This update proposed we’d get a penetration of support sometime around the upcoming Fed meeting on the 26th of this month.
However, today, TLT price action has moved lower, penetrated support and is resting just below those levels.
Long Bonds (TLT) Weekly
The Weekly chart shows price action hanging just below support levels (blue line).
TLT is at the danger point where risk of going long, is least (not advice, not a recommendation).
My firm has no interest in buying the debt of a bankrupt nation … any nation. So, we’ll stand aside on going long the TLT.
However, we can use this action as a proxy for the overall markets. That is, a strong TLT upside reversal may indicate downward acceleration in the major indices; S&P, Dow, QQQ and on.
Senior Miners, GDX
The daily chart of GDX has posted a new daily low.
This action helps to confirm that GDX remains in the downward trading channel, discussed here and is now continuing to move lower into that channel.
Positioning:
Remaining short GDX via DUST and increasing position size as the market allows (not advice, not a recommendaiton).
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.
That is, the strategies and research presented on this site are leading actual news events by about twelve months.
Example No. 1: The Dollar Rally
The dollar rally potential (when first recognized) was presented in this post over a year ago.
Since then, about 10 – 11 months later, ZeroHedge picked it up only after it had become a full-blown reversal.
The dollar has continued to rally and is currently (after breaking support), in Wyckoff ‘spring position’.
Example No. 2: The Food Supply & ‘Inflation’
One of the earliest posts discussing the intentional destruction of the food supply, is linked here.
From that update, we had:
“The entire U.S. agricultural food supply infrastructure is being systematically dismantled.”
Those statements looked hyperbolic at the time.
Obviously, at this point, it’s becoming common knowledge; at least for anyone that’s listening.
Example No. 3: The ‘Speck Effect’
In what may have seemed like a brutal rant, has now become fact.
This rendition of ‘The Night Before Christmas’, posted over a year ago, had no links to support the intuitive assessment of what was to come.
That post has now been updated with the facts.
Warning Note:
Obviously, not everyone injected, is a coward.
Children are rightly terrified. Let’s be realistic.
However, the idiot parents and enabling Doctors and Pharmacists are (eventually) likely, as Dr. Vernon Coleman puts it, to be arrested and tried/convicted for either murder or attempted murder.
Summary
There are other research examples like gold and the gold miners but the three above, cover the picture fairly well.
From the data presented, it’s apparent at least two things are happening simultaneously.
No. 1: Strategic Analysis
World, market, and local (within the U.S.) events are researched and analyzed for potential impact.
No. 2: Market (Wyckoff) Analysis
Those events from No.1, are then linked to market action if any. Potential opportunities are identified.
The Path Forward:
This update is a very brief description of the site’s go-forward objectives.
What’s here, is a long-term (documented) track record of situational awareness; coupled with reading price action which in turn, is used as a case for market positioning.
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.
Hovering right at support, the long bond (TLT) is threatening to break through to the downside.
The usual suspects are out (here and here) pontificating about how many rate hikes there’ll be this year or how the Fed’s ‘not doing enough’ to combat inflation.
By now, anybody with two basis-points rubbing together should know, the Fed’s not going to do anything for anyone except itself.
If you’re reading this and have not separated from the nonsense, predictive programming, and mass-psychosis that is the financial press, feel free to do so now.
Not that one has to ignore them altogether.
It’s ok to monitor what they’re doing but ‘ol Zig Ziglar probably stated it best when he said (paraphrasing):
‘I read the Bible and the newspaper every day. That way I know what both sides are up to’. 🙂
Incorporating that worldview into one’s analysis is a healthier, more sane approach than trusting government statistics or mainstream propaganda.
Of course, one also has to be able to strategize and read price action. That’s the hard part.
So, let’s take a look at what bonds (TLT) are doing; then come up with a potential reversal (to the upside) scenario.
Asset Confiscation
Wait !!!
Bonds up and rates down? How is that possible. Aren’t interest rates going up in 2022?
Well, it could happen.
However, there’re several behind the scenes agendas at work; not the least of which is asset confiscation of the middle-class: “You will own nothing”, right?
This confiscation scheme has been planned for so long, it’s even got a name: Neo Feudalism.
If market participants and ‘investors’ find themselves in yet another wipe-out, they’re going to flock to the supposed ‘safety’ of U.S. bonds (just like they did last time).
Couple that with a few potato-head executive orders saying the market’s too dangerous for the proletariat; only bonds can be purchased and voila!!!
Long Bonds, TLT
Will that scenario above, play out in 2022?
Of course, that’s unknown until it actually happens.
However, what we do have as shown in the weekly chart of TLT, is a potential bear trap setting up.
Price action finished this past week hovering just at support. The range narrowed and the volume declined slightly … in effect, validating that support.
We’ve got an FOMC meeting coming up with the usual suspects issuing a propaganda statement at 2:00 p.m., EST on the 26th.
What To Watch:
Between now and then, bond price action could re-write the entire script just as it did with the gold market set-up.
Back then, the original gold (GLD) breakout idea was tabled only to have it show up again a few weeks later.
Note: Gold (GLD) broke to the upside exactly at the (purple) circled area shown:
Time and location, identified in advance.
Of course, the markets are a fluid and fractal mechanism. We’re dealing with probabilities and strategy, not pure (one answer only) mathematics.
Anything can happen.
However, given all the above discussion, the chart of TLT shown, has a reasonable potential to trap the bears in a bullish reversal if it penetrates support.
What’s the most likely time for this to happen?
Well, that would be on or about 2:00 p.m., EST, January 26th (absolutely not advice, not a recommendation).
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 other ‘first lesson’; the short side can be (and usually is) more profitable and faster than, the long side.
Anybody’s whose paying attention at this point, knows that ‘something in the market’s going to pop’.
We, in the serfdom, don’t know what or where it is; just that there’s a sense of an event just off the horizon.
From a personal standpoint, to be holding (or maintaining) long during a market upset is the last place one wants to be (not advice, not a recommendation).
Which brings us to shorting the gold market and more specifically, the Senior Miners, GDX.
Senior Miners, GDX
The weekly chart of GDX shows where we are; the market just opened for the day.
It might not look like much is going on … that is, until we show the trading channel.
The right-side trend-line has been purposely shown as ‘dashed-line’ so that when we zoom-in below, we can clearly see GDX, is at the danger point.
This is the exact location where risk is least (not advice, not a recommendation). We’re right at the trendline.
At this point, price action’s still posting below last week’s GDX high of 32.03
GDX Leveraged Inverse, DUST
Looking at the inverse chart DUST, we’ve just posted a new daily low (new daily high for GDX) while at the same time being at Fibonacci Day 21, from the top of the December 15th reversal/correction.
We’ve already had the ‘first correction’ as shown the trade model below.
The ongoing test of that correction was unexpected but not out of the norm for price action behavior.
If the gold miners, GDX are to reverse and continue lower in their channel, today is a high probability day for that reversal (not advice, not a recommendation).
Let’s review the trade model (checklist) thus far:
The System:
The Set-Up
The ‘test’ or ‘gut-check’
The first ‘correction’
Continuation or Failure
Trend identification
Potential channel(s)
Exit process
Scale out
Full exit
Post trade evaluation
At this juncture, we’re right at No. 4, ‘Continuation or Failure.
A new daily low for GDX and corresponding new high for DUST, shifts probabilities to trade ‘continuation’.
If that happens, we’ll start looking for trendlines, if any.
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 gold market, the supposed ‘inflation’ safe haven, has already decided for itself.
That is, GLD ‘blips’ higher just 0.26%. Hardly a screaming bull market.
If the worst inflation in 39-years can’t drive the gold market higher, then we’re taking the contrary view.
We may have just seen the peak of whatever’s being termed inflation.
Demand on many if not all fronts (except, maybe food) looks ready to collapse. The consumer’s tapped out; about to be taxed out as well.
Taxed out of whatever is left of their property … even if it’s stolen property.
Buried in this mainstream article may actually be some truth. ‘Supply chain pressures are easing … shipping rates coming down’.
Of course, they won’t tell why it’s happening.
It’s a double whammy of the consumer being maxed-out and literally dropping out as well.
We’re calling the video in the link, The ‘Speck-Effect’.
Let’s move on and take a look at what the gold market has to say about inflation.
Gold (GLD) Daily Chart
Price action is nowhere near a bull move and remains below significant resistance.
In the expanded chart below, we can see GLD literally banging about below the resistance level.
First, a test. Then a secondary test and now, what looks like a third attempt.
Note, that each subsequent test is at a lower high (thus far).
Senior Miners (GDX)
Price action in the miners, GDX is similar to GLD.
GDX remains below significant resistance.
Each upward attempt appears to be terminating at lower and lower levels.
Newmont (NEM) and DUST-21-01
Price action in Newmont (NEM) continues to look as if the entire market is thinning-out.
If there are this many price-action attempts to throw off market participants whether bulls or bears, one gets the sense the ensuing move (if/when it comes), may be literally off the charts.
Maintaining short via DUST-21-01 (not advice, not a recommendation).
Summary
We’ve just had the worse ‘inflation’ news in 39 – 40 years, depending on the source. Yet, the precious metals markets go nowhere. Therefore:
The ‘inflation narrative’ is false.
Just another lie. Probably no surprise there.
If it was true, then all commodities, gold, silver, corn, grains, oil, coffee, every last one of them, would be in a screaming bull market.
Instead, we’ve got the grains moving higher while precious metals move lower.
It can be shown that gold is now inversely correlated to corn as seen, in this post (in case you missed it).
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.
In what seems to be a surreal exercise, waiting to see what’s going to happen next, Newmont (NEM), is posting Fibonacci counts in its nascent reversal (thus far).
The usual suspects are out on YouTube … touting the next bull move in gold and the miners.
However, the market itself is saying it’s not convinced.
This is another brief update to show Newmont has apparently reversed; posting Fibonacci counts on the initial downswing and what looks to be the upward test.
Newmont (NEM) Daily Chart With Fibonacci Count(s)
It’s up to the market itself to say today was the top of the reversal test … or something else is going on and we may indeed have the gold miners in the beginning stages of a bull move.
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 3-Day chart of GDX inverse fund DUST above, has the vertical range compressed to better show the support/resistance boundary.
The boundary is shown close-up in the version below:
Coming back to test a boundary as shown is normal market behavior … there’s nothing (yet) that would indicate the direction of ETF GDX is changing its main direction from down to up … with DUST moving correspondingly lower (not advice, not a recommendation).
However, we’re potentially at another danger point where price action can go either way.
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.
One of the qualities that define leadership is the ability to recognize shifts in power or (public) perception that may lead to a complete change of direction.
Once that’s done, the change or new thinking is crafted into an approach whose objective is to successfully navigate (for however long) what will eventually become a ‘no-brainer’ way of thinking or acting.
As the old way(s) disintegrate, those who refuse or are unable to recognize this change, are likely to start ‘acting out’ in bizarre fashion as they realize the old method doesn’t work anymore.
They’re not able to see the shift as they were never leaders (to begin with) in the previous construct.
In part, this is what Buffett (not an endorsement) may have meant when he said … ‘It’s only when the tide goes out, that you find out who’s been swimming naked.’
Well, the tide’s going out in a big way and the water is receding with ever more rapidity.
As said before, what’s happening right now, is a fantastic public service for those paying attention.
A more efficient way could not have been constructed to reveal who has the best chance to be left standing (and surviving) as, or if, we come out the other side.
‘Acting Out’
Two links are going to be provided but not the ones to the specific examples at hand. Clicking on the links below will enable one to follow the rabbit trail and perform their own investigation.
As the old way continues to self-immolate with what looks like increasing speed, a huge (leadership) void is opening.
Actually, that void was always there; posers were only posing, fooling the easily fooled.
Now, the jig is up.
The smart ones in this on-going collapse have already realized, probably a long time ago, ‘certifications’ and lots of letters after your name mean absolutely nothing when it all hits the fan.
They either are themselves, or are looking (and rightly so) for hardened leadership and/or experience.
Remember, these outfits are “certified” by the same (combined) entity that’s pumping out the false data.
Just sayin’ 🙂
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 may go down as the biggest strategic ‘stacking’ blunder ever:
The consumer’s maxed-out, food supply chain’s being systematically destroyed and now, gold’s set to down-draft nearly 20% … just for starters.
For those still thinking it’s all about inflation, how about this personal anecdote (skip to Analysis, Gold (GLD), if not interested).
Anecdote:
A recent trip to the local Ford dealer to obtain an engine part, specifically, a “Camshaft Synchronizer”, i.e., what used to be called a ‘distributor’, a very common part, resulted in this conversation.
Ford: ‘Ok, part number F8DZ-12A362-AA.
Don’t have it. It’s on back-order. We’ve got an order for 347 units, with no ETA‘.
This part’s used on V-6 production engines going back decades. It happens to be a weak point in the design. When it goes out, the engine quits.
With literally millions of these engines on the road, how can there be no repair parts available?
None of the retail dealers in town had one either; not AutoZone, not O’Reilly’s, nobody.
Another Ford dealer located 50-miles away, had one unit and so the order was able to be filled.
If your car/truck is dead-in-the-water, how much would you be willing to pay to get it back on the road?
Imagine if there’s some gearhead Bubba out there who’s stockpiled a thousand of these things … how much could he charge for them?
Now, that’s what I call ‘Stacking’. 🙂
Controlled demolition of the supply chain: Not inflation.
Which brings us back to gold (GLD).
Analysis, Gold (GLD)
Weekly chart of GLD below and then inverted.
Inverted with projection.
Old Time Projection Method: The P&F Chart
Since it was Wyckoff analysis that helped us plan and spot the gold reversal, we’ll use a method equally as old to project where GLD could go (not advice, not a recommendation).
The P&F Chart.
Using the two methods above, we’ve got a combined projection in the range from GLD: 119 – 140; a decline in the vicinity of: -16.50%, to -28.96%
Is anyone even remotely prepared for this?
Important Caveat
There’s been no wedge breakout … yet. So, the projection’s a little ahead of itself.
What we do have, is a miner’s market that doesn’t look like it’s waiting around for gold.
For the miners, other factors could be coming into play; not the least of which is massive corporate stupidity.
If your management’s focused on solving problems that aren’t even real … how can they ever hope to run a complicated and dangerous mining business?
Gold Steady, Miners Down
Yet another scenario, is that gold could remain steady or even rise and yet the miner’s collapse.
How can that be?
Let’s remember where a good chunk of gold is being produced: Australia and Canada.
We’re not going to get into what’s going on in these two countries except to say, they’re not exactly outfitting themselves for continued sucess: quite the opposite.
How long will it be before we hear about mines being shut down as a result of staffing shortages.
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 you can’t draw your trade system on one side of a paper napkin, it’s too complicated.
Just to be clear, ‘simple’, does not mean ‘easy’.
What’s presented on this site and essentially in real time, is a particular method of approaching and trading the market (not advice, not a recommendation) using a culmination of research and education (i.e. losses) that span the course of over thirty years …’thirty-five’, to be exact. 🙂
That culmination has resulted in the following ‘system’.
Being from the engineering field, it’s probably no accident that system takes the form of a ‘checklist’.
However, make no mistake. The checklist is about as far as engineering can go. The rest (reading price action) is mostly art and intuition.
The System:
The Set-Up
The ‘test’ or ‘gut-check’
The first ‘correction’
Continuation or Failure
Trend identification
Potential channel(s)
Exit process
Scale out
Full exit
Post trade evaluation
Let’s take a look at how that system’s applied to the current (open) trade: DUST-21-01.
Since we’re short the Senior Miners GDX (not advice, not a recommendation), we’re going to use the daily chart but invert it (to approximate DUST) as shown below:
Marking up the chart with the above ‘checklist’ reveals the following:
As this post is being created, GDX is collapsing through support levels while DUST screams higher.
In the past two days, unless price action was monitored minute by minute, there was no time to get aboard comfortably (i.e., with low risk).
This plays directly into “Turkey’s” admonition a century ago about ‘not losing your position’.
The First Correction: Complete
With that under our belts, it’s time to get to work identifying trendlines, channels or potential traps for either the bulls or bears.
As a starting point, the daily chart of GDX is compressed and marked up with past trendlines and a potential line (magenta).
Looking closer
This series of trendlines is rising (using inverse fund DUST) at approximately +725%, annualized.
We can also see from the zoom area; price action can go sideways for some time before contacting the trend to either verify or negate.
Using DUST as the proxy, that sideways action can be as long as fifteen trading days. Just long enough to discourage the late comers; bulls and bears alike.
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® 