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Friday, December 22, 2017 12:18:52 PM
Thats what happened. Today, the dreaded gap to the downside at the 618 fell. The wick of today's candle punched thru it and then price recovered. Hence, the wick. Its been dealt with, so its not looming out there any more.
One problem is still looming as regards gaps to the downside. I'l describe it, but let me just say at the outset: I doubt it has to get filled. I'll explain.
There's a gap at the 718 (3.41 to 3.50 on 12/11 to 12/12) and today's tail did not fill it.
Now here's my opinion of the necessity (or not) of filling the gap at the 718 Fib retrace level: I don't think its necessary.
Here's why.
The pattern that existed from 8/31 to the upside breakout on 12/18 was a simple rectangular range. The top was the 8/31 high of 4.26 and the low was tested 3 times during the 3 1/2 months it was in the range (low was approx 1.63 & tests were 9/14, 10/25 and 11/22).
The range got broken for good on 12/18. It was a strong take out of the range... the take out was to the upside.
There was a false break above the top on 12/13 where the top of the range was temporaraily taken out. A head fake. Anyway, the actual capitulation where prior resistance became new support was on the 12/18 breakout.
So, the rule of thumb when a range falls by the wayside is that the former resistance becomes new support.
Former resistance was 4.26, so new support is 4.26
What this means in terms of the need to take out the gap at the 718 is that the gap (3.41 to 3.50) is well inside resistance.
So, the ideal thing to have happened today would have been for the 718 gap to have been hit and rejected during today's down move. In actual fact, all it did was get into the former range and them reject that and move back above the former resistance level, which is now support at 4.26
As I type, MGTI is at 4.48.
The way I'm gonna read this is to watch the movement in the days to come. The days between Christmas & New Years are going to be thinly traded markets so those days are ideal for pushing things around in a wierd way. So, the 718 may eventually get taken out. But the key to the thing is going to be the resiliance of any penetration of support. Does the 4.26 support level hold in 2018 when people return from their holiday and the market gets into full swing for 2018.
Also, think about what the tax implications are going to be as regards long term gains. Suppose big players want to get in and get a low tax gain and, for the sake of argument, lets also suppose that their overall view is that crypto is going to be a big disrupter & money maker in 2018.
So, if thats true, ask yourselves whether they will be buying any down moves in a limited list of "essential" crypto plays or not? If MGTI makes that list (and I think it does), my "GUESS" is that there will be buyers on any down thrusts between Christmas & New Years.
I'll be watching like a hawk.
And bear in mind: none of what I say is a recommendation to buy or sell any stock. I want that understood. These stinky pinkies are very risky and consider my opinions as just that: OPINIONS only. Opinions are like armpits. Everybody has them.
IW
"Just my opinions, folks. Do your own due diligence & make your own decisions. DO NOT... I repeat... DO NOT make any investment decisions on my comments. They are my opinions. That's all they are... OPINIONS."
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