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Chart Advisor: Springing Your Trap on Crypto

Chart Advisor: Springing Your Trap on Crypto

Posted April 2, 2024

By Jack Hughes, CMT, CTA

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There is a Potential Trap today in Crypto Currencies. 

There is added text today in Bitcoin and Ethereum. 

CRYPTO CURRENCIES: after Thirty Years of supplying market timing and market observations to our Institutional Clients, this missive will be our first foray into Crypto Space.  We will approach the analytical methodology in a similar fashion to our approach to other Asset Classes and Indexes.

Please note the Demand on March 19th’s Trading in both the BTC and ETH daily markets.  For this week’s Trading which ends on April 6th, if there are weekly closes below the March 19th lows in both the BTC and ETH Markets, a Beanpot Trap will occur as weak longs should exit the market and lower prices should follow.  Following this scenario, any upward trading that manifests and is met with supply will dictate market direction as this supply should weigh on trade.  We will Alert you!



BTC-USD – Daily

ETH-USD – Daily

BTC-USD – Weekly

ETH-USD – Weekly


Defining Traps

The Beanpot Trap is a Proprietary Sentiment Indicator using a novel approach to Predictive Behavioral Analysis. The Market’s participant’s collective behavior is identified (proprietary supply and demand) which generates detectable behavioral patterns that are accurately forecasted for price direction. If you know why
a factor works you should know with high probability when the factor should work! Throughout the years, covered market highs and lows leading to Bull and Bear Cyclical and Secular markets have been called in the PowerPlay utilizing the Beanpot Trap.

Definition of a Trap: the trap usually occurs in a very oversold or overbought condition. The market that is highlighted in the PowerPlay should move higher for a few days or weeks in an oversold condition or moves lower for a few days or weeks in an overbought condition, while Proprietary Capital Flow– Supply/Sellers or Demand/Buyers enters the marketplace. Trade is always in great shape above this new demand in an uptrend or it is always in great shape below this new supply in a downtrend; however, if trade takes out the proprietary demand/buyers in an
uptrend or proprietary supply/sellers in a down trend, the structure of the markets have changed leading to profound negative outcomes to the existing trend. If the demand/buyers get taken out, a long squeeze (much lower prices) should follow and if the supply/sellers get taken out, a short squeeze (much higher prices) should follow. It’s trapping the weak longs or weak shorts into a situation where they must dump their positions…a squeeze play should manifest leading to additional selling and buying by other market participants.

The Delayed Whistled Trap is a Proprietary Sentiment Trap Indicator but the outcome of the Trap that has been activated is delayed. We have mentioned the following scenario numerous times in the PowerPlay. Often times the influence of a Trap is seen immediately, as weak shorts or weak longs are forced to exit their positions and a flash move in a direction occurs and at times the directional move is more subtle. If a demand area get taken out in an overbought region but price fails to immediately move
lower, the next supply area to enter the market place should now be most important (the Tell) as the bears should add supply and the question that follows should be…should this added supply keep weighing on the market or should the bulls push through and take back control of the market…we have witnessed that many
market tops should experience this subtle developed pattern…we call this sentiment indicator a Delayed Whistled Trap.

The SP 500 Model Portfolio of Stocks SP 500 Model Portfolio of Stocks is a sentiment
Indictor consisting of 20 Large Cap Stocks. If an X is displayed on our SPX Chart on a low day, the X denotes that at least 13 out of 20 stocks that day are in accumulation/demand mode or if an X is displayed at a high day, the X denotes distribution/supply mode, two XX’s denotes that at least 20 Stocks in a two day period cumulative are experiencing accumulation/demand or distribution/supply or three XXX’s denotes that 25 stocks in a three day period cumulative, are experiencing an accumulation/demand or distribution/supply day. This indicator allows you to see buyers and sellers entering and exiting the market place, a commercial footprint. Strong directional moves are likely to follow. 

Originally posted 2nd April, 2024

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