Monthly Archives: January 2021

Film at 11:00

January 14, 2021 By in DRV, IYR

The clip below is the last 20-minutes of IYR going into the close. It’s less than a minute long, so the trade action has been sped up.

There are several important parts.

First, there’s a Fibonacci retrace tool being used that has top origins off the view of the chart.

The dashed line at the top of screen is the 38.2% retrace of the entire move over the past two months.

It’s clear IYR has tested and pulled back from this area.

Next we see to the far left price action topping around 83.75. Following that line to the right, in the middle of today’s session is a small triangular wedge that’s six-candles wide (approx: 90-minutes).

As the recording starts, price action has come back to that (83.75) area. It can either bounce off to the upside or break down.

A breakdown indicates support is weak; we may have seen the end of the counter-trend move discussed in the mid-day update.

As noted, price action broke through minor support and closed below. We’ll see what happens next.

For the day, IYR tested and pulled back from the 38.2% retrace area; suggesting it’s ready to continue subdividing lower.

TC2000 Charts courtesy of Worden Brothers, Inc. www.worden.com

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: Test & Reverse?

January 14, 2021 By in DRV, IYR 1 Comment

It’s just after 11:00 a.m. EST; typically the time markets end their counter-trend action and reverse.

Yesterday saw the firm’s exit of DRV positions in anticipation of higher action (lower in DRV). That’s what we’re getting now; except IYR is hitting and testing the underside of established resistance.

The DRV positions have been re-opened; not advice, not a recommendation.

If this test is going to hold and IYR reverses lower from here, look for price action to stall during the day or even now, just after 11:00a.m. EST.

Well traded inverse funds for IYR, are SRS (2X inverse) and DRV (3X inverse).

Recall that conditions are in place for a general market top and reversal; bonds, dollar have already reversed higher. Gold (inflation proxy) is continuing lower.

The entire setup along with the insane unemployment claims from this morning, suggest when the market heads lower, the move will stun even those who are ready on the short-side.

Charts by StockCharts

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.

Removing The Risk: Oil & Gas

January 14, 2021 By in Bonds, Dollar, DUG, XOP 2 Comments

The dollar and bonds have reversed.

Yesterday, oil futures posted a downward reversal bar. This morning’s (pre-market) session is lower again by about 1.00%.

Longer term perspective (above), Oil & Gas Sector, XOP is at resistance.

Shorter term, the daily (below) posted a measured move off the wedge formation.

There’s not ever ‘no risk’ in the markets … but there is ‘low risk’.

That’s where we are now with XOP. Risk is low the up-trend will continue unabated.

To get past long-term resistance, (if it’s going to do so), XOP may have to come back and retrace for fuel.

With unemployment claims just out at 965,000 does anyone really think the economy’s going to bounce back?

Back in the day during a real (not contrived) recession, it was bad when unemployment claims hit around 385,000. Those were the days.

One of the Inverse funds for XOP that’s fairly liquid (not advice, not a recommendation) is DUG.

Stay Tuned

Charts by StockCharts

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 Reversal

January 13, 2021 By in Dollar, DUG, XOP

If the dollar (UUP) keeps going, its trend-line’s rising at a stiff 65%, annualized.

Sectors like Oil & Gas, which have essentially been a ‘dollar-short’ theme are at risk of significant reversal.

That’s in addition to anecdotal data from Van Metre’s updates, the oil patch is awash with inventory.

XOP is a good proxy for the long side and DUG for going short (not advice, not a recommendation).

Charts by StockCharts

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.

Good Short, Bad Short

January 13, 2021 By in Bonds, Dollar, DRV, IYR, Positions, TSLA

Seems like Tesla (TSLA) is always in the news.

Now, we have ‘the big short’, as reported by The Money GPS, doubling down on a possible even bigger short.

Is TSLA a good short opportunity or just a high visibility gamble; or maybe at this point in our history, just another psy-op?

How many minions are flagellating themselves over TSLA, anyway?

From a trading standpoint, TLSA could reverse from here. It could also gap higher into a wedge throw-over. With the weekly MACD showing no signs of erosion, probabilities are about equal.

Bad Short

Now, let’s look at another chart:

Real estate, IYR is showing classic signs it’s about ready to roll over.

Its been struggling for months at the 85-86 area and just yesterday, posted a new weekly low.

Yesterday as well, bonds reversed to the upside. Pre-market activity points to a higher open … solidifying the reversal.

On top of that, the dollar shows a higher open having (downward) tested its up-trend at the last session.

The list can go on but we see the difference.

One is a gamble (or even a psy-op manipulation of followers) and the other is a trade with high probabilities.

Good Short

The table below has current positioning (not advice, not a recommendation):

Special Update: 9:52 a.m. EST. Price action in DRV pushed to stop level and has recovered quickly.

Position is being maintained (for now) with analysis to follow.

Update: 2:21 p.m. EST. IYR looks to be headed to a 38% retrace at approx 84.25, level. All DRV positions exited. Will look to re-enter shorts at higher level, price action depending.

Charts by StockCharts

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.

Ruh, Roh: Bond Reversal

January 12, 2021 By in Bonds, IYR, TLT, UUP

Now, it gets interesting.

Bonds sold short the most in history.

Then, today’s action is reversal with moderate volume.

On the dollar side, at first glance it looks like a terrible day.

Action was down 0.53%.

The reality is, UUP came down to test an up-trend line formed as part of its own reversal last Thursday.

Both dollar and bonds are in an upside reversal; the dollar looks slightly ahead by a few days.

Real estate (IYR) has rallied (sort-of) which may only be temporary; likely on the (false) belief lower bond yields are good for higher yielding sectors.

Not true when we still have (as Van Metre puts it), the ‘insolvency event’ yet to come; everyone going bankrupt all at the same time.

Anything can happen and the above analysis could fall apart tomorrow.

On the probability side, looks like we’ve seen the extremes in the major sectors; now ready for reversal pivots.

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: Sleepy & Quiet

January 12, 2021 By in DRV, IYR, Positions

At least that’s the way it looks right now.

Under the radar, the sector (IYR) may be getting ready for a dramatic break lower.

The chart above is the 3X inverse fund DRV (inverse of IYR).

The table shows entries over the past few days; not advice, not a recommendation. Currently, the firm has no other open positions.

Early in this morning’s session, IYR posted a new daily low with DRV conversely, posting a new daily high.

At this juncture (11:23 a.m. EST), we’re in a very tight range (both tickers, IYR, DRV) that’s oscillating in an attempt to determine the direction of least resistance.

From a weekly momentum standpoint, MACD has been positing lower for two weeks and is near a zero crossing.

With that, we’re favoring the downside for IYR and upside for DRV.

The market’s hovering at all time highs … effectively masking the fact, air is going out of IYR.

Charts by StockCharts

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

January 12, 2021 By in Corn 1 Comment

Tracking fund CORN, has broken out of its five-month channel.

Price action is coming back to test and in the process, may be forming an inflection point.

This just out from ADAPT2030, has the food shortages accelerating.

The uninformed mistake food price rises as inflation. It’s an availability problem.

As reported late December here, there’s historical precedent, food comes first … then gold and silver.

No matter. The gold bulls power on. Buying into the metal and its tracking funds only to be whacked again and again at the most inopportune times.

Two reputable sources of long-term food supply are here and here.

Stay Tuned

Charts by StockCharts

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 Up, Market Down?

January 11, 2021 By in Dollar, Positions, UUP

The dollar has been inversely correlated since March of last year.

A reversal was identified in this report which thus far, has proved correct.

Bonds are also showing higher in the pre-market, having met a measured move (wedge) target last week.

The UUP, weekly close has price action slowing its decline, stopping and then reversing. That’s where we are now.

Weekly MACD ticked up (slightly) last week and higher open this morning, would confirm the divergence.

Market sentiment readings as reported by J. Bravo (time stamp 1:00) are literally, off the charts.

On top of that, internet scuttlebutt over the weekend shows at this juncture, absolutely anything can happen.

Having a market stance (or position) that includes possibility of power outages, banks going off-line, internet disruptions and general overall chaos, would seem to be reasonable.

In line with that, entries were made in DRV last week as shown (not advice, not a recommendation):

Pre-market activity for IYR, points to a lower open, DRV higher.

Stay Tuned

Charts by StockCharts

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: Subdividing Lower

January 10, 2021 By in DRV, IYR, Real Estate, SRS

Lower highs, lower lows, real estate (IYR) is subdividing.

The weekly close (above) has upward thrusts getting shorter, stalling out, then reversing.

Note the massive volume; up over 234%, from the week prior.

Drilling down to the daily, price action rose slightly (last Friday) to close just under the axis line.

We’re still below the 23.6%, retrace as reported here.

Volume evaporated on the session; declining 60% from the day prior and indicating not much interest to the up-side.

This is the danger point where the risk is least. If price action continues higher from here, it’s possible IYR may attempt a new high.

Price action declining (more probable), indicates the pivot’s in place.

Right now, bonds are stretched; ready to reverse along with the dollar.

Those two markets may put the kibosh (big time) on risk assets if they short squeeze.

Recall that IYR did not follow the rest to new highs. For months, it’s been languishing, building congestion.

Stay Tuned.

Charts by StockCharts

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.