are a great many candlestick patterns that indicate an opportunity to buy. We will focus on five bullish candlestick patterns that give the strongest reversal signal.

The Hammer or the Inverted Hammer

The Hammer is a bullish reversal pattern, which signals that a stock is nearing bottom in a downtrend. The body of the candle is short with a longer lower shadow which is a sign of sellers driving prices lower during the trading session, only to be followed by strong buying pressure to end the session on a higher close. Before we jump in on the bullish reversal action, however, we must confirm the upward trend by watching it closely for the next few days. The reversal must also be validated through the rise in the trading volume.

The Inverted Hammer also forms in a downtrend and represents a likely trend reversal or support. It’s identical to the Hammer except for the longer upper shadow, which indicates buying pressure after the opening price, followed by considerable selling pressure, which however wasn’t enough to bring the price down below its opening value. Again, bullish confirmation is required, and it can come in the form of a long hollow candlestick or a gap up, accompanied by a heavy trading volume.

The Bullish Engulfing

The Bullish Engulfing pattern is a two-candle reversal pattern. The second candle completely ‘engulfs’ the real body of the first one, without regard to the length of the tail shadows. The Bullish Engulfing pattern appears in a downtrend and is a combination of one dark candle followed by a larger hollow candle. On the second day of the pattern, price opens lower than the previous low, yet buying pressure pushes the price up to a higher level than the previous high, culminating in an obvious win for the buyers. It is advisable to enter a long position when the price moves higher than the high of the second engulfing candle—in other words when the downtrend reversal is confirmed.

The Piercing Line

Similar to the engulfing pattern, the Piercing Line is a two-candle bullish reversal pattern, also occurring in downtrends. The first long black candle is followed by a white candle that opens lower than the previous close. Soon thereafter, the buying pressure pushes the price up halfway or more (preferably two-thirds of the way) into the real body of the black candle.

The Morning Star

As the name indicates, the Morning Star is a sign of hope and a new beginning in a gloomy downtrend. The pattern consists of three candles: one short-bodied candle (called a doji or a spinning top) between a preceding long black candle and a succeeding long white one. The color of the real body of the short candle can be either white or black, and there is no overlap between its body and that of the black candle before. It shows that the selling pressure that was there the day before is now subsiding. The third white candle overlaps with the body of the black candle and shows a renewed buyer pressure and a start of a bullish reversal, especially if confirmed by the higher volume.

The Three White Soldiers

This pattern is usually observed after a period of downtrend or in price consolidation. It consists of three long white candles that close progressively higher on each subsequent trading day. Each candle opens higher than the previous open and closes near the high of the day, showing a steady advance of buying pressure. Investors should exercise caution when white candles appear to be too long as that may attract short sellers and push the price of the stock further down.

Putting it All Together

The chart below for Enbridge, Inc. (ENB) shows three of the bullish reversal patterns discussed above: the Inverted Hammer, the Piercing Line, and the Hammer.

The chart for Pacific DataVision, Inc. (PDVW) shows the Three White Soldiers pattern. Note how the reversal in downtrend is confirmed by the sharp increase in the trading volume.

The Bottom Line

Investors should use candlestick charts like any other technical analysis tool (i.e., to study the psychology of market participants in the context of stock trading). They provide an extra layer of analysis on top of the fundamental analysis that forms the basis for trading decisions.

We looked at five of the more popular candlestick chart patterns that signal buying opportunities. They can help identify a change in trader sentiment where buyer pressure overcomes seller pressure. Such a downtrend reversal can be accompanied by a potential for long gains. That said, the patterns themselves do not guarantee that the trend will reverse. Investors should always confirm reversal by the subsequent price action before initiating a trade.

follow us