The Plan

The image below may be the best descriptor of the (economic) plan going forward. Full (forced) compliance won’t be achieved until every vestige of small-business (Mom & Pop) is destroyed.

On the bright side, at least we know what’s coming.

The near instant, within hours fracking about face, could be used as the economic model; destroy everything and do it quickly.

Self employment (S-Corp of one) may or may not be the ultimate answer. One thing it might do, is offer more time for maneuvering. That’s critical when ‘speck’ injectors show up at large firms and force everyone into line.

With that in mind, two sectors have been the focus as opportunities for short positions.

Oil & Gas, XOP and real estate, IYR.

There are others like gold with GDX down again in the pre-market … thus confirming a bearish trend.

It could wind up that shorting GDX was the best option.

However, since there’s such rabid indoctrination into the hyper-inflation theme, it could be a bumpy road to the bottom … the exact worst thing for an inverse ETF.

Those trading vehicles prefer straight down action. Otherwise, they erode (value) quickly.

Analysis of the Oil & Gas sector was covered just recently, right along with identifying a reversal. XOP is down again in the pre-market with DUG up.

The short position in DUG is being maintained (not advice, not a recommendation) with chart analysis to come over the weekend.

Real estate, IYR shows a lower open as well.

Going short this one (via DRV) has been more time consuming. As IYR heads lower after an apparent false breakout (Wyckoff up-thrust), increasing the line (position size) is the objective; not advice, not a recommendation.

Depending on today’s price action, chart analysis on IYR and DRV will be forthcoming.

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

GDX Reversing, As We Speak

If GDX price action continues lower, it may have completed its test forecasted three-days ago.

The gold market is a very crowded trade. At this point, one to be avoided (not advice, not a recommendation).

If GDX posts a new daily low (below 35.40), it would give extra weight, the test is complete.

At the minimum, price action has recognized the bear flag by coming back up to test and then pulling away.

That alone, should give the gold bulls some pause.

In other markets, real estate IYR, did exactly as forecast. It opened below yesterday’s close and retreated from there.

The upward test, also discussed in this morning’s update may have already happened; there’s a 38% retrace present on 30-minute or shorter time-frames.

Correspondingly, the DRV position has been increased (not advice, not a recommendation). At this point we have an absolute hard stop: Yesterday’s DRV low, @ 9.67.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Fake Breakout

It’s possible yesterday’s real estate breakout was false.

This update includes three charts; two are on the weekly time-frame and one, is a 30-minute chart.

Yesterday, IYR barely nudged the resistance zone and attempted to hold. Late in the session, price action eroded a bit into the close.

We’re in a terminating wedge.

This type of action is counter-trend. Price bars overlap and are struggling against the main trend which remains down.

The 30-minute chart (above) has more detail.

Barely able to hold the highs, price action is at the boundary. Like yesterday’s update on XOP, we have IYR in a similar position:

At the edge of the lake.

Pre-market action is highly unusual (because of the wide spreads) in the IYR inverse funds SRS and DRV. However, that’s what we have now.

Pre-market in DRV points to a higher open (lower for IYR).

Anecdotal evidence from Jerimia Babe, shows us nobody’s home; a wide swath of vacant rea estate. It’s reasonable to say, this situation is repeated in various degrees nationwide.

We’re still short the sector (via DRV); admittedly it could have been better. Not advice, not a recommendation.

From a strategic standpoint (for the firm), it’s an initial position and so not too concerned about the draw-down.

At this point, two outcomes are possible with one more probable.

First, IYR price action may continue on higher (less probable) and if so, we’ll have to exit DRV.

Second, and based on pre-market action, IYR will open below yesterday’s highs, then a potential upward test, followed by downward action.

That may all happen today or over a number of days.

Lastly, based on news and internet scuttlebutt, no time will be wasted on destroying what’s left of the economy and remaining vestiges of the middle class.

The final nail could include a swift, unrelenting market collapse that includes seizure of IRA accounts (at minimum). A topic researched long ago with more detail in the link above.

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Edge of The Lake

The late David Weis, instructed his students during a 2007, trader’s camp sponsored by Dr. Elder, that ‘trades are found at the edge of the lake’.

Most of the training session was recorded and reproduced on DVD. That video is still available, linked here and is a wealth of knowledge.

Within the video, Weis analyzes what he calls ‘The Apache Spring’.

No, it’s not a history lesson of Chato’s raids in New Mexico Territory during the spring of 1882; it’s an analysis of Apache Oil, ticker APA.

That analysis alone, should be enough to convince any rational person, price action has absolutely nothing to do with any fundamentals.

Wyckoff repeated this assessment in his autobiography; ‘prices have an energy of their own.’

Prices are manipulated. They always have been; but it’s not important to know who’s doing the manipulating.

What’s important, is to discern (within probability) the objective of the manipulation.

Which brings us to Oil & Gas, XOP.

We’re at the edge of the lake.

Up-volume is declining and momentum (MACD) has bearishly diverged. If there’s to be a sustained reversal, this location is high probability.

Price action in XOP, is attempting to close the reversal gap. This morning’s pre-market shows it might do that in today’s session.

We’re already short the sector via DUG (not advice, not a recommendation) and watching carefully for gap closure with subsequent continuation of the nascent reversal.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Dollar Channel Identified

There’s a possible trading channel in dollar index ETF, UUP.

The channel shown is a Fibonacci 21-days wide; added bonus is max bottom (1/6/21), posted a Fibonacci 13 days after ‘Day 1’.

These are market nuances that can be negated at any moment.

However, if the channel holds, it’s just one more indication we’re at a significant inflection point.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Real Estate Trend Test

Real estate (IYR) broke its nine-month trend; now testing the underside.

The break was on exceptionally heavy volume from January 4th through the 7th, and naturally lends itself to be tested. That’s where we are now.

Adding to the reversal premise, narrow thrust action preceding it.

When thrust distance narrows, it’s time to expect a trend change.

Up-side appears limited as IYR is contacting its trend while at the same time, approaching significant resistance in the 85 – 86 area.

Unless IYR penetrates that resistance, it’s still subdividing lower, indicating reversal in progress.

We’re still positioned short (via DRV, not advice, not a recommendation) with a bit more draw-down than desired.

The first hour of trading is likely to give a signal to stay in or step aside and wait.

Separately, in other markets, looks like GDX is going to test or start to test, underside (bear flag) resistance today.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

GDX Upward Test Possible

Last week, Senior Miners GDX, broke out of a bear flag to the downside.

There could be a little more momentum lower before reaching support in the area of 33 – 34.

After that, expect a test to the underside of the flag. This is typical market behavior.

If that happens, we’ll have familiar gold bull hysteria ‘this is it!’ All the while, GDX and gold (GLD) grinding lower.

Recall gold (and related), is a very crowded trade. Eventually, there will be a sustained bull market … probably after all have grown weary hearing the rumor of it.

Anecdotally, remembering entries from a diary during the 1932 lows (the actual source has been lost), were to the effect:

‘Everybody knew that major stocks were a once-in-a- lifetime deal, but nobody had any money‘.

That lifetime deal, or deals may come. The objective is to survive, prosper and be ready when it gets here.

With that, there’re probably much better opportunities for a directional move to the downside.

Real estate, Oil & Gas Exploration sectors come to mind.

On the real estate side, it’s unfortunate, sad, but entirely possible a significant number of those to lose their homes through foreclosure, are somehow going to be housed in now-empty, or near empty commercial (mall) areas or office buildings.

If so, that relocation process will take a significant amount of time. The value of IYR’s components (SPG, EQR, etc.) may reach some type of bottom before it’s all straightened out.

We’re already past the beginning stages of a massive life-long depression.

Getting focused on it, is difficult but best if one is to come out the other side intact; or better yet, well positioned to re-build.

Next scheduled analysis: Real Estate, IYR

Stay Tuned

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Fact vs. Fiction

Two reports discussing the exact same topic, are linked here and here.

One of the reports is fact; the other is fiction.

Just two minutes, and twenty-eight seconds into one of those, the fairly tale begins.

The other has its head on straight and is on-target with truth; a disturbing truth.

Alas, the hyper-inflation narrative runs deep. Comments from the last Van Metre report shows just how deep the rabbit hole goes.

We’ll paraphrase:

‘GDX filled the downward gap … metals to skyrocket higher’.

With every day that passes, we see truth of what comes first; as reported here, it’s corn first, then gold & silver.

Putting it differently; seed producers can’t keep up with demand.

At least one supplier linked here, is shut down … temporarily they say because of huge order backlog.

Interesting their planed re-open, is for the 20th. We’ll see if that happens.

Way back in April last year in at least one state, it was illegal to buy seeds. That same scenario never happened with precious metals.

Are the coin dealers shut down? Precious metals may indeed become important at some future date. However, at this juncture it’s easy to hypothesize you won’t be able to buy or sell without ‘speck’ protection.

Getting that protection essentially makes being around to see (or function in) the future a moot point; doesn’t it?

Stay Tuned

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Day After: XOP Reversal

Last Thursday, the day the XOP report was posted, it topped.

The day after, Friday, it reversed.

XOP opened gap-lower and inverse fund DUG opened gap-higher.

Sometimes, it’s that simple. Went short the the sector (not advice, not a recommendation) at DUG 21.5899

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

Ancient Art: Point & Figure

You don’t hear about Pont & Figure anymore. P&F looks old, stodgy and boring; but that’s exactly how one should approach the markets to be consistently profitable.

Paraphrasing Dr. Elder from ‘Come Into My Trading Room‘, he says:

‘Trading is an old man’s game; you need to have a good, long memory.’

Well, the author of these updates is certainly old … well into his sixties and with a long memory; The crash of ’87, debt wipeout of ’98, tech bubble crash of 2000, the 2008 meltdown and now, today.

Those advanced years tempers one’s desire to constantly jump in and out on the swings. Not to say that might need to be the method at the time; but like Van Metre’s approach, the big money’s in the big move.

The jobs data released yesterday basically tells us ‘The economy ain’t coming back’ … possibly ever, in our lifetimes.

We’re at an order of magnitude greater than 1929; it was thirty years before that market returned to its prior levels.

Which brings us back to real estate and IYR. The P&F chart shows us, if there’s a breakout to the downside, initial projection of the move is to support around 69 – 73.

Keep in mind that if (or as) price action passes down through the low 80’s, it then builds up another area of congestion projecting even lower. The initial breakdown would only be the start of downside potential.

With that in mind, the firm is in position (not advice, not a recommendation) using DRV as the trade vehicle. Stop level is in the vicinity of yesterday’s DRV low @ 10.38.

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Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.