It’s your host’s engineering background that causes him to go looking for supporting data (or lack of) when presenting a contrary opinion or analysis.
Usually, that means sifting through randomly selected research or YouTube links on the subject; just to make sure the idea’s not being discussed by someone else.
This round’s sample of links is provided for reference below.
The proper sequence is: Sentiment, Volume, then Price. 🙂
The Potential Gold (GLD) Set-Up:
We’re calling the ‘coup d’état’, for lack of a better description.
The bullish hype is so bad and the me-too-ism on YouTube is so disgusting; being devoid of original thought (i.e., it’s a set-up), one has to be prepared for the opposite.
If GLD, manages to move higher to the 172 -175, area, it could be the final thrust before a wrenching sharp, or sustained decline.
The last time gold was discussed in detail was this post.
Gold (GLD) Analysis:
Daily chart (mid-session) of GLD, with the set-up target is below:
These charts are an example of what strategy is all about.
Price action after that post, seemed to negate the possibility and so the idea was tabled.
Now, with the GLD reversal off the lows in late September, we’re back on.
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.
It looked like biotech inverse fund LABD was going through a standard ‘test’ and then secondary ‘test’ (not as common).
Price action lulled participants to sleep; including this author.
Then , the shakedown.
The purpose is obvious; scare (nearly) everybody half-to-death and have them close out their positions.
It seemed to be working.
Early on, it looked like LABD was going to crater … with SPBIO launching higher accordingly.
Then, a funny thing happened.
LABD Block Trades:
As LABD price action was reaching its session lows, huge amounts of volume started to print on the tape.
Price action was not going down further and yet ‘block trades’ started to show up.
Strictly speaking, a block trade is anything over 10,000 shares.
However, I’m lumping in the 5,000 share trades and up, into the ‘block’.
There were plenty of those including one (buy) block for 13,000 @ 21.66; that’s equivalent to $281,580.
Stand Fast:
It’s days like today, understanding where one is in the market, is critical.
The initial work had been done long ago; that biotech (SPBIO) had printed three down quarters in a row.
The main long-term trend is down until price action says it’s not (not advice, not a recommendation).
LABD Analysis:
The un-marked daily of LABD is below:
Next, we move closer in and mark-up the 30-minute chart:
The large spike in volume is clear.
Volume in that bar’s 30-minutes was the highest since October 1st which was during a huge upward spike in LABD.
Positioning:
If LABD comes back down to the lows, it would indicate weakness and potential exit (not advice, not a recommendation).
At this juncture, the short biotech (SPBIO) via LABD, is being maintained (not advice, not a recommendation).
Last Thing:
Because LABD, price action has hit the 21.40 area three times and rebounded, … it could, … could head lower for a penetration and spring set-up.
Everybody and their dog (that’s left) has now put their stops at that level.
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.
Biotech SPBIO, is in the process of testing yesterday’s action.
The hourly chart of the inverse fund LABD, has price action in the process of competing a secondary test.
The take-away is unchanged.
Biotech (SPBIO) looks like it’s preparing for a directional move (not advice, not a recommendation).
Price action thus far (since the support penetration), is consistent with that potential.
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.
Art & Science: Interpreting price action requires both.
Since the September 2nd, high in biotech SPBIO and low for inverse LABD, the character of the market has changed.
Price action has become tight and orderly.
Typically, when that happens, someone (some entity) is gaining control. They are preparing the market for a directional move.
That’s the science part; the observation part.
Art is ephemeral. You don’t know if it matters to the subject at hand or not.
You won’t know until it becomes obvious.
In the markets, when it’s obvious, it’s too late.
News Of Note:
Within the past few days, there have been at least two news stories of note: Here and here.
It’s not really the stories themselves but what they represent.
Go to time stamp 8:10, at this link. That’s what it’s about.
The so-called controlling entities may be in the early stages of consuming each other.
What does that have to do the the markets and specifically biotech? Those thinking they were safe and getting fake ‘protection’ could be realizing, maybe they didn’t.
Maybe it was the real thing.
Mid Session:
SPBIO (Inverse, LABD):
The market’s had a change in character.
Whether or not the above links were the reason, just part of the reason or not at all, won’t be known until long after the market opportunity has passed.
We’ll start with the un-marked daily chart of leveraged inverse fund LABD:
Tight price action identified:
Now, it gets interesting.
We’ll zoom in on part of the tight area using the hourly chart:
LABD has oscillated around support and then penetrated that support as shown.
Price action rose dramatically from there. We’ll label it as a sign of demand (Wyckoff term).
Next, we have the testing action. David Weis used to call it “The Gut Check”.
Tests can either pass or fail. That currently puts LABD at the danger point.
Positioning:
My firm’s position remains unchanged: Short biotech via LABD (not advice, not a recommendation).
Summary:
As this post is being created, LABD is moving up off the test lows. So far, overall price action has been well behaved.
Thus far, there has been no major (news generating) price break.
That type of controlled movement allows large positions to be built carefully and quietly (not advice not a recommendation).
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.
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.
You don’t have to go more than 1:18, into this interview to get an inaccurate definition of inflation.
With that said, it does not keep the (delusional) bugs in the comment section from eating it up.
The interviewer, if he had the strength, could have stopped it right there and challenged with: ‘Inflation is defined as the expansion of credit that results in increased demand that in turn results in higher prices.’
At this point in time, we’re in credit destruction (i.e. Wells Fargo shutting down credit lines) not expansion … um, which is deflation not inflation.
At this point, it looks like there will be complete destruction first which brings us to the next bullet item.
No. 5
Only Problems. No Solutions
Personal Anecdote. Skip to No. 6, if not interested.
Back in the day as an Engineering Manager, there were times an employee (usually an engineer) would walk into my office and give me a list of problems on a particular project.
If this happened a second time, I would sort of gently (maybe) let them know, ‘If you bring me problems, you need to have solutions as well.’
I also let them know, if they were not able to come with solutions, I would map out a long-term action plan (basically starting documentation for termination) for their continued development.
How many YouTube sites talk endlessly about the problem?
It does not take much effort or thought or creativeness to tell us what we already know.
This site not only presents the problem(s), but also presents potential solution(s) or action(s).
Example:
Problem: Markets stretched to valuations beyond historical extremes. Traditional methods of analysis (P/E ratios, Book Value. etc.) no longer work. The market could ‘disconnect’ and be unavailable to trade for days or weeks at a time (think Klaus Schwab ‘cyber attack’).
Solution: (not advice, not a recommendation):
Identify a market and trading vehicle that has its own direction and is separated from the overall mass-hysteria. Position ‘in and out’, as required in that market until such time there are other opportunities of similar potential.
That market thus far, has been identified as biotech, SPBIO. The trading vehicle is LABD (not advice, not a recommendation).
Any disconnect or surprise event is already factored in as a likely positive for the position taken, i.e. being short biotech
We’re not only taking this approach for the current market environment but the supply chain as well.
The supply chain shut down and the potential famine that will ensue, is one of, if not the main reason(s) silver and gold may be of no use (at least temporarily) in the troubles to come.
Well, it would not be a compete ‘Notes’ update without mention of Scaboo.
Here he is at his new home … a few miles north of town.
As mentioned in the last update, the hen that gave him trouble at the outset, well, he’s got that all sorted out.
According to his new owners, he takes his job seriously.
He protects the hens and is meticulous about getting them into their coop at night. He then goes to his own coop; sort of a personal man-cave.
This picture was taken by the new owner.
You have to figure they must be pleased with him to wait long enough to capture such a majestic pose.
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.
Maybe, it turns out that some people don’t want to be in the spotlight after all.
Click on the link.
See if your jaw doesn’t drop with how casually the interview discusses things we (the serfs) should not know.
That interview (at least the ‘tweet’) is from February, this year. So, maybe this is old news to some.
Even so, it’s just one of the many bricks in the wall for biotech.
With that said, let’s take a look at our chief cook and bottle washer: SPBIO
SPBIO (and inverse, LABD) Analysis:
The last update said that we expected SPBIO, to decline and LABD, to rise from current levels.
That’s exactly what happened.
As usual, we’ll start with the unmarked chart:
Obviously, biotech’s not moving higher.
At Friday’s close, it’s down – 28.4%, from the all time highs posted February, this year.
Market Insight:
The ‘tweet’ in the link above, is dated February 9th, 2021.
The all time high for biotech SPBIO, was the very same day: February 9th, 2021.
Remember, there are no coincidences.
Let’s mark up the daily chart; showing that Friday was an outside-down (key reversal) day.
The right-most area of the chart has been zoomed-in.
Higher high, lower low and lower close:
The next chart is where it gets interesting.
We’ve included a Fibonacci projection; going from all time highs to lows in May and then counter-trend high on June 28th:
It’s clear the 23.6%, projection level has been an axis line.
SPBIO, price action has oscillated about this area for months.
With Thursday’s ‘a-b-c’ corrective move and Friday’s outside-down reversal, that axis oscillation may be complete.
If SPBIO is to head lower from this point (which is expected), we’ll watch to see if price action ‘respects’ the Fibonacci projections; that is, will price action head lower to 38%, then 50%, and on?
Positioning:
Friday was a good day to be short via LABD (not advice, not a recommendation).
Biotech, is nowhere near all time highs. The sector is essentially running neck-and-neck with GDX, to the downside.
The expectation’s for SPBIO to head lower in the coming week.
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.
First, this morning’s action in gold (GLD) tells us, it’s not a bull market.
The asylum escapees (gold bulls) from yesterday, might paint today’s action as a buying opportunity.
Well, it could be a buying opportunity for short term trades (not advice, not a recommendation) but that’s not what this site is about.
Bull markets do not let you get aboard comfortably.
Case in point:
For those old enough to remember, harken back to the bull market launch of 1995.
Remember that?
It seemed like every day was up into new highs with nary a retracement until a year and a half later.
No, there’s something else going on with gold.
It may indeed continue to move lower from here. However, there’s a price action feel that’s not right.
GLD:
Potential Coup D’état Set-Up ?
Those who own the gold market(s) know full well, there’s a bunch of rabid ‘collapse’ types who believe the metal’s their salvation ticket out of events to come.
Those in control, need to get as many as possible on the wrong side of the trade before there can be a sustained long-term (or fast and sharp) down move.
Such a move, if it goes low enough and fast enough, would likely take out the majority of the ‘stacking’ community.
Looking at the un-marked chart of gold (GLD), just where would that location be … where everyone, except the few, are positioned incorrectly?
As discussed previously, the area shown below would be a good location for an up-thrust (reversal) condition.
In addition, that location’s between the 38% and 50%, retrace level(s) from August 2020, to March 2021.
One can speculate on just what would cause or enable a last-gasp push higher above the GLD 171, level.
Well, for starters, how about a massive volcanic eruption that results in long-term destruction on both sides of the Atlantic.
As Dan (I Allegedly) says with his post just out, ‘the economy is in a perfect storm’.
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.
As is typical for this site, we’ll let the bulls duke it out with the bears. We’ll wait and see if we’re at a reversal point (trend-line) or if we’re headed to up-thrust condition.
If GLD breaks the trend-line, getting back to the 170 – 171, level (up-thrust), imagine the hysteria. 🙂
Lastly, Biotech (LABD):
First: Did we exit LABD?
Answer is No (not advice, not a recommendation)
Second: Why?
The price action thrusts below support that have been reported in prior posts were indeed spring set-ups.
However, it’s obvious now, they were not THE set-up.
The chart shows LABD has met an ‘a-b-c’ measured move target.
The idealized form of an ‘a-b-c’ corrective move, is shown with the blue lines and notations:
At this juncture, wave ‘a’ net distance traveled, is equal to ‘c’ and wave ‘b’ net distance, is about 50% the length of wave ‘a’.
These measurements are typical for ‘a-b-c’.
Positioning:
My firm’s main position is still showing a good profit and we’re going to maintain short biotech via LABD (not advice, not a recommendation).
However, as with GDX being at the danger point before its rally, so too is biotech at the danger point (prior to a potential decline).
Expectations are for LABD to retrace higher from current 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.
We’re using the leveraged inverse fund LABD, for our analysis (SPBIO down, LABD up).
Yesterday, closed with the 4-Hour chart above.
Annotating with Force Index numbers; each early session 4-Hour bar for the past two days, has been posted on decreasing downward thrust (last two magenta down-arrows).
In addition, the first four hours of the last session penetrated support and then retraced in the next four hours (last bar).
That sets up a spring condition as shown:
Taking Forever?
If this really is the crest of a major (overall market) reversal, we need to remind ourselves, it’s a massive juggernaut.
Said many times, we (my firm) are looking and working on the big move (not advice, not a recommendation).
By definition, it’s not a popular method.
Nothing seems to be happening … until it does. Then, it’s too late to position.
Pre-Market:
With about 17-minutes to go before the open, LABD is trading unchanged.
Obviously, the first four hours of trade will be important.
The market (LABD) could continue to grind lower … or we may be at the end of the counter-trend move; ready to reverse upward for LABD and down for SPBIO.
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 Danger Point® 