Monthly Archives: February 2022

Bears To Seize Control ?

February 27, 2022 By in Biotech, LABD, LABD-22-01, SOXS, SOXS-22-02, SOXX, SPBIO, ZeroHedge

World Chaos, Continues

The long-time reasoning behind this site’s ‘short only‘ trading plan, is becoming abundantly clear.

For years, there have been no ‘long’ trades on anything except leveraged inverse funds.

The premise? A ‘disconnect’ can happen at any time.

At this point, we’re getting to see those potential disconnects in real-time on a near continuous basis.

The past week bled-off the massive put leveraging; thus, setting the market up for (potential) downside reversal.

Getting Back To ‘Normal’

Those who bought the dip in Pavlovian fashion, may be thinking at some point, we’ll get back to ‘normal’.

News Flash:

What’s happening now, Is The Normal.

This is how it’s going to be on a go-forward basis.

Conflict, shortages, supply chaos, weather weaponry, nuclear saber rattling, bank runs are now, all normal.

With that, let’s look at last week’s markets and the set-up for the week ahead.

The SOXX, Rebounds

The last update discussed being short the semiconductors via inverse fund SOXS (not advice, not a recommendation).

The stop was hit, and that position (SOXS-22-02) has been closed out with a gain of about 6.2%.

Note how in the daily chart below, price action came right up to the stop level shown previously, then penetrated that level ever so slightly.

The ‘market’ knows where you are.

Being (stopped) out lets one look for a better opportunity.

Biotech (SPBIO), The Next Set-Up:

Turns out that biotech, SPBIO, may be at a low-risk juncture for a short via leveraged inverse fund LABD (not advice, not a recommendation).

Yesterday’s post highlighted some of the reasons for a biotech reversal.

The analysis below, builds on that reversal potential.

The weekly chart of SPBIO, has a channel and Fibonacci time correlation(s).

The next chart zooms-in on a possible target for a move lower.

Leveraged Inverse, LABD

Another reason to think SPBIO, is ready to continue downward, can be seen on the 4-Hour chart of LABD.

The prior report had daily range narrowing.

Getting closer into the action, we see the 4-Hour range narrowing as well.

In addition, down-thrust energy (Force Index) for Friday’s move appears to be exhausted.

Positioning

Early or late? If you’re trading professionally, that decision must be made ahead of time.

Some traders like to wait for ‘confirmation’ of a move and there’s nothing wrong with that.

For this author however, waiting for confirmation means I’m late. I’m behind the curve and ‘chasing’ the market.

With that said, LABD was entered towards the end of the session on Friday at 41.05 (not advice, not a recommendation).

We’ll find out soon enough, if Monday’s open will be in-the-green.

Summary:

Even as this post is being created, world news continues to pour in … this time, from North Korea.

Anything can happen in the coming week. The markets could somehow ‘shake-off’ all of the news and move higher.

However, probability suggests market continuation to the downside.

At this juncture, we’re about six hours before the Sunday futures open.

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.

The Danger Point®, trade mark: No. 6,505,279

Biotech … Ready To Reverse

February 26, 2022 By in Biotech, DXD, LABD, QID, SDS, SOXS, TZA 1 Comment

Highly leveraged (3X Inverse of SPBIO), LABD, looks ready for upside reversal.

The next chart shows trendline contacts.

Volume increased on Friday while the trading range narrowed significantly.

The next chart’s a little busy but zooms in on the volume and the daily range in question.

The overall markets have rebounded during the past two trading days.

Inverse funds have declined correspondingly.

Interestingly, LABD seems to have maintained its upward bias (down for SPBIO) better than other inverse funds like SDS, DXD, SOXS, QID and TZA.

Summary:

For downside action, one wants to look for the weakest sector.

Look for a new daily LABD high on Monday, (new low for SPBIO).

This is a typical entry signal with stops at the last session’s low; currently LABD, 40.08 (not advice not a recommendation).

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.

The Danger Point®, trade mark: No. 6,505,279

Gold, Plays Its Hand

February 24, 2022 By in Elliott Wave, Food Supply, GLD, Inflation 1 Comment

What’s Left To Drive It Higher ?

It all lined up for gold in the form of international tensions, military on the move, then outright invasion.

The ‘safe haven’ metal of course, launched higher.

It’s what happened next that’s the important part.

Steadfast on this site, is the premise, It’s not inflation … at least not the kind in the form of credit creation with persistent rising wages and prices.

The charts themselves show the retrace from the lows of March 8th, 2021, to now (today), is a counter trend move.

Unless today’s reversal bar is penetrated to the up-side, the main trend is either sideways or down.

Gold (GLD) Weekly:

Re-stating again, Elliott Wave is not used as the main analysis tool.

However, it can’t be denied that GLD, looks as if it just completed an ‘a-b-c’ correction with both ‘a’ and ‘c’ waves of equal length (vertical blue lines are equal).

It’s a near textbook example.

Adding to the potential reversal case is the up-thrust position as shown.

For the bearish assessment to change to bullish … this resistance area will need to be penetrated and successfully tested.

Anything can happen … so we’ll see what happens next.

Enter, The Famine

Here is a link that only requires the first 50-seconds of one’s time. The presenter is an offensive character to say the least.

However, this site searches out as many sources as possible; sifting through the trash to find kernels of truth is a necessary requirement.

With that said, restricting the food supply results in a compliant population.

That’s most likely the next area(s) of focus for our benevolent controlling oligarchs.

Summary:

This is gold’s chance for a continued breakout to the upside if it’s really a bull market.

If it fails and reverses, we know the main trend is down and potentially leading to some kind of deflationary impulse.

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.

The Danger Point®, trade mark: No. 6,505,279

Bleeding Down The Options

February 23, 2022 By in SOXS, SOXS-22-02, SOXX 1 Comment

Two Ways To Make ‘Put’s Worthless

The first way is of course, a rally to the upside.

That’s what market traders are expecting based on massive (retail) put option buying; the largest on record.

The other way, not talked about as much, is the boring way.

That is, the slow grind of time.

The massive positioning with puts can be ground down to nothing as well by the market going sideways or down but not down fast enough.

The semiconductor index the SOXX, has already pushed lower in a massive energy thrust (details here and here).

The instabilities from this action need to be worked off.

Prior analysis shows the most likely outcome, if yesterday’s highs are not breached, is a sustained move to the downside.

Let’s take a look at what the SOXX, is saying about itself.

SOXX, Daily Chart

We’re about ninety minutes after the open, with the following chart.

Marking up the chart, is a potential stop location for an open short position SOXS-22-02 (not advice, not a recommendation).

If SOXX penetrates that level to the upside, the market is either reversing higher or heading higher for more testing.

Either way, it’s not (for my firm) the place to be short.

The next chart shows a possible trading channel.

Price action can hug the right side of this channel and decline slowly enough to effectively neutralize the massive put positioning as linked above.

That scenario is not generally discussed. It’s not exciting and it does not get ‘clicks’.

Summary:

Today’s action will be important. A new daily high will close out the SOXS-22-02, short (not advice, not a recommendation).

A slight new low or and inside day, keeps the trade alive and results in one more day of put options bleed.

Everyone seems to be expecting a crash or a short-squeeze.

What’s not expected, the most frustrating for both sides … is neither.

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.

The Danger Point®, trade mark: No. 6,505,279

Gold Breakout, Will It Hold ?

February 22, 2022 By in Dollar, GLD, GOLD, UUP

Pushing Past Resistance

Measured Moves

Overlapping Price Action

Gold (GLD) has pushed past prior resistance and is now hovering at the 177.00 – 177.50 level.

International tensions are the usual excuse for the metal’s move but has it really done anything out of its recent norm?

This is a good time to see what the gold market is saying about itself.

Gold (GLD) Daily Chart

We’re going to use a somewhat compressed version of GLD. The reason for that will become apparent.

Starting with the un-marked daily chart below:

First is the obvious Wyckoff up-thrust (potential reversal) condition.

Price action has pushed past resistance and is now hovering at the 177.50, area … as if unsure what to do next.

GLD can come back and test on its way higher; it can come back, test and fail into a downside reversal.

The next chart is where it gets depressing for the bulls.

Price action in GLD, shows the current rally’s distance, is no different than it’s been for at least the past year.

We’ve highlighted the most recent move in blue and then moved that same line back to prior moves of nearly the exact same distance (magenta lines).

So, gold’s not doing anything out of the norm (so far) that it hasn’t done already.

Note how the entire twelve months shows price action as choppy and over-lapping.

This type of deep retracement action is characteristic of a countertrend move … that is, gold moving higher in choppy action is actually counter to its main trend … down.

Summary

With the dollar moving higher and the continued possibility of gold/dollar inverse correlation, somebody’s likely to reverse … soon.

The dollar’s been in a year-plus long upside reversal. The weight’s on the gold bulls to prove the dollar/gold inverse correlation is disconnecting.

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.

The Danger Point®, trade mark: No. 6,505,279

Intel … Off the Cliff

February 19, 2022 By in Elliott Wave, INTC, King James, NVDA, Prechter, Shakespeare, SOXS, SOXX, Stew Peters, The Speck, Wyckoff, ZeroHedge

Four-Year Top

Kick-Off … To The Downside

A massive four-year top, along with the latest ‘road-map‘, has this one going down; most likely, for good.

While other chip makers, have gone to near stratospheric levels such as Nvidia, with its 23,960% gain from 2009, lows, Intel has languished.

The rest of the markets, S&P, Dow, QQQs, have pushed on higher while INTC, has spent the last four years, in a trading range.

A sideways market is a bear market.

Intel never recovered its luster after the Dot-Com mania of the 2000s. Price action spent eight years heading sideways-to-down before bottoming out in early 2009.

After that, it’s been a long struggle to current levels.

Now, the markets have reversed and the economy’s collapsing. We’ve likely seen market highs that won’t be repeated in the lifetimes of anyone reading.

Friday’s announcement may be the kick-off for sustained price action to the downside.

INTC, Chart Analysis

The daily chart shows at least one breakaway gap and possibly two.

The next chart is on the weekly timeframe and identifies the long, multi-year, topping pattern.

When looking at these patterns, be reminded about the scale of what’s happening.

This wedge is massive … at least four years in the making.

Note: Price action finished the day right at the lower support. There could be a rebound on Tuesday (market’s closed Monday) or we could just keep going lower.

The SOXX Connection

Intel’s fifth in market cap of the SOXX, with Taiwan Semiconductor (TSM) at the top of the list.

Even the leader TSM, may not be immune to trouble.

Here are Fab locations for Taiwan Semi, located just off the coast of mainland China … nothing bad going to happen there, right?

And then, there’s this:

The SOXX, Drops

The SOXX, has been analyzed using Elliott Wave and Wyckoff.

Each method indicated potential for reversal.

In the case of the ‘wave’ analysis, if it proves correct, we’re possibly in for a sustained ride lower.

The daily chart of SOXX, shows each analysis point where a reversal lower was projected.

It’s clear from the chart and documented links, both methods nailed it … to the day.

Elliott was earliest and caught the exact point of inflection.

Wyckoff caught the test of the up-thrust.

Here’s the important part:

Wyckoff is a practical, bread and butter method. It looks at what the market’s saying about itself … is price action showing pressure to the upside or down?

Elliott Wave looks at where the market could be or is going.

If we’re really in an Elliott Wave Three down, it’s likely to be a decline like no other.

There are other indicators not market related, giving us hints, a massive collapse is ahead.

A Decline of ‘Biblical’ Proportions

Warning:

The following contains scriptural references.

Those who are in ‘it’s all a myth and fairy tales’ crowd, feel free to scroll to the ‘Summary‘.

For the rest of us, the secular world calls it ‘systems collapse’. The spiritual world calls it ‘judgement’.

Stated many times on this site, ‘the church’ is corrupt. Here’s just the latest salvo proving that point.

Along with the corruption, we now have the strong delusions prophesied over 2,000 years ago.

In reference to a Stew Peters broadcast, linked here, on the numerous media lies, is this comment (emphasis added):

“The only people to blame for this Stew are the ones who put on the mask, who distanced, who took the shot, who harassed other people and who advocated for my freedoms being taken away. Without doing five minutes of research.”

It’s not too much of a stretch to say, those who voluntarily injected themselves were (or are) in a place of delusion.

“And for this cause God shall send them strong delusion, that they should believe a lie:”

Also said many times, ‘The Speck’ as we call it, is a hoax. It’s a lie. It does not exist.

However, the injections are no lie … but the reasons for those injections are false.

Can this (spiritual assessment) really connect with what’s happening in the markets? How does it relate to actual price action?

Obviously, it can’t and shouldn’t be said that any specific price movement has been prophesied.

However, we can use the scriptural references to point us to the probability of events; the big picture, the situation at hand, the signs of the times.

The probability that we’re at some kind of major inflection point of Biblical proportions, seems exceedingly high.

Summary

Both Elliott Wave and Wyckoff Analysis, support the probability of lower prices ahead for the SOXX.

Because Intel (INTC) has been a laggard in the sector for years, suggests it may be one of the downside leaders.

As if to confirm the assessment we’re past the pivot, that generational highs have been reached, we have this just out, on ZeroHedge.

At the very bottom of the article, is a quote.

No, they’re not quoting from the King James Bible of 1611; they’re quoting from Shakespeare’s Richard III, of 1594.

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.

The Danger Point®, trade mark: No. 6,505,279

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Gold … Read Between The Lines

February 17, 2022 By in GDX, GDXJ, GLD, Gold Miners

Are Bulls, Really In Charge?

The usual suspects, ‘geopolitical tensions‘, are being trotted out as the reason for gold’s latest breakout move.

Junior Miners GDXJ, have pushed past the trendline highlighted in the last report, negating the ‘short-squeeze’ analysis … for now.

So, gold’s up, markets are down, and bonds are up … all in an apparent ‘flight to safety’.

To the casual observer, it might look like pandemonium.

Let’s step back and let the price action speak for itself. However, we’re going to approach it differently this time.

The charts below of GLD, show a trend-line study that’s unbiased … the lines are there. We’ll let them tell us what’s the next likely outcome.

Gold (GLD) Weekly Chart:

First, clean and un-marked

The objective is to look at this price action and see if there are relationships not immediately discernable.

How about this one:

Looks like there’s some type of ‘axis’ trend line.

Price action’s been oscillating around this line for about two years.

What about this one:

Let’s take that last trend line and see if there’s a trading channel of some type:

Ruh, Roh Scooby … looks like there might be trouble ahead for the rabid bulls; at least temporarily.

How about putting the first axis line back in and see what we have:

Zoom in on the ‘confluence’ area below.

Valid Or Not

The big question is, if these lines are ‘in effect’.

That is, we’ll have to watch subsequent price action to see if the market’s respecting these lines … enough to precipitate a reversal.

This week’s action in GLD, has pushed past established resistance from mid-November, last year.

Doing so, has put GLD in Up-Thrust (potential reversal) position.

Momentum indicators, MACD, monthly, weekly and daily, are pointing higher.

Summary:

We’re between resistance and momentum.

Opposing forces.

Let’s throw in, major indices had their all-time highs between November last year, and January, this year; excluding biotech IBB, which peaked way back in August.

Mining sectors GDX and GDXJ, are a whole other story … their all-time highs were long ago; back in 2010 – 2011.

At the close, GDX is near up-thrust and GDXJ, is already in up-thrust position. We’ll cover that in a subsequent update.

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.

The Danger Point®, trade mark: No. 6,505,279

SOXX, Ready To Drop

February 17, 2022 By in 2010 Flash Crash, Bonds, Elliott Wave, Flash Crash 2010, I Allegedly, Nissam Taleb, SOXS, SOXX, Taleb, Wyckoff, ZeroHedge 2 Comments

All The Good News Is Out

Liquidity Risk?

It’s been long enough; most have forgotten the ‘Flash Crash‘ of 2010.

That crash happened in May of that year.

May of this year, would make it 12-years and interestingly, a Fibonacci 144, months.

Normalcy Bias:

As Nissam Taleb said in his book, ‘The Black Swan’, every day is like every other day on the farm, for Mr. Turkey … that is, until Thanksgiving Day.

Let’s take a look at the historical chart of Semiconductor ETF SOXX, and see the effect of a Flash Crash.

Easy to spot … prices did recover by the end of the day.

What about the next time?

This report just out on ZeroHedge, shows liquidity is drying up in the bond market. Actually, liquidity has been drying up ever since Dodd-Frank of 2010.

All of this is working (to increase risk) in the background.

Let’s take a look at another unprecedented event … the downthrust and apparent recovery in the semiconductor index, SOXX.

SOXX, ETF, Daily Chart

First up, is the unmarked chart of the index.

Next, we’ll show the recovery higher is on diminishing volume.

There’s no real commitment to the higher prices …. they are just drifting upward.

We’ve already shown the Elliott Wave assessment of the current structure. Now, let’s look at it from a Wyckoff standpoint; Up-Thrust and Test.

Price action posted an Up-Thrust, declined and now has come back for an apparent test.

Confirmation Bias

At this juncture, both Elliott Wave and Wyckoff Analysis present a price action structure that’s set for downside reversal.

In a way, we’re at the danger point for both methods.

Summary

From a personal and corporate standpoint, going long in this market and all markets for that matter, was abandoned long ago (not advice, not a recommendation).

To borrow a phrase from Dan at i-Allegedly, he repeats over and over in his videos, ‘We’ve had warning, after warning’.

So, we have.

The SOXX, is telling us, it’s ready to resume action to the downside. After-hours, already has the index trading lower.

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.

The Danger Point®, trade mark: No. 6,505,279

p.s. The insight of 2010 Flash Crash, anniversary of Fibonacci 144 months in May of this year, is exclusive to this site.

Short-Squeeze, Junior Miners

February 16, 2022 By in GDX, GDXJ, GLD, Gold & Silver, Gold Miners, JDST 1 Comment

It’s Not Demand, It’s A Squeeze

GDXJ, Price Reversal Imminent ?

With gold sector pundits bloviating, the ever-present challenge is to cut through the bilge and see what price action’s actually doing.

Stepping away for a few days, then taking another look at the charts, has yielded some potential insight into what’s really going on.

Junior Miners, GDXJ:

The first chart shows GDXJ, in the top panel with Force Index, in the lower.

Note the Force/Volume spikes … after the demand is satisfied, price collapses … at least on the first spike; we can’t say for sure the outcome of current action.

Price spikes and volume that subsequently collapse; the textbook definition of a short-squeeze.

There’s no real bullish demand or price would launch into a bull run.

The second chart highlights the areas in question.

The last chart gives one more clue that price may reverse from current levels.

Not only do we have a potential squeeze, but we’re also contacting an established trend line.

It looks like the squeeze is over. Volume has dropped significantly and price is up against established (trend) resistance.

Gold Higher, Miners Lower

Discussed many times, it (almost) doesn’t matter what gold is doing. It can go higher and yet the miners go lower.

We won’t know exactly why until it’s all over; one possible explanation’s that corporate collapse is already baked into the cake of the major equities …

Summary:

Remember their tagline, “We’re all in this together”.

So they are.

All major corporations implementing self-destruct (sustainability) policies … all of them doing it, ‘together’.

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.

The Danger Point®, trade mark: No. 6,505,279

Herd Behavior … After The Top

February 12, 2022 By in Elliott Wave, GLD, Gold & Silver, Gold Miners, Positions, Prechter, SOXS-22-01, SOXX, ZeroHedge 3 Comments

Correction, Or Collapse

Structural Damage, SOXX

Even though technical conditions show we’re at least in a correction, if not outright reversal or collapse, record inflows for 2022, vs. 2021, present the herd-driven behavior of the public (and funds), to go long.

According to the link above, flows have been out of bonds and lesser performing equities, into equities that have gone down less.

In addition, you can see some of that flow (not addressed in the article) going into gold and the mining sector.

Stepping Back

Pulling away from charts and indicators for a moment, figuratively closing one’s eyes to get a ‘feel’ for what’s happening, it looks like the following:

We’re in a (potential) massive juggernaut reversal that’s been decades in the making; possibly having origins going all the way back to the ’87, crash, the ’95, bull market and then, repeated bubbles of 2000, ’07, and now.

At this point, it looks like the ‘average investor’ is doing the only thing they know how to do … that is, go long.

Those with at least some market knowledge, just got decisively whacked with their ‘put buying‘ strategy as the market has rallied strongly off the lows.

Pavlovian Panic

We’re witnessing the knee-jerk reactions of a public that’s been conditioned for decades, not to ‘think’, but only ‘do’.

Expect this type of behavior to go parabolic if the markets really do turn lower on a sustained, long-term basis.

Prechter has written extensively about crowds or the herd; especially in his text The Wave Principle of Human Social Behavior.

We can see this visceral behavior real-time, in other seemingly unrelated markets. Two examples below:

First, we had oil futures going negative for the first time in history; then we have LNG tanker rates going negative first time as well.

The model seems to be:

“Everybody wants it, and then, they don’t”.

The crowd runs to and fro, effectively leaderless.

With that said, one can make a case we’re just beginning, or already in an economic collapse; now being followed by the early stages of a market collapse.

Meanwhile, The Elephant Gets Bigger

Let’s not forget the massive elephant that’s just now getting so large, it can’t be ignored (time stamp 2:40).

Recall the example at this link … disparate crowds have a tendency to come to the same decision and modify behavior, all-at-once.

You have to wonder, when that crowd is going to simultaneously press the Sell, button.

Hit, In The SOXX

Unprecedented events are everywhere. That includes the massive, ‘never before seen‘, thrust lower in the SOXX.

The uptrend shown in the weekly chart of SOXX, has been decisively broken and with enormous volume.

The week ending Friday January 28th, saw 16.7-million shares traded … the most ever for the index (ETF).

More detail on trend break

Then, There’s Elliott Wave

Before the ‘Elliotticians’ get miffed by the previous (cookie cutter) comments, here’s this:

When this method works … it’s great.

It provides good projection areas and the useful ‘Fourth Wave of Lesser Degree’, targeting.

Note: A quick internet search for this Fourth Wave method (authored by Prechter) turns up nothing.

Logging onto ‘Club EWI‘, putting in ‘Fourth Wave’ has no items found.

One can try contacting Elliott Wave International, to request a copy of this targeting method. It may still be available (for a price).

The data used by this author to target the 4th wave retrace (shown below), is from a hard copy, dated, 1/8/2003. That information was excerpted from The Elliott Wave Theorist, July 9th, 2002.

First, the 2-Hour chart from Thursday’s update is repeated below with the ‘lesser degree’, added in magenta font:

Getting closer-in on the 4th-wave area below:

It’s subtle and difficult to spot. The price action congestion area is the ‘4th wave of lesser degree’.

Summary:

The previous update showed entry points for what is now SOXS-22-01 (not advice, not a recommendation).

Friday’s price action put this position well in the green; getting it to +24%, based on the close.

The table below are the ETFs being tracked along with the leveraged inverse fund tickers.

The percentage gain/loss, is for this past Friday’s action and shown for the inverse funds.

Obviously, the semiconductors were hit the hardest on Friday and so, SOXS, had the largest gain.

A good stop level for SOXS would naturally be Friday’s low (not advice not a recommendation). If we really are in an Elliott Wave 3, down … price action’s expected to continue its decline with haste.

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.

The Danger Point®, trade mark: No. 6,505,279