The 10-year bond has reversed. Rates are moving higher.
If the chart pattern (below) is in effect, if price action moves according to the breakout forecast, real estate … along with lumber prices, as well as the entire economy could experience a series of dramatic ‘air pockets’ all-the-way-down.
Of course, all of this is because of a little ‘speck’ floating around in the air.
Rates are at the wedge trend-line and instead of a breakout upward (as expected), could reverse back lower. Anything can happen. The next week is likely to be very interesting.
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 stock market peaked on September 3rd, 1929, the Tuesday after the Labor Day weekend.
Labor Day for 2020, is Monday, September 7th
The bond market has posted a double top and reversed. Rates are moving up.
Now, the stock market is stretched, extended and rates are rising; similar to August 1987.
The problem is, it’s similar by an order of magnitude or more.
Remember in the most recent downturn, there were trading halts, brokerage server blow-ups and customer accounts going completely off-line.
In that situation, if someone is long and expecting to beat the herd on the way out, good luck.
The firm sponsoring these updates and analysis stopped trading the (equity) long side of the market years ago; recognizing at any moment, the entire system could break-down with any open positions effectively locked.
If there’s another large break with orders, positions, accounts ‘trapped’, for hours or possibly days; who wants to be on the long side of the market?
Silver and gold, future test of new lows? At time stamp 2:58, Sajad hints at same ‘testing the lows’ scenario as was posted with Silver Up, Then Down on July 25th.
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.
Two months ago in this post, the idea was floated that biotech, IBB may be the downside leader.
It certainly didn’t look like it at the time.
Biotech even went on to make a new high … potentially negating the theory.
It’s different now.
After that new high, IBB has reversed and is trending lower.
On the other hand, the overall market, S&P 500, continues its push upward.
It’s within 1% of all time highs.
Pre-market action as of this post, has the S&P opening up about 0.4%, higher … ever closer.
At this juncture, biotech has hinted at downside leadership. That hint my become a solid fact if and when the S&P has a decisive downside reversal.
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.
From bottom to top, silver has exploded over 147%, in less than three months.
In the process, a wide high volume trading range has been created.
So, what happens now?
A likely answer is, go back to silver price action under similar conditions.
That behavior can be summed up as a ‘test’. It’s the nature of the markets to test wide, high volume, (near vertical) price action.
Just what does test mean?
The financial pundits will typically call this type of action ‘consolidation’, but that’s a misnomer.
A test can pass or fail. If the silver market retraces from here … or goes a little higher before a retrace, the nature of the retrace price action is important.
Using the SLV chart shown at the bottom of this post, we’ll be looking for how SLV behaves if and when it comes back to the resistance area … which may now be support.
The last update on silver hinted at a potential new low coming some time after the current run. ‘Some time’, may be months or years.
Let’s step aside briefly and discuss market reality:
Completely contrary to what is espoused in the financial media, money is not ‘at work’ in the markets. It’s ‘at risk’.
Upon entering a position, any position, a tacit agreement has been made by the new entrant and the other participants.
That agreement is to voluntarily walk into what’s essentially the Roman Coliseum.
The longer you’re in the ring, the more chance you have of being gored, mauled, or eaten alive.
So, how does one minimize that risk?
The answer is (from this firm’s perspective), wait for the set-up, no matter how long and then move quickly.
Here’s a prior update that’s a good example of how a trade opportunity was identified seven months in advance; then executed for a 155%, gain in just five days.
End of digression
As for silver, it looks like time to wait. Bullish sentiment at this juncture may (if not already) have reached an extreme. Price action typically reverses at high sentiment levels.
The SLV chart has two prior reversals identified. Those reversal actions are similar but not exact. If silver is to re-test the recent lows, we’ll be looking closely at how it behaves as it returns to potential support levels.
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 latest financial fad, the ‘dollar destruction’ narrative, appears to be losing steam … at least for now.
On the other side of the spectrum are the precious metals markets with their ‘all bets are off’, ‘this is it’, narrative.
Of course, it’s a dog pile of expert opinion on the whys of the dollar destruction.
Why not join nearly everyone else on the #MeToo, fiat currency bandwagon? A safe bet no doubt; we all know how important it is these days to “stay safe”.
So, what’s really going on?
Since this site follows principles laid down a century ago, by Richard Wyckoff, it’s not important to know the “why”. That reason changes daily if not minute by minute. The truth behind the move will eventually come out; long after the trend has reversed.
As trading legend Ed Seykota inferred, if you want to make money, fundamentals are essentially a waste of time.
What we see is downward thrust energy on the dollar proxy, UUP is declining. Downward enthusiasm is waning.
Does that mean go long on the U.S. Dollar? Well, that’s up to the reader. What is being presented here, is the latest hysteria is at least slowing down or coming to a pause.
As Jeremia Babe reports at this link, were just one or two innings into the greatest financial collapse of all time. The dollar may go through wild excursions before potentially coming to its long awaited fiat demise.
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.
Amgen’s the heavy hitter, the leader in the biotech sector. It’s by far the largest cap equity in the IBB, ETF.
Right now, AMGN is pushing down through support; confirming a down trend that essentially started on July 28th, last week.
At this juncture, AMGN price action’s at the danger point. It can go either way with a confluence of orders; buy, sell, and sell-short.
If the trend-line (chart below) is not broken to the upside, AMGN is moving lower at a whopping -90%, on an annualized basis.
As stated, the firm sponsoring this site is heavily short in this sector; increasing the short position on a near daily basis.
Obviously, this is not a recommendation. We can’t do that as stated in the disclaimer below and here as well.
The inverse fund BIS, that’s being used to position short as with other inverse ETF funds can blow up (or fail) unexpectedly. We’re well aware and cognizant of the conditions under which that type of anomaly may occur.
At this point, BIS is ‘well behaved’. However, BIS may be exited at any time and without notice.
By this time it should be quite evident that we (U.S. citizens) and the rest of the world are smack-dab in the biggest, most dangerous farce in world history.
Anyone with two synapses rubbing together can see there is ‘no scientific evidence of anything’, stated at time stamp 9:22, in this link.
If or when the truth-cork finally pops out of the bottle for all to see, it’s too late. The emperor has no clothes. That emperor is biotech.
Recognize in the markets, anything can happen. It’s possible and likely probable another false narrative will be launched to manipulate the weak. The current narrative is losing effectiveness. If so, the next one has to be even more outlandish.
Back to biotech. If AMGN breaks its trend to the upside, the reversal scenario is either negated or modified.
Trend-line break or not, there’s a false narrative at play. Those not able to see and those not willing to take action, risk being swept away with the tide.
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.
If the chart pattern (below) is in effect, if price action moves according to the breakout forecast, real estate … along with lumber prices, as well as the entire economy could experience a series of dramatic ‘air pockets’ all-the-way-down.
The problem is, it’s similar by an order of magnitude or more.
Interest rates are rising. 10-yr rates up. Similar set-up as 
It’s different now.
What we see is downward thrust energy on the dollar proxy, UUP is declining. Downward enthusiasm is waning.
At this juncture, AMGN price action’s at the danger point. It can go either way with a confluence of orders; buy, sell, and sell-short.
The Danger Point® 