Dow 30: Measured Move

It’s thirty-minutes before the open. Dow tracking ETF, DIA is trading lower about one-point or -0.43%.

The inverted chart of DIA, has a wedge breakout.

Using traditional techniques for a ‘measured move’, we can project to the 235-area for DIA.

When and if that happens, the Dow will have pushed below significant sepport levels that would then become resistance.

Inverse fund typically used for the downside (not advice, not a recommendation) would be DXD at 2X Inverse.

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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.

Trending: Biotech

Today’s action may be in a trading channel.

It’s a Fibonacci eight days from the low of September 4th, to the top on the 16th.

That time correlation, along with the channel hits, help to provide validity to the set-up.

Our short position in the sector has not changed appreciably.  There was a slight backing off yesterday, by reducing the size about one-percent.

However, during today’s action as IBB was making intraday highs (BIS making lows), the short position was increased, via BIS.

In any event, we have a hard stop at the day’s high, IBB 134.85, which is approximately 31.46, on BIS:  Not financial advice, not a recommendation.

As of this post, 7:00 p.m., EST, the S&P 500 futures are trading down about -0.50%, giving the inference that downside action will continue at the next session.

Silver futures have dropped another 4.5% – 5%. Price action’s heading straight down.  Nearest chart support for the SIZ20 (December) contract is around 20.00.

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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.

Silver Freak-Out

It’s all starting to sound like the global warming scam. 

‘It’s only ten years before all the ice caps will be melted’.  Problem is, it’s only been ten years for at least 40-years!

Note:  For a total evisceration of the AGW narrative (or hoax), Tony Heller has done an excellent job.

Which brings us to silver and the boogeyman of ‘hyperinflation’s just around the corner’.  It could be the latest false narrative that’s not panning out.

At some point, the dollar will go to zero.  That’s well understood by anyone with a modest amount of financial knowledge.

It’s what happens before that; that’s what’s important.

Even J. Bravo, is starting to think it may not be a slam dunk to dollar zero.  He had a guest on a while back that got howls of disapproval with his deflation (first) assessment.

Not saying the premise is right.  Just saying when there’s that much of a consensus (hyperinflation), it has a nasty habit of not coming to fruition.

As always, anything can happen.  We could get hit with a solar flare or a massive volcanic eruption throwing everything out of balance.

Matter of fact, both of those are highly likely right along with a near earth miss, asteroid passing within 13,000 miles … tomorrow.

In the meantime, we’ll focus on typical market behavior.

The last update stated:  “Barring any additional upside, the expectation is for price action to retrace and test the wide, high volume chart areas.”

Fast forward to now.  There was just one more blip higher before silver began its correction in earnest.  This is normal and expected market behavior. 

The chart shows there’s potential to go all the way back to support levels at the 17-area.

However, it’s also possible we’ve seen a top and silver’s headed to new lows (time stamp 3:10); That’s completely opposite the consensus and potentially a more likely result.

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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.

Amgen (AMGN) Forecast

Now that AMGN is breaking lower, let’s take a look at how far down it could go.

The chart shows the terminating wedge pattern.  Depending on where the wedge entry is measured, slightly different projections will result.

A fairly conservative estimate is shown.

If we do not get some kind of recovery back into the wedge itself, a measured move projects to the 185-area.

A potential downside breakout was highlighted yesterday. The press as typical, appears surprised by the markets opening lower, continuing lower.

Doing what they do (fabricate a ‘reason’), AMGN’s decline seems to be a political problem … even though its been in a topping formation for years with ever slowing upward trend.

No matter, it’s all about healthcare uncertainty.  Tomorrow it may be all about something else. 

Wyckoff said over a century ago, the financial press was essentially useless at best and intentionally deceptive at worst.

A hundred years later, not much has changed.

Wyckoff analysis is one of the best kept secrets on Wall St.  We’ve been using it to spot market opportunities since 2008.  Find out more about Wyckoff analysis here.

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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.

Upside Breakout Ready

The chart below has a bullish wedge.

Price action’s at the wedge top.

This is how it looks just before an up-side breakout.  Of course we’re dealing with probabilities and the pattern could morph into something else.

However, at this juncture it looks about to move … higher.

The problem is and you may have already noticed, the chart does not look quite right.  Why is price action at the bottom and volume at the top?

It’s inverted … turned up-side down.

We’re looking at Amgen (AMGN), inverted.

Inverting the chart is an old trading technique that’s used to remove analysis bias in one direction or other. 

If a chart looks like a buy (or sell) no matter which way you turn it, there’s a problem … a significant trader’s bias that blinds one to the potential.

Amgen is the largest component in the biotech (IBB) sector. The coming week, may support or negate the breakout potential.

An expandable version of the chart above is here.

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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.

Out of Air

Right at the danger point, biotech’s (IBB) upward energy evaporates.

The 2-Day chart below shows a series of thrust energy units.

Going from 57-Million, all the way down to less than 1-Million (0.85-M), in six trading days.

An expandable version of the chart above (with additional technical data) is here.

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.

Peabody in the NEWS

Back in late August, the nascent BTU reversal was identified when an entry would have been low risk.

The chart speaks for itself.

If there’s only one chart that shows the benefit of reading the tape (not advice, not a recommendation) as presented on this site, The Danger Point, BTU is the case in point.

Effective tape reading requires at least 10,000 hours of training and/or experience.

The author presenting on this site, has over 23,000 hours at the tape. However, that experience does not equal perfection.

Experience equates to probability.

The longer one is in the markets, through booms, busts, flash crashes, manic and panic, the more one is able to operate as the masters of old and be separate from the crowd.

Now after BTU has decisively launched higher, everybody’s an expert. Two examples below:

No. 1

No. 2

We indeed, have a position in BTU.

However, instead of looking to buy with the rest of the herd, we’re looking for the exit.

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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.

What’s Not Happening?

Ask not what the market is doing; rather ask, what is the market not doing?

It’s about fifteen minutes before the open.  Biotech (IBB) was bid/ask as high as 137.01/137.44, in the pre-market session.

As we get nearer to the open, that high mark is being eroded to 136.73/137.11. 

What’s not happening, is the market has not bid significantly higher than yesterday’s close.

If demand was strong, price action would have no problem pushing past the resistance area at 136.00.

The chart shows we’re at the danger point.  We can see symmetry created by the trading range. 

It is ten points from here to the top (all time high). 

At the bottom of the range, it’s ten points down to the untested breakout, support level.

The Fed announcement is scheduled for 2:00 p.m. EST and trading may just tread water until that time.

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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.

Break & Test: Biotech

Getting out of a non-performing position allows the mind to clear.

What we see now, is a massive terminating wedge pattern for IBB. 

That wedge had a trend line break September 3rd, on decisive volume.

The break is now being tested.  This is typical market behavior. Expandable chart of IBB, is here

It’s about thirty minutes before the open and pre-market activity shows IBB trading higher. 

The IBB, 50% retrace level is approximately ~ 136.20

IBB tends to move counter-trend during the first two hours of trade. 

If the trend is down and the market’s just testing, the (continuation) reversal lower may come around 11:30 a.m. EST.

Inverse funds (not advice, not a recommendation) are BIS (2X-inverse) and LABD (3X-inverse).

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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.

CORN: Breakout Higher

The agricultural food supply, and delivery systems are being destroyed systematically.

The fundamental picture for corn at this juncture, should be well known. 

Weather events, whether manufactured or not, are taking out huge (silo) stockpiles in addition to destroying what’s still in the fields.

The August 20th, update highlighted a CORN trend-line.

Since then, CORN price action has morphed into a trading channel.

We’re now at the right side and in position to move higher. A channel failure at this point would be obvious.

If CORN does not continue upward from here, the channel has lost its effectiveness and/or, the market has some other objective.

Biotech IBB: Update

Anything can happen. Price action reversed above the 23.6%, retrace, hit the 38.2% retrace and kept going.

Our result was to exit the (IBB), short position during today’s session.

We’re past the 38% retrace level which leaves 50% and 61.8%; Trading action is to stand aside (not advice, not a recommendation) for now.

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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.