Monthly Archives: October 2022

After The Close …

October 31, 2022 By in $SPSIBI, Biotech, Bonds, GLD, LABD, LABD-22-09, Positions, TLT, TMF, TMF-22-01

Bonds, Gold, Biotech

Bonds:

Instead of upside follow-through, we had downside test and reversal.

Gold:

GLD, closes lower and is now down seven consecutive months … a record for the tracking ETF.

Biotech

Index SPBIO, has been attempting to move higher, with it posting into an up-thrust last week.

Today it couldn’t hold the upside; now looking like a nascent reversal.

Note: Position changes at the bottom of this update.

The test and reversal in bonds (TLT) is obvious and there’s no open position in GLD.

So, we’ll focus on biotech.

Biotech ($SPSIBI, SPBIO) Daily

The zoom area of the chart shows price action just can’t seem to get above resistance (blue line).

Successive attempts were made throughout today’s session to go higher, but it didn’t happen.

Getting in closer on the hourly chart, we see the apparent upside failure during the last hour of trading.

Biotech SPBIO, Hourly

There is no doubt where at The Danger Point®

Right about mid-session, a short position was opened via LABD (not advice, not a recommendation) as LABD-22-09.

Summary

Today’s expectation for bonds was a follow-through to the upside … it didn’t happen.

In response, the initial TMF-22-01, position was closed with the secondary remaining open (not advice, not a recommendation).

Meanwhile, biotech SPBIO, was having its own problems; that is, being in up-thrust condition and not being able to make a new daily high. i.e., The Danger Point®

Positions, Market Stance (courtesy only, not advice).

TMF-22-01:

Entry @ 6.705, 7.166, Stop @ 6.68

Partial Exit @ 7.053***

***, Indicates change

LABD-22-09***

Entry @ 19.88***, Stop @ 18.94***

Note: Positions may be increased, decreased, entered, or exited at any time.

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

The Market Set-Up … This Week

October 30, 2022 By in Bonds, David Weis, GLD, GOLD, IYR, Real Estate, Spring-to-Up-Thrust, TLT, TSLA, Wyckoff 3 Comments

What To Watch … Bonds, Gold, Real Estate, Tesla

Bonds:

Last Friday, the bond reversal posted a shallow retrace.

We’re looking for upside follow-through at the next session.

Gold:

If gold (GLD) closes below 154.67, on Monday, it will be seven consecutive down months.

Momentum has slowed to a potential inflection point.

Real Estate:

If bonds move higher, real estate may follow. We have potential targets and Fibonacci timeframes.

Tesla:

This update, said to watch if/when TLSA, broke below support.

It did just that during the following week but now, it’s hesitating.

As a result, we have a Wyckoff ‘spring’ set-up.

Now, on to the charts.

Long Bond TLT, 30-minute

We’re drilling down to the 30-minute.

The blue line is Fibonacci 23.6%. Price action (at this point) shows the beginning of a move higher from that level.

Moving decisively higher at the next session, puts the terminating wedge into play, shown here.

If we get a wedge breakout, then we have a measured move target in the vicinity of TLT, 115.00.

Gold (GLD) Weekly Chart

A close below 154.67, on Monday, would put GLD, at seven consecutive down months.

GLD, has never closed lower seven consecutive months; not since inception, on 11/18/04.

Gold remains in a down-channel that’s a Fibonacci 13-Weeks wide.

Last week’s move helped to re-confirm the channel.

That action is itself, a Fibonacci 34-Weeks from the ‘changing of hands‘ high, during week-ending, 3/11/22.

However, momentum of price action has slowed.

If there’s going to be a break to the upside, this would be the place; otherwise, watch for continued GLD downside.

Real Estate IYR, Weekly

If bonds continue their upside reversal with rates lower, we can expect real estate IYR, to have some type of ‘dead cat’ bounce.

If so, how long and how high.

An infinite number of scenarios are possible. However, the chart of IYR, shows what to expect for two of those possibilities.

Real Estate IYR, Weekly

The uptrend (blue line) has been decisively broken. What has not yet happened, is a ‘test’ of that break.

Shown are potential tests; Week 8 (from 10/14/22, lows), at Fibonacci 38%, and Week 13, at 50%.

Between ‘Week 8’ and ‘Week 13’, is the December Fed meeting … a possible catalyst.

Tesla (TSLA) Weekly

This one seems a bit far-fetched but here it is, anyway.

If bonds rally, the rest of the market may also rally; that could include our chief cook and bottle washer, Tesla.

Price action bounced at support and penetrated it several times before printing outside-up on the weekly (twice).

By definition, it’s a Wyckoff spring set-up.

A spring tends to go straight into an up-thrust; a repeating pattern, shown on the chart at around TSLA, 315.

Set-ups can also fail … so, we’ll be watching this one closely.

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

Bond Reversal Targets

October 29, 2022 By in Bonds, IYR, Positions, Real Estate, TLT, TMF, TMF-22-01, ZeroHedge 1 Comment

Trade or Strategic

It’s either a short-term trade or a strategic reversal.

On the strategic reversal side is this just out from ZeroHedge.

‘Inflation’ may have peaked; where have we heard that before.

However, the charts presented in that link, do show we’re at an extreme.

If we look at the TLT, price action itself, which is impulsive down, we’ll go with the short-term first (not advice, not a recommendation).

With that, Friday may have been the ‘test’ from our capitulation model.

The weekly chart of bonds TLT, shows the anticipated up-tick in MACD, as well as the measured move target from the terminating wedge.

Long Bond, TLT, Weekly

Note, the wedge has not (yet) broken to the upside … we’re still at The Danger Point®, where the trade could fail.

If we look at the daily chart, probabilities point higher.

Long Bond, TLT, Daily

If this past Friday was the ‘test’ of the move, the retrace was a very weak Fibonacci 23.6%.

A new daily high in the next session(s), will help to confirm we’re headed higher.

Positions, Market Stance (courtesy only, not advice).

TMF-22-01:

Entry @ 6.705, 7.166***, Stop @ 6.68

***, Indicates change

Note: Positions may be increased, decreased, entered, or exited at any time.

Summary

If bonds continue to move higher, with rates heading lower, what’s going to happen to real estate, IYR ?

The wheels of the real estate crash have already been set in motion. If bonds rise, rates fall and IYR moves higher, there are specific targets to watch for short opportunities.

We’ll discuss those targets and more, in the next ‘The Market Set-Up … This Week’

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

The Capitulation ‘Model’

October 26, 2022 By in Bonds, GLD, Gold & Silver, Positions, Real Estate, TLT, TMF, TMF-22-01, Van Metre 1 Comment

Using The Gold Market Example

First up is the (downside reversal) analysis of the real estate market.

It was wrong; at least for now.

There’s nothing wrong with being wrong … it’s being wrong and staying wrong, that’s the problem.

What appears to be correct so far, is the upside reversal in the bond market.

We’re going to look at another capitulation to get some idea of what to expect if indeed bonds have reversed.

This past April, the gold market (GLD) capitulated on the upside. At the time, it was quickly and correctly identified as a ‘changing of hands’.

Gold (GLD) Capitulation

From a strategic standpoint, gold has not looked back.

Down around 20% (although slightly higher in today’s pre-market), there seems to be no major catalyst to get a similar capitulation reversal.

Using that reversal model and looking at bonds, we’ll use the 3X Leveraged Fund TMF, as the example.

Leveraged funds accentuate market moves, sometimes giving a clearer picture.

Bonds (TLT) 3X Leveraged Bull Fund, TMF

As far as what might be behind a (sustainable) bond reversal, we have this report from Steven Van Metre.

Using The ‘Model’

Note in the GLD reversal, prices went lower for a while and then came back to ‘test’.

Using that, we can expect TLT, TMF, price action to rise for some (unknown) period of time; then come back to ‘test’, before continuing higher (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

Bond Reversal

October 25, 2022 By in Bonds, Positions, TLT, TMF, TMF-22-01, Van Metre, Wyckoff

‘The Market Is A Tyrant’ … Wyckoff, 1910

This update, posted over the weekend, showed potential bond capitulation, set-up for reversal.

Wyckoff’s admonition (above quote) from his book Studies In Tape Reading, meant, the market dictates our actions.

Our job is to do what the market is telling us.

If we look at charts of TLT, and leveraged fund TMF, at this point (11:30 a.m., EST), it’s an obvious reversal.

Bonds TLT, Daily

We won’t know for sure if it’s an island gap, until the following sessions.

One indicator of potential (sustained) reversal is the leveraged bond fund TMF.

If we compress the daily chart, capitulation volume is clear.

Last Friday’s volume (29.1-million shares) was the highest by far, since the fund started in mid-April of 2009.

Bonds 3X Leveraged Bull, TMF, Daily

Trade or not?

It’s the trader’s discretion; with it being hard to imagine who wants U.S. Bonds.

However, as Steven Van Metre presents in this update, (time stamp, 3:30), foreign investors are interested.

With that, a long position has been opened at TMF 6.705 (TMF-22-01), with a stop in the vicinity of TMF 6.30.

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

Early Session Update

October 25, 2022 By in Bonds, DRV, DRV-22-05, IYR, Positions, TLT, TMF, TMF-22-01 1 Comment

The Market Is Always Right

If the market says no, the answer is no.

As of 9:55 a.m., EST that’s what it’s saying with the real estate short via DRV (DRV-22-05).

Today’s early rally stops out the position (not advice, not a recommendation), and the trade is closed.

Loss was approximately – 4.87%.

Not good but manageable.

On the flip side is the bond market.

Looks like we have the ‘island gap’ reversal discussed in prior updates.

A trade has been opened in leveraged bond fund TMF as TMF-22-01 (not advice, not a recommendation).

Charts to follow

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

‘

After The Close …

October 24, 2022 By in David Weis, DRV, DRV-22-05, IYR, Positions, Real Estate, Wyckoff

Inflection Point

This time, it’s the volume that’s important.

Most of the major indices finished higher today except for the miners, real estate and biotech.

The early session update said IYR, price action may be in a test of its up-thrust (reversal) from October 18th.

If that’s a valid assessment and it was a test, the volume is important.

Whether it’s an up-thrust or a spring, when the set-up gets tested, the volume gives additional clues.

What we’re looking for is when price action comes back to test, volume contracts.

If that happens, it means (with good probability) there’s no commitment to sustain prices at the test level.

Real Estate IYR, Daily

The real estate situation may be about to get interesting.

Volume contraction is near-textbook.

This is one of the rare times, there’s a high probability expectation; that is, IYR price action resumes its downtrend (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

Early Session Update

October 24, 2022 By in Bonds, DRV, DRV-22-05, GLD, Positions, Real Estate, TLT, TMF 1 Comment

What’s Working … What’s Not

It’s early in the session at about 10:52 a.m., EST; the market itself is telling us where to look.

Gold (GLD) is heading lower as expected.

Bonds (TLT) did not island gap higher but are resuming their downtrend … very dangerous indeed.

Real estate opened gap higher (not expected) but then quickly reversed and is now trading lower.

This update will focus on real estate. That trade is still active (DRV-22-05), as explained below.

Real Estate IYR, Daily

The briefest explanation for today’s action, is that we’re in a test of the up-thrust posted by IYR on October 18th.

Tests can pass or fail.

The close of today will be important along with tomorrow’s action as well.

Even if today closes lower, the test can still fail at the next session (or later) if today’s high is exceeded.

With that said, IYR is now at The Danger Point®

The DRV-22-05, trade remains active.

However, if IYR looks as if it’s going to post a higher close, a failure of the up-thrust may be in the works.

Subsequent position action is at the discretion of the trader (not advice, not a recommendation).

As of this post, IYR is pressuring lower, currently trading down – 0.21-pts.

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

The Market Set-Up … This Week

October 23, 2022 By in Bonds, Catherine Austin Fitts, DRV, DRV-22-05, GLD, Gold & Silver, IYR, Positions, Real Estate, Scott Walters, SLV, The Speck, TLT, TMF, Wyckoff, ZeroHedge 2 Comments

What To Watch … Gold, Bonds, & Real Estate

First off, ‘Goldman‘ says melt-up.

Not to be outdone, we have this ‘me too’ melt-up article as well.

Let’s not forget, all the ‘Fed must do something’ rumors and feigned concern by its members.

If anyone really wants to know the big picture, the overall plan (a wide majority do not), this interview may be the best explanation to-date.

With all of that, we certainly could get some kind of rally in the coming week. We’ll let the price action speak for itself.

As a reminder, Wyckoff analysis does not concern itself with press releases, rumors or ‘fundamentals’; Wyckoff himself, determined based on price action alone, they have no material effect on market movement.

In his words, ‘other forces are at work’, and it’s those forces that interest us.

Gold & Silver

As said in this update, gold (GLD) was just ‘ticks’ away from posting a new monthly low. In fact, it got just 0.24-pts, from a new low before rebounding.

Of course, each time we get any kind of rally in the metals, there’s the usual hysteria. Even though for the past seven months and counting, those rallies occur at lower and lower levels … i.e., a bear market.

Shown below, it’s in a trading channel with price action at the right-side channel line.

Gold (GLD) Weekly

The chart below gets closer-in.

From left-most contact point on the channel to the initial contact on the right side is a Fibonacci 13-weeks.

Also note, the weekly high posted at the center line is a Fibonacci 5-weeks from the left-most contact.

Highly emotional markets tend to adhere to Fibonacci until either the emotion wears off or ‘everybody’ recognizes the structure.

Obviously, to keep the channel intact, a lower open (and lower action) at the next session is needed.

Silver (SLV) has already been discussed in this update and this one.

Bond (TLT) Capitulation ?

Was this past Friday the day?

Gap-down trading on huge volume.

Looking at the daily chart of TLT below, Friday’s level of (down) volume has occurred only three times in the past three years.

Each time, there was a near immediate rebound or in the case of March 2021, the rebound came several weeks later.

Bonds (TLT) Daily

Moving in closer, we see the possibility of an ‘island-gap’ at the next open.

What could drive capital into the bond market?

Well, how about a ‘shock’ or continued market melt-down (not advice, not a recommendation).

A quick check of the local newsfeed (as of 12:45 p.m., EST) shows nothing on the horizon other than usual nuclear attack threats, power outages, child mutilation protests, marauding bears and the disarmament of Canadians.

Nothing to see here …

Real Estate

There is no mistake, events in real estate are happening at the fastest pace in recorded history.

As Scott Walters put it, over 10-million people bought into the ‘work from home’ hype and got themselves instantly (nearly) upside down in their transaction.

Now, the layoffs start.

Real Estate IYR, 3-Day Close

Zoom-in, on the channel

As the last update said, we’ll know soon enough if there is more upside or if last Friday was it, and the downdraft continues.

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

Set-Up Details … Real Estate

October 22, 2022 By in 1929, DRV, DRV-22-05, Economic Ninja, GDX, IBB, IWM, IYR, Positions, QQQ, Real Estate, S&P, S&P 500, Scott Walters, SLV, SOXX, SPBIO, SPY, Wyckoff 1 Comment

At A ‘Confluence’

The last update, posted late in the session, said with the upward bias provided by the sizable Op-Ex event, we can look for the weakest (or one of the weakest) sectors.

The chart below summarizes yesterday’s action:

Friday 10/21/22, Single Day Gains

Gold miners GDX, is the outlier at the top and real estate IYR, the outlier at the bottom.

Before anybody gets excited about ‘hyperinflation’, just a reminder; silver SLV’s, action has retraced to a weak 38.2% (chart not shown), as it was forecasted to do from last week’s update:

“Silver (SLV) is currently at support levels; therefore, some upward action (staying below SLV: 18.5) is normal behavior.”

Price action is the final arbiter; we’ll see what happens next.

Back to real estate.

Professional Wisdom: ‘The Crash’

We’re going to use the experience and insight provided by Scott Walters concerning the potential for real estate; that is, we’re in a world-wide event the scale of which, no one alive (and possibly, ever) has seen before.

The Economic Ninja has just seconded that opinion (time stamp 3:45) with his quote:

“Right now, we are in the greatest collapse since The Great Depression; and I believe it will be as severe, if not worse, sharper, faster, than what people experienced in 1929”.

So, what would that ‘collapse’ look like on a chart of real estate, IYR?

Ah, yes. That’s the hard part.

To take useful wisdom like that above, and somehow map it into potential market behavior.

For that, we’re going to use the Quarterly chart of IYR.

Real Estate IYR, Quarterly

There are still two months and one week left to go in the 4th, Quarter.

We’re at a confluence of price action as we’ll cover in the Hourly chart farther down; first, what’s the potential?

Here is one artist’s rendition (not advice, not a recommendation).

That puts it into perspective.

We may know at the very next open, if we’re pivoting higher or continuing the decline.

Butterfly In The Amazon

Of course, the market’s not going to tell anyone its next move. We have to decipher that (read the tape) ourselves.

Sometimes, as Wyckoff said a century ago … ‘It’s as if the weight of a feather is all that’s needed, to push the market further or to reverse.’

So, let’s look at that feather (the butterfly) on the hourly chart.

Since we’re positioned short (DRV-22-05), the chart’s inverted to mimic leveraged inverse fund DRV.

Real Estate IYR, Hourly (Inverted)

The important part is we see a repeating pattern of trendlines.

Moving in closer, we have this. The blue arrow is ‘expected’ action based on the analysis up to this point (not advice, not a recommendation).

Moving even closer, the zoom shows IYR, finished the day in Wyckoff spring position; having pushed past minor support (resistance on non-inverted).

Summary

If IYR opens lower or gap-lower, we’ll have to wait and see if it posts a new daily low (below IYR ,77.24).

If that happens, we have some confirmation lower prices are ahead and can then set a definitive stop for DRV-22-05.

Obviously, a higher open (pushing past IYR 78.91), negates the trade.

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