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CRYPTOCURRENCIES Selling Climaxes


In his book, “Charting the Stock Market”, Jack K. Hutson describes the Wyckoff Method and on p. 27 there is a fitting passage to the next chart. “A selling climax is the finale to a panicky unloading of stocks, which are snapped up by more savvy operators.” He goes on to say a technical rally follows, oſten caused by short covering and says if the market reacts to the rally with shrinking volume and prices hold


at or


above the selling climax’s low, it is an indication that the selling pressure has subsided, and that demand may start to outweigh supply. In chart 1.13, the low on that double bottom was around $13,340. As the market


retested that


area it did so on lighter volume, resulting in a $1,500 reaction rally.


CME Bitcoin Futures Launch


Same day as Bitcoin futures started trading on the CME was the top of the market. Ironic,


Chart. 1.16 May 22, 2018 – Ethereum at €574


I have traded this pattern in multiple markets and timeframes and the win ratio is phenomenal


but not surprising. It was a great example of buying the rumor and selling the news. We also saw some


FX


prominent people in the space holding off on plans to launch a hedge fund and exiting altogether as noted in chart 1.14.


On December 19, 2017 I commented that the market was topping out and on December 27 I gave a heads-up that the market was setting up for a short trade. Te C point of the ABC correction printed on January 6, 2018 at $17,235 and was followed by another impulse


wave Chart 1.15 Profits in the Stock Market, H.M. Gartley, p. 222 which


made a low at $ 9,222. H.M. Gartley


There is nothing new under the sun and that is certainly true for trading. In 1935, Harold Gartley drew a


schematic graph


with entry and stop- loss levels for a short sale in the stock market, illustrated in chart 1.15. It worked then, and it works today because human behavior never changes.


Fast forward 83 years and I see that same pattern in Ethereum, shown in chart 1.16.


FX TRADER MAGAZINE October - December 2018 23


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