Most important of all in trading, are the failed moves.
Failed moves offer the potential for low-risk entry.
What originally appeared to be a strong launch higher that may have taken SPBIO to a 50% retrace, failed at 38%.
The sector closed up for the day but far below its session high.
Biotech SPBIO, Daily
Price action closed well below the resistance area.
Zoom version below shows slight new daily high (mini-up-thrust) before retracing lower.
The technical details of what is going in will be covered over the weekend.
However, from a positioning standpoint, the short was re-established (via LABD) as it was obvious the move higher was failing (not advice, not a recommendation).
The new short position is labeled LABD-22-06, with an initial entry of LABD, 22.12.
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.
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’s what the ‘analyst’ at this link has to say.
If you know your market history, ‘opinions’ like that were pushed out all the way down to the bottom after the crash of 1929.
As for me, I’m going with the 78-year-old money manager that was quoted saying (paraphrasing):
‘It’s the biggest bear market of my life.’
Back to the analyst above, another opinion could be (looking at price action), we’re not in the ‘final stages’ of anything … except maybe the beginning.
Before we leave the topic, IYR real estate closed at 103.84, when the ‘old-timer’ spoke. Yesterday’s close was 81.43, down -22%, from that level and down – 30.3%, from all-time highs … and counting.
The ‘final stages’ of this decline is (potentially) years, if not decades away.
Biotech Decision Point
With about twenty-minutes before the open, biotech SPBIO, is set higher with leveraged inverse (pre-market) LABD, down approximately – 1.6-pts. (-6.3%).
We’re at a decision point for the sector.
Looking at the chart of inverse LABD below, a trend (and potential trading channel) is clear.
This morning’s gap-lower open is set to test that trend.
SPBIO, Leveraged Inverse LABD, Daily
If biotech remains in its downtrend that started at the August 11th, high of 7,399.86, expectations are for some kind of upside LABD, reversal within the first hour of trade.
If not, price action then opens the door for a move above established resistance at SPBIO, between 7,400 and 7,700.
As unbelievable as that would be, it could still happen.
Summary
The first hour of trade will be watched closely.
Price action itself will define if SPBIO, has fished its down move or if we’re just confirming the trend already established.
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.
Know what’s happening now; then plan for what’s likely to happen.
There could be only a small window of opportunity to acquire needed items (at a deep discount) to whether a sustained level of social, financial, and infrastructure chaos.
It’s no secret the clothing retailers are, and have been offering product at heavily reduced prices.
What about the really important stuff?
Stuff like tools, generators, chest freezers and ‘protection’.
Home Depot (HD) Weekly
We’ll get straight to the analysis; showing HD may be forming an H&S pattern, about to break below the neckline.
If HD breaks lower in the vicinity shown (may or may not happen), expectations are for a measured move to the area somewhere around $160-ish.
A drop like that represents a decline of about – 62%, from all-time highs; plenty of motivation for herd following ‘corporate executives’.
That would be the time and the location to expect those executives to throw in the towel and offer product (the good stuff) at a deep discount.
The ‘Experiment’
If there’s another market leg lower, it’s likely to be chaos.
Banks may restrict access; credit cards may not work, and nobody will want to part with actual physical cash; likely to be in short supply.
With that in mind, a product has been picked from a Home Deport nearby that would definitely be of use in a grid-down, social chaos situation.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The August 13th, update linked here, identified unprecedented volume posting on the short side.
It’s also interesting to note in the very same report, there’s a link to ‘bears capitulate’.
If there was actually some value to the financial press, this would be it; help provide contrary indicators.
So, here we are just over a month later and biotech SPBIO, appears to be in free fall.
Biotech SPBIO ($SPSIBI), Weekly Close
The prior update had this so say about positioning (not advice, not a recommendation):
“Figuratively speaking, everything’s been dropped to focus exclusively on this sector. It’s obvious, what’s going on at this juncture is unprecedented.”
From that August 13th update, the main account for my firm has increased the size of its short position (LABD-22-05), by approximately 34% (not advice, not a recommendation).
Summary
Unprecedented short-volume, points expectations to some kind of unprecedented bad news.
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.
No sooner had the bearish report on silver been released, than we have a bullish report on gold at ZeroHedge; linked here.
We’re going to address the bullish view briefly but succinctly, with the weekly chart of gold (GLD) below … but first.
When ‘Sentiment’ Works
One little trading nugget that took about 25-years to find out (your mileage may vary), was that in a sustained up or downtrend, sentiment is largely, irrelevant.
In the ZeroHedge report linked above, the ‘little guy’ (i.e. sentiment) is bearish or negative. We all know the little guy is nearly always wrong.
Not to worry.
If gold and silver move decidedly lower from here, our ‘little guy’ will think he’s a genius.
He’ll begin (or continue) to post all kinds of philosophical memes on twitter and Facebook; then set himself up for the big whammy farther down the road. 🙂
The pros will get their money no doubt; they’re patient.
Now, on to the weekly chart for gold (GLD).
Gold (GLD), Weekly Close
We’ve already discussed how penetrating support will put gold (GLD) in Wyckoff spring position.
It’s clear we are there now.
As it says in the chart, support penetration was preceded by a very weak bounce.
The difference between Wyckoff analysis and others is that Wyckoff focuses on what the market’s saying about itself.
At this juncture, price action to the upside (the bounce) is weak; suggesting that momentum remains to lower levels.
The following chart is a zoom of that bounce area.
Summary
This update’s several hours before the 2:00 p.m., EST, Fed announcement … likely to be a non-event, anyway.
Nonetheless, if there’s a significant change in price action, we’ll review it at that time.
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.
How can the bulls fail with all the ‘money printing’ and rampant fiscal irresponsibility?
It’s a sure thing … a slam dunk.
That is, until it’s not.
The day for silver and gold to start a sustained rally, was yesterday.
Yesterday, both GLD and SLV closed slightly higher and left the window open for a follow-on move upward.
It didn’t happen.
However, neither index has posted a new weekly low; that leaves an ever so miniscule chance, price action could mount a rally.
At this juncture, it’s still possible we’re in a move up to the SLV 19.50-area; that appears to be low probability based on the monthly chart of SLV, below.
Trading Vehicles
Other than owning the physical metal (discussed in the last post), the most common trading vehicles are Futures, ETFs and Leveraged ETFs.
Of those vehicles, futures contracts and especially the micro-contracts, are illiquid.
The futures market for silver is thin; that makes getting impaled by a low-liquidity spike a very real possibility.
For the purposes of trading an extended or sharp decline, the vehicles of choice (for my accounts) will be leveraged ETFs (AGQ, ZSL) and the physical.
Follow The Money
Depending on how you look at the monthly chart of SLV, price action’s either following a down-trend for the past seven months or has been in a trading channel for the past 17-months.
Zoom Chart
Summary & Strategy
It’s generally agreed, having some amount of precious metals is a good idea.
What’s being presented here and potentially on a go-forward basis, is strategy to position for windfall profits (or to acquire physical) during a mass-psychosis event; where it looks like (albeit temporally) precious metals and specifically silver may be of no value.
We’ve already seen over the past two years, how a wide swath of the public can be easily manipulated. Why not manipulate them to think they need (or will be forced) to dump precious metals?
Next Update
We’ll discuss how precious metals could be heading for a sustained or sharp decline, Fed announcement notwithstanding.
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® 