Monthly Archives: December 2022

The Panic of 2023

December 30, 2022 By in 1907, 2023, Boer War, DRV, dutchsinse, IYR, J.P. Morgan, Jerimiah Babe, Livermore, Neo Feudalism, Positions, Real Estate, South Africa 3 Comments

Parallels To, The Panic of 1907

Pick up almost any trading book like Reminiscences of a Stock Operator, and you’ll find, the big money was made on the downside.

In Livermore’s case from ‘Reminiscences’, he saw a big crash coming, went short in a big way, and was then squeezed out of his positions during market rallies in 1906.

The short trades were too early; he blew up his account.

Undaunted, he took drastic measures to raise capital (hawked his car), got back in, shorted, and cleared over $1-milllion in profits near the bottom on October 24th, 1907.

The Ukraine War & The Boer War

As spectacular as his profits were, for us that might not be the most important part.

Take a look at the list below, paraphrased from Livermore’s account of The Boer War and overall economic conditions; see if it doesn’t match up to today.

The British were just coming off the Boer war, having spent hundreds of billions (in today’s Pound-Sterling), and money was tight.

There was significant wealth destruction world-wide.

The San Fransico earthquake of 1906, was causing economic disruption and the need for even more cash.

Note: As reported here, seismic activity is picking up. We’ve just had a major quake (again) in California.

There were plenty of warnings of an impending collapse but as Livermore puts it, the masses paid no heed as they were more concerned with baseball.

Fabrication & Fact

There’s some scuttlebutt, The Panic of 1907, was a fabricated event, used to usher in fractional reserve banking.

Is this all starting to sound familiar?

Now, we have the potential of Neo Feudalism, going right along with Universal Basic Income and Digital Currency.

That should be enough intro to get us to the chart at hand, Real Estate IYR, but first, this just out, on MarketWatch:

Worst Year, Since 2008.

It’s already the worst since 2008, and as Jerimiah Babe puts it, ‘we haven’t even got started’.

Reference time stamp 12:07, in the link and see if it does not match exactly with Livermore’s observations.

All of which brings us to real estate.

Real Estate IYR Weekly, Close

The chart shows the most conservative (modestly declining) trading channel

The next chart, is where it gets scary.

The second (potential) channel is declining at approximately -62%, on an annualized basis.

Weekly timeframes are presented here on purpose.

Doing so, gets us away from the everyday, every blip, analysis and looks at things strategically. It’s obvious, barring some kind of intervention, real estate’s in trouble.

The January of No Effect

It’s well known, stocks tend to rise in the first weeks of January. Tax loss selling is over and there’s typically some type of ‘relief’.

Don’t count on it this time (not advice, not a recommendation).

Even as this post is being created, IYR, is pivoting lower and possibly confirming the more aggressive right-side trendline (second chart, above).

Summary

We’ll end with more paraphrase from Livermore’s account of the panic.

He describes being in Ed Harding’s office (his broker), telling him that ‘now is the time’, ‘today is the day’. All the while, stocks were drifting, everything was quiet.

Livermore said to Harding:

‘The longer that stocks delayed, the bigger the break will be when it comes.’

Let’s see if that applies to us, exactly 100-years later (Reminiscences, published in 1923).

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

Real Estate … Day ’21’

December 29, 2022 By in DRV, IYR, Real Estate, Wyckoff 2 Comments

Posts, Next Session

The next session will be a Fibonacci 21 days, from the IYR, intermediate high, printed on December 1st.

From that high, price action has declined, then bottomed, and is now in a retrace.

That retrace/test may have competed today with a weak attempt at new daily highs or we could see something more definitive tomorrow.

From a data release (i.e., ‘catalyst’) standpoint, the Chicago PMI, is scheduled for 9:45 a.m., EST.

Let’s go to the daily chart of IYR.

Real Estate IYR, Daily

The intermediate high is marked, and we see price action decline and now testing resistance underside.

If we go further down to the hourly chart … that’s where it gets interesting.

Real Estate IYR, Hourly

It’s clear we have a well-defined resistance that’s just below a 38.2%, retrace level.

Obviously, a push above this level and then reversal, is the definition of a Wyckoff ‘up-thrust’.

Summary

Fibonacci timeframes are somewhat approximate. If everybody’s waiting for it, it’s not likely to happen.

That’s why some Fibonacci reversal dates are either a day early or a day late … just to keep everyone guessing.

With that in mind, the test may have completed today, or it could tomorrow (Day 21), or the first trading day of 2023.

In an ideal scenario, we get a blip higher (above resistance) at the open tomorrow that’s quickly retraced (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

Trend & Channel

December 27, 2022 By in IWM, IYR, Nasdaq, NFLX, Positions, QID, QQQ, Russell 2000, S&P, S&P 500, SPY, TDA-QID-22-01, TZA, TZA-22-02, ZeroHedge 1 Comment

Get In … Get Out

There tends to be a period of consolidation and organized chaos, before price action enters and exhibits channel behavior.

Of course, the problem from a trading perspective, be able to wait through the chaos getting to the set-up and that’s no small feat.

Several of the major indices are in a channel right now. Those are (ETF symbol) SPY, QQQ, IYR and IWM.

We’ll discuss the Q’s farther down but first, this just out, on ZeroHedge, concerning the overall economic conditions.

That is, we’re already in full scale economic collapse and they have the data to prove it.

As incredible as it may be, there are still sectors of the population that believe, ‘the consumer is strong’.

A big wake-up call is coming for them. Oh wait, is that a telephone ringing off in the distance 🙂

The media lies appear to be crumbling at an exponential rate; there’s no guarantee it’ll all hold together into late January, or mid-February as presented only yesterday.

From a Nasdaq (QQQ), technology sector perspective, we have the following.

NASDAQ QQQ, Weekly

The Q’s began the week with a lower open and within the range of the prior week.

It’s a subtle clue the direction remains down and the market’s not volatile … just yet.

Next up, is the channel

It has the right ‘look’.

Moving in closer; the right-side trend line verification (hits).

There are no fewer than four weekly hits (including today) that verify the right side. The attempted push out of the channel is identified as the ‘Throw-Over’.

Attempted breakouts (and failures) are common market behaviors. We see that price action quickly got itself back into the channel.

Get In … Get Out

At this juncture, price action remains in the channel.

A short position (via QID, or equivalent) is a viable choice for the trader/speculator (not advice, not a recommendation).

For the reasons described above (the collapse), we appear to still be in the early stages of the down channel.

Obvious discretionary exit points for a short trade would be left side contact of the channel i.e., the ‘demand’ side or a decisive right-side breakout i.e., the ‘supply’ side (not advice, not a recommendation).

Summary

In a separate market, Netflix (NFLX), may have hit the right side of its own tend line as well.

It seems to be all happening very quietly.

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

Discretionary Destruction … 2023

December 26, 2022 By in Credit Destruction, Dollar, Jerimiah Babe, KMX, NFLX, TGT, UUP, ZeroHedge 1 Comment

The Cash Squeeze

During 2022, we’ve had one short squeeze after another.

For 2023, it could be forced liquidation in the relentless squeeze for cash.

One corporate example of the squeeze is the announcement from CarMax; they’ve suspended their stock buybacks.

This ‘buy-back halt’, theme, needs to be added to the market strategy for the coming year.

We can put that on the list right along with skipped dividends, power outages, market outages, internet cyber-attack and supply chain disruptions.

A comment below, posted in yesterday’s update from Jerrimiah Babe, opines the typical consumer’s going to carry on unabated, until the very last minute.

“I don’t believe most people will stop spending until all access to credit is exhausted. Whether it be cards, after-pay, family, theft most will continue to keep up appearances. I honestly think most could be 2 months behind on their mortgage or rent and still be spending on crap. There’s no financial responsibility or discipline anymore.”

How that may translate to the mainstream is, they continue to report ‘the consumer is strong’ until instantly, overnight, they’re not.

Possible timing for that event may be late January, or mid-February (not advice, not a recommendation).

With all that in mind, the last post identified Netflix and Target, as potential candidates for significant downside opportunity.

‘Significant’, meaning a 50% to 90% decline from current levels (not advice, not a recommendation).

Target TGT, Yearly

The year is just about over so let’s start with a very long-term view.

Two things have happened over the past three-years.

Price action has met a measured move out of the wedge as shown; then, a massive downward thrust.

It’s important to note, this year’s down-thrust, dwarfs the previous one during the -64.7%, decline of ’07 – ’09.

There’s a band of support that’s at least nine-years wide, in the vicinity of 50 – 75.

We’ll discuss that in another update.

Netflix NFLX, Yearly

Technically, Netflix is worse than target. That is, it has the potential to decline farther and faster.

NFLX, has support as well but comparatively minor in the area of 50.

It does not become significant until the wedge (blue lines) in the vicinity of 5 – 10.

With Netflix’s ‘product’ being completely discretionary, it’s ultimate downside potential, from a fundamental standpoint, surpasses that of Target.

Summary

Time permitting, shorter timeframes will be presented.

However, since the primary focus of this site, is first on ‘strategy’ (think dollar rally), we’re interested in the larger timeframes.

That in turn, provides background to drill down further for any trade decisions (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

Claus & Effect, The Next Wave

December 24, 2022 By in $SPSIBI, Biotech, Catherine Austin Fitts, CVNA, NFLX, SPBIO, Speck-Effect, TGT, The Speck, Useful Idiots, ZeroHedge 1 Comment

Unprecedented … Again

Nefarious forces operate in distraction and darkness.

“And this is the condemnation, that light is come into the world, and men loved darkness rather than light, because their deeds were evil.”

The year 2021, was the year everyone (except children) showed their true colors; they made their decision, knowingly or not, for darkness or light.

This year, 2022, is where the effects (or ‘side effects’) of that decision began to take hold.

Now, as 2023 approaches, we’re likely to move into the realm of unprecedented chaos and collapse.

As if on cue, under the cloak of this week’s holiday distraction, we have what’s possibly the next wave.

This could be the reason as presented in the last update, why biotech appears to be in the early stages of disconnecting from the overall market.

That separation may continue or not; price action is always the final arbiter.

The ‘Woke’ Go Broke

The useful idiots that comprise the ‘woke’ business crowd may be in for the biggest surprise in the coming year.

If there is one overriding theme to keep in mind for 2023, this could be it.

Separate enclaves are now forming of those who have not, will not, and are not going to go along with the ever more unbelievable narratives.

Here is a link to just one of those enclaves.

As a digression; in Texas, we’re just now coming out of yet another record-breaking cold spell.

That’s two, never before seen record breaking low temp events within the past three years!

How does that fit with the global warming narrative?

Anyone awake knows full well what’s going on … and it’s not global warming.

Who’s On First: NFLX or TGT?

Now that vending machine Carvana (CVNA), is out of the way, who’s next?

Partly as a result of economic decline and partly from the decision to take consumer spending elsewhere, Netflix and Target now appear ready to continue their implosion.

More on their technical chart conditions in the next 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

Biotech Disconnects & The Claus

December 23, 2022 By in $SPSIBI, Biotech, IWM, LABD, Positions, Russell 2000, SPBIO, Speck-Effect, The Speck, TZA, TZA-22-02, Vernon Coleman, Wyckoff, ZeroHedge 1 Comment

Naughty or Nice ?

Biotech price action’s disconnecting from the rest of the market.

Around the last Fed meeting, biotech separated from the major indices, heading the opposite direction, i.e., sideways to higher.

We’ll see that as we get into the snapshots of the hourly charts (below), but first several clues on why biotech (so far) isn’t going along.

The Next Plan Rolls Out

First up is this, just out on ZeroHedge.

It appears the next push is on … and the target is the kids. Another wave of ‘protection’ is certain to boost profits.

Note: Those commenting on ZH have been ‘awake’ from the start; an invaluable resource.

Next up is this, just out on BrandNewTube; another clear thinker that helps ‘tie it all together’.

Is this the explanation for biotech’s current behavior?

Strictly speaking and from a Wyckoff perspective, we won’t know the real reason for a move until it’s nearing the end.

What we can see, is that character of price action has changed (again).

With that, we’ll look at the 3X, leveraged inverse funds of two indices, Russell 2000 (TZA) and SPBIO (LABD).

TZA & LABD, Hourly

The disconnect has been a recent observation.

We’ll drill right down to the hourly and put the charts one on top of the other.

We can see that while inverse TZA, is now back up to the pre-squeeze high, inverse LABD, is far below that level.

That’s not to say things can’t change quickly.

For now, however, there may be something else going on that’s keeping the sector buoyant and suppressing the LABD, inverse fund.

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

Downside Kick-Off … and, Biotech

December 22, 2022 By in $SPSIBI, Biotech, Catherine Austin Fitts, Greg Hunter, IWM, LABD, LABD-22-14, Positions, Russell 2000, Stew Peters, TZA, TZA-22-02

Biotech, And The Next ‘Event’

Now, it all makes sense.

The solstice was yesterday.

Hard reversal in the market, today.

Then, there’s biotech; stubbornly refusing to break down.

First, Some Housekeeping

Before we go any further, from a housekeeping standpoint, all biotech short positions have been closed (not advice, not a recommendation).

Each apparent downside breakout attempt for the past three months, has been thwarted. There is something else going on.

Possible reasons for biotech’s resilience can be found here, and here and here.

Hint: There’s another planned ‘event’, on the way.

Now, back to the markets.

All major indices are sharply lower but for this update, we’ll focus on the Small Caps (Russell).

Russell 2000 IWM, Daily

Instead of starting with the big picture and longer timeframes, we’ll get straight into why today’s action may be significant.

Yesterday, price action attempted to ‘spring’ off the support boundary. Today, that spring has apparently failed.

Failed moves bring out the other side in force; in this case, the bears as it’s obvious the opposing side, the bulls, are exhausted.

It’s getting late in the session (2:50 p.m., EST) and the expectation is for a lower close.

If this really is the kick-off to the downside, then we’ll expect some kind of follow through at the next session.

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 … Repeating (Short) Set-Up

December 21, 2022 By in David Weis, GDX, GDXJ, GLD, GOLD, Gold & Silver, Gold Miners, JDST, Wyckoff, ZeroHedge

At The Extreme

Gold is at the extreme … again.

It’s also posting a repeating pattern; indicating a short set-up (not advice, not a recommendation).

As presented over a year ago, that set-up is defined as what’s called (in Wyckoff terms), a spring-to-up-thrust.

Meaning, price action has a repeating tendency to go from one trade set-up to another.

We’ll go to the daily chart.

Gold GLD, Daily

The Changing of Hands, is included because as of yet, that (downside) reversal has not been decisively negated.

There’s no downside capitulation volume; indicating we’re on the other side (bullish side) of the current downtrend.

Now gold is at The Danger Point®. The ephemeral place where risk is least; price action can (easily) go either way.

So The Question Is, Which Way?

Here’s one perspective that’s reasonably balanced.

The theory is all about Central Banks … ok, if it works.

From a personal (trading) standpoint, the fundamental approach was abandoned years, if not decades ago.

Moving closer-in on the daily, we have the following.

Price action is struggling at resistance (upper blue line).

As stated in a prior update, if GLD, can’t hold and move above this level, it’s an indicator of potential serious trouble to the downside.

Of course, it goes without saying, the miners, GDX, GDXJ, are at similar danger points.

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 … The Five Stages of Reversal

December 18, 2022 By in GLD, Prechter, ZeroHedge

First, is Denial

We’re about to find out the truth of gold’s direction.

The last update showed a ‘blip’ above known resistance.

It’s been three trading days since then and gold (GLD), has yet to close above last Tuesday’s level.

Gold could head straight lower from here. However, the more likely outcome is a test of resistance.

The test, if it happens, may be the defining moment for gold on a go-forward basis.

Just to add some intrigue, we have yet another bullish forecast for gold.

How GLD, handles the test may let us know if it’s going to act just like the rest of the market. i.e., potentially head much lower.

Going back to the bullish article, it’s interesting the author references the Maginot Line.

In an odd ‘predictive programming‘ kind of way, referencing that support area in such a way, may actually put it into play.

That Was Then …

The Maginot Line was built (like most government projects), to handle a catastrophic event after the fact.

World War I had already happened. Whatever comes next (WWII), won’t be like what came before.

The same is true for the markets. It’s called the ‘rule of alternation’.

However, in the markets, anything can happen.

With that, let’s take a look at the most probable outcomes for gold.

Gold GLD, Daily

As of Friday’s close, GLD, is sitting right at the 38.2%, retrace from the ‘blip’ high posted on Tuesday, the 13th.

Getting all the way up to the resistance (blue line) would put GLD, at 61.8%, retrace.

Of course, powering through resistance changes the character of the action. If that happens, then maybe we really do have a bull market continuation.

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

Fake Data, Fake Market, Real Price

December 17, 2022 By in CVNA, Great Depression, Neil McCoy-Ward, NFLX, Wyckoff, ZeroHedge

‘Head Fake’ … 1-million Jobs

Within the mirage of fake data, one thing’s not fake, the price.

The latest revelation about fake data, comes at this link, telling us something we already knew; the jobs data is a complete mirage.

What must be over a year ago, Neil McCoy–Ward, presented a series whereby he reviewed several individual, personal diaries, from The Great Depression.

From that series, no-one (in the public) seemed to know the extent of unemployment until much later.

The numbers were ‘hidden’ back then, just like now; what a coincidence.

The search, and need for the ‘truth’, becomes more clear by the day. In the markets, truth is the price and price only.

Apparently driving it home, revelation that chief cook and (woke) bottle washer Netflix, drank the Kool-Aid and overestimated advertising demand.

The last update on NFLX, stated there may be a rally to test the breakdown. So far, it hasn’t happened.

Last Thursday’s – 8.6%, ‘air-pocket’, may have been the kick-off to much lower prices (not advice, not a recommendation).

Let’s take another look at the big picture on Netflix.

Netflix NFLX, Weekly

Very quickly we see the overall (impulsive) direction of the market is down.

In Wyckoff terms, there’s what he called ‘ease-of-movement’, to the downside.

Next, we have a possible Head & Shoulders, top.

If NFLX, reverses from here all the way down to the neckline (blue line), and if it breaks that line, then we target the 40-area; that’s a lot of ‘ifs’.

Moving in closer on the daily chart, is the following:

Netflix NFLX, Daily

The wedge breakdown is clear.

There was an attempt to rally, if you can call it that, on Friday. So far, no significant upside action.

The zoom area shows price action still below the lower wedge boundry.

Netflix is different from our other potential implosion, short candidate (which proved correct), Carvana, CVNA.

That difference, Carvana sold a product for which there was an actual need, i.e., transportation.

Summary

It’s been just over a year since the CVNA, ‘No P/E’, report.

Carvana’s a slow-motion train-wreck; down over -98%, as of Friday’s close.

Netflix?

Let’s see what happens next.

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