LTCUSD Is Pulling Back To Equilibrium 12-14-17
Looking at LTCUSD on the daily time frame, we can see that price has been in a strong rally! I had suggested not jumping in the rally if you didn’t catch the start of the move or at least had a prior plan of how you wanted to catch this train. Jumping in a rally is basically gambling that the rally will continue and if it fails to continue then your stuck in a draw-down. Having a plan with levels at least puts you at a point for a higher probability trade and also some sort of support to where you know your trade could have strength from falling any lower. So with that said, our current daily chart shows us that the rally could be correcting itself. The asset is way out of equilibrium and now we will look for the level where this will become a good buy opportunity again. That immediate level is the daily Kijun where the blue line is located. The markets or any other asset is attracted to the Kijun like a magnet because this is the point of equilibrium and we start having a balanced market of buyers and sellers at equilibrium. Currently we do not have an opportunity but we will wait and see what the price tells us when we reach the Kijun level. We trade on the LST concept which means we need a Level, Signal and Trigger to enter a trade. Now looking at the indicator on the bottom of the chart, this is the Ultimate Oscillator! This is the best tool to use for divergence as it works off of three time frames with the settings of 7-14-28. You can also use Stochastic or RSI as they work well also. The indicator is showing that we have bearish divergence meaning the trend is weakening but that does not mean that we cant go higher. Divergence takes some time to kick in and usually it is a support or resistance level where we see the price really react. Since the price of this asset is at it’s highest point ever, we have nothing to base the support and resistance levels on. This is where fractals and Ichimoku can help us! So our plan is to patiently wait to see if price reaches the daily Kijun. If price reaches that level then we will make our plan. Trade when the train is at the train station and remember, Trees that are slow to grow bear the best fruit! God bless!