👉Portfolio index 100.82
👉Fees paid 0.2460 ETH
👉Total options volume 820
👉Net Profits 0.0170 ETH
👉Current value 2.1007 ETH
👉Days elapsed 9
👉Days remaining 171
👉Daily % to reach target 1.36%
👉Daily % realized 0.09%
👉Projected value 2.3529 ETH
👉vs. target 11.76% > I’m lagging!
Note to self: write very soon an [EDUCATION] post about the following topics: lagging & leading indicators, MACD, RSI, Chaikin oscillator & volume and some typical patterns (head & shoulders, flag, wedge, pennant, triangle).
Hej everyone,
First off, OK I know I’m not a good designer! But I swear I’ll do my best to improve the arts of each post ;) By the way, if you have some tips about it, you can shoot me an email at cryptoptions@substack.com (not sure though I’ll keep this by default email).
What happened today
Morning / early PM 👉📈
Earlier today, at noon Paris time, the chart configuration led me to think that some profits taking were on the way, which in my view was positive for the upcoming US crypto investors. ETH overnight and during the European morning appreciated by $ 130 on what I estimated sound momentum (RSI) & trend (MACD) indicators (I’ll soon come back with definitions and examples of these indicators in an [EDUCATION] post).
So the picture was rather promising for the PM.
And that happened really quickly! At 1.30pm, boom, ETH +$ 40 over ☕ time.
What happened today
PM / evening 👉📈📉↔
It is “safe” to notice that $ 1’600 has become an important congestion zone ($ 1’555 - $ 1’625) that alternates between support & resistance (see an upcoming [EDUCATION] post about it too).
Any major attempt over the past week or so has failed to materalize in more gains.
What I do not like at the moment
Let’s kinda zoom in and look at the current configuration which in my view indicates a potential reversal downward.
On a 15 minute chart (but also valid on a 30 or 60 minute one), there seems to be a bearish “head and shoulders” in the making. That’s a very typical technical analysis pattern that anyone tries to identify at all time (how many times on the “floor” have I heard a colleague warning for such a pattern.. that ultimately did not materialize!).
A left shoulder (inverted half circle) THEN a head (a spike) THEN a right shoulder (another inverted half circle), all of them supported by what is called a neckline (the flattish upwardish black line).
To me we’re in the typical development of such a pattern for 4 [EDIT! I initially wrote 3] reasons:
1. RSI turning weak (a leading indicator), the red line below the chart
2. MACD turning flat to weak (a lagging indicator), the blue+red line below the RSI
3. Chaikin oscillator (the last red line at the bottom) showing that volume is fading away
4. Last but not least, the price going below the neckline
Technical Analysis has it that when all of these conditions are met, the price action will retrace (go south) “by the height of the HEAD”, ie the YELLOW vertical line.
In that case we may be heading to $ 1’520.
My strategy overnight
As a reminder, I am long 28 deep out of the money calls ETH 28MAY21-3000 and with a DELTA at 26 because I think in the next 2 to 3 weeks maximum, ETH will experience a strong bull run, with plenty of time value as my option’s strike ($ 3’000) will be neared by the real price of the ETH.
The question one needs to ask in such a situation: is it worth trying to catch a -5.5% retracement of the ETH with a wild bet (close long calls and go long puts $ 1’560 or $ 1’520 expiry MArch 5th [EDIT! I forgot initially to indicate the expiry]) or stick to a medium term bull view on ETH which is the rationale for my long 28 calls ETH 28MAY21-3000 position?
Answer? You bet. Sticking 🔥
When I check tomorrow
I think price action will be hovering around the neckline ($ 1’590ish), because taking a step back and considering the bigger picture (daily chart vs. 15min chart), the RSI is bottoming close to the 50 level (that’s a positive), the MACD is improving (less negative) and the Chaikin oscillator (volume is a very important metric) is bottoming, meaning that a lot of sellers are deemed gone.
Recap of my portfolio since inception (Feb. 23, 2021)
That’s all for today, speak soon.
Raph.