Intentional Distraction ?

Is the objective to create as many news stories (fake or not), along with incessant and contradicting market analysis with the objective: Shut down and distract even the most disciplined trading professional?

The market’s going up, it’s going to crash, it’s in a short squeeze, Goldman ‘says’, then ‘says not’ and on it goes.

If memory serves, the propaganda during the 2007 – 2008 meltdown, wasn’t nearly this bad. Of course, that was before the Smith-Mundt act was repealed … but I, digress.

There are even a few unfortunate dolts that don’t’ even know anything’s happening at all.

Take a look at Dan’s (i-Allegedly) latest video here.

He talks about the number of people contacting him to say ‘it’s not that bad’, or ‘real estate’s going much higher’, or ‘whatever’ as Dan likes to say.

He does present from the (ethical) sales professionals a recognition, real estate’s ‘finished’ for this go-round.

Even while we get reports like this one, where sentiment is so bad, a rally is imminent, the trading objective must be to remain focused on the data … price bars and volume.

That’s what we’re going to do as outlined below.

Real Estate IYR, Daily Chart

The un-marked chart.

Now, let’s get to the ‘force’ behind the rebound of the past four trading days.

The tiny blip circled, was all there was for upward energy from yesterday’s move.

Price action inched up just over 1%.

Looking at the situation from a trading channel standpoint, we see yesterday’s action got just outside the well-established trend lines.

So, we have a little ‘blip’ outside the trendline on minimal volume and force.

The news story linked above (repeated here) says a ‘short squeeze’ is imminent … at least for the tech stocks.

What about the rest of the market? Is real estate going to breakout as well?

That actual (IYR) data says, anything can happen; however, with such anemic upside performance, the expectation is for IYR, to resume its downward trend.

Positioning

It’s about forty-minutes before the open and we already have DRV, pre-market activity.

Because the (bid/ask) spreads are so wide in both IYR inverse funds SRS, and DRV, pre-market activity is rare.

Nonetheless, 3X inverse DRV, is trading higher at +0.79 points or +1.71%, indicating that IYR will have a lower open.

That means, the DRV low of yesterday (DRV 45.64) would make a good stop location for any positioning (not advice, not a recommendation).

Summary

Wyckoff analysis is independent of the news or the financials. He discovered as early as 1902, that prices are moving from a ‘force of their own’ having nothing to do with fundamentals.

The action itself will point to the next likely outcome.

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