Monthly Archives: October 2023

Best Buy Breakdown

October 29, 2023 By in BBY, Great Depression, Great Depression 2.0, Greater Depression, LABD-23-11, Positions

Another ‘Depression’ Indicator

Best Buy’s breaking a trendline that’s been in effect since December 1991.

The weekly chart (below) has zoomed-in to the last 13-years or so, showing the magnitude of the breakdown.

While the financial press plies their trade, this just out as the latest effort to confuse whoever is still listening, anyone with two BBY gift-cards rubbing together feels in their gut, we’ve gone straight past ‘recession’ and into ‘depression‘ (not advice, not a recommendation).

The chart of BBY, itself, is telling us there’s been a (potential) massive change of direction.

Best Buy (BBY), Weekly Close

The lower dashed trend-line continues all the way back to December 1991.

The wedge ‘throw-over’ lasted an incredible Fibonacci 21-months, from July of 2020 to the ‘test’ in March of 2022.

Lower price action confirmed that reversal and now, we’re breaking down from the 32-year long formation.

Positioning

From a personal standpoint, I have no plans to short BBY at this time.

However, BBY price action can, and is being used as confirmation to remain short (of not stopped out) via the biotech trade LABD-23-11 (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

Pulling Away To-The-Downside

October 27, 2023 By in $SPSIBI, Biotech, LABD, LABD-23-11, Positions, SPBIO

Biotech Trading Channel

Breaking out after a month of congestion, biotech appears ready for a sustained move lower (not advice, not a recommendation).

As we’ll see below, price action’s been hugging the right-side channel line, posting congestion on the daily, for over eight weeks … until now.

Now, it’s pulling away to the downside.

Biotech SPBIO ($SPSIBI), Weekly

The ‘Week 1’, and ‘Week 13’, designations show the time between pivot-points; Fibonacci 13-weeks.

‘Normal’ market behavior is to come back and test the underside of congestion from the May – June, reversal of 2022 (green dashed line).

However, we all know at this point, it’s anything but normal in the markets or anywhere else.

Positioning

The short position in the sector, LABD-23-11, is active and has been documented here.

As a result of price action, the stop on LABD-23-11, is being moved up (from LABD 21.65) to the Leveraged Inverse Fund’s low of October 24th, LABD 25.66 (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

Fighting The ‘Collapse’

October 24, 2023 By in CVNA, DRI, Great Depression 2.0, Greater Depression, Jerimiah Babe, KMX 1 Comment

Run Up The Credit!

As Jerimiah Babe said yesterday:

“People are fighting this collapse, they are fighting this depression … They don’t want to give in.”

One way that ‘fighting’ appears to be showing up, is restaurant dining; a completely discretionary activity.

Unlike the bearish set-ups with CarMax (KMX) and Carvana (CVNA), at some point, people still need a car.

However, they don’t ‘need’ a restaurant.

Implosion Then, Collapse Now?

We can see the ‘discretionary’ result from the implosion of Darden Restaurants (DRI), during the melt-down of 2020.

Darden dropped from 124.01 to 26.15, that’s nearly – 79%, in just five weeks.

The stock recovered and went on to new highs … but recently, there’s been trouble in River City. 🙂

As we’ll see below, DRI looks to have started its initial leg down and is now in a retrace correction (not advice, not a recommendation).

Darden Restaurants DRI, Weekly

It was fourteen-weeks above resistance, before breaking lower, we’ll call that breakdown significant.

Underside resistance (if tested) could provide stiff opposition for any move higher.

Pressured Into The Holidays

It just so happens, DRI is scheduled to report earnings on December 15th.

Whether or not the ‘depression fighting’ consumers will have exhausted themselves by that time, is unknown.

However, we can state with some confidence, there’ll be pressure to keep up appearances (spending) until the very last minute.

By that time, price action in DRI may be testing the underside of resistance in the 155 – 160, area (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

Biotech … History Repeats

October 22, 2023 By in $SPSIBI, Biotech, LABD, LABD-23-10, LABD-23-11, Positions, SPBIO, Wyckoff 1 Comment

Unraveling, By-The-Day

Well, pretty much everything is unraveling, so in a sense biotech’s no different.

However, this sector (SPBIO, $SPSIBI), is the weakest of all the major indices (from 2020 – 2022, highs), down approx. 62%.

We’ll get to the ‘history repeats’ part farther down but first a reminder, this site’s about Strategy, Tactics, and Focus, i.e., Livermore, Wyckoff, and Loeb.

It looks like we’re already in a full-blown economic, societal (population) collapse, i.e., Strategy.

Biotech appears to be the weakest sector, i.e., Tactics.

The (shorting) action is on that sector exclusively, i.e., Focus.

Not advice, not a recommendation.

Biotech Leveraged Inverse LABD, 8-Day

Since the Fibonacci 8-Day chart was used for the update on gold, GLD, we’ll use it for this post.

All trendlines shown on the chart are exactly parallel.

The market itself has presented a tendency to trend at the rate shown in the ‘Trading Channel’.

It’s happened before; identified as ‘Repeating Trendline’.

Positioning

This series of short trades on SPBIO, opened via LABD, and identified as LABD-23-10, LABD-23-11, are fully documented here, here, here, here, here, here, here, here and here.

From a Wyckoff perspective, the market itself is telling us to ‘do nothing’, maintain the trade unless stopped out (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 … Decision Point

October 21, 2023 By in GLD, Gold & Silver, Wyckoff 1 Comment

Is This The Last Peak?

We’ve got a Quadrillion Dollar Derivative Bubble out there, just waiting to pop … if it hasn’t already.

So, riddle me this; just exactly how is that (likely) collapse going to be paid-off … with what?

Fiat currency?

The chart of gold GLD below, is on a Fibonacci 8-Day scale.

Who looks at an 8-Day chart?

Gold GLD, 8-Day

As of Friday’s close, we’re just below resistance (top blue line) which puts price action in Wyckoff Up-Thrust, (potential reversal) condition.

The chart also shows, over the past three-years, volume on each successive (major) upward 8-Day spike is declining.

The percentages shown, are the volume decline from the prior move higher.

From a Wyckoff analysis standpoint, volume equals commitment and/or energy.

Positioning

Anything can happen.

Looking at the last financial collapse back in ’08 – ’09, GLD declined about – 32%, (very near that ’33’, mark) before moving significantly higher.

If we get another financial meltdown (which we may be in already), is anyone prepared for GLD to drop – 50%, or more … let’s say, – 66%?

A decline of 66% from the all-time GLD high of 194.45 (posted, 8/6/20), puts GLD, at a potential low of 66.1 (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

Silver: Breakout or Test?

October 18, 2023 By in $SPSIBI, Biotech, GLD, Gold & Silver, LABD, LABD-23-11, Michael Cowan, Positions, SLV, SPBIO 2 Comments

Non-Confirmation

First off, before we get started, there’s this on ZeroHedge; Gold price out of control?

The short answer is ‘probably not’ and we’ll use the confirmation proxy Silver (SLV), as our example (not advice, not a recommendation).

The Silver Non-Confirmation

In a traditional ‘inflation’ scenario, silver and gold typically move in tandem.

We can see that’s the case during the last (major) inflation event back in the late ’70s and early ’80s.

Gold spiked right along with silver; Gold chart link here. Silver chart link here.

That Was Then

What we have now, is different. Something’s wrong.

Silver’s not confirming the price rise of gold; Silver vs. Gold, link here.

There’s a massive divergence between the two.

Silver (SLV) Weekly Close

The SLV weekly, shows we’ve broken down from a wedge, now testing the underside of resistance.

Silver more than gold, is tied directly to the economy; over half of all silver is used in production.

It seems, production is about to fall off a cliff.

Evidence can be seen in a corollary indicator, layoffs.

Mass Layoffs

As Michael Cowan shows (time stamp 1:30), layoffs are accelerating.

Let’s not forget, ShadowStats shows its own unemployment indicator, already at Depression Era levels.

Positioning

On this site, beginning in mid-September, short positions (via LABD) were opened in possibly, the weakest sector, biotech, SPBIO, $SPSIBI (not advice, not a recommendation).

The initial position was stopped out (gain around +21%), then re-established the same day (LABD-23-11) with an LABD entry of 21.69.

So far, with today’s action, LABD’s trading around 23.90; approximately + 10% from the entry.

In addition, we now have a new Hard Stop @ LABD 21.65, yesterday’s low (not advice, not a recommendation)

Chart updates are planned for the next post.

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 … Upside Breakout or Not

October 16, 2023 By in $SPSIBI, Biotech, LABD, LABD-23-11, Positions, SPBIO 1 Comment

At The Channel Line, Bullish Divergence

Looking at the tape, we’re at a confluence.

Today’s price action is near the right-side channel line and downside energy (RSI) has a bullish divergence as shown.

What happens at the next session may result in maintaining the trade (LABD-23-11) or getting stopped out (not advice, not a recommendation).

Recall, the overall trend is down and the bullish set-up shown below, can sometimes get overpowered to the downside.

Biotech SPBIO ($SPSIBI), Daily

The short position via LABD, has a tentative stop in the vicinity of LABD 22.01, but this is not a hard stop (yet).

Hard Stop is still set @ LABD 20.54 (not advice, not a recommendation).

Next Session

The ideal situation for the LABD-23-11, short, is a higher open for LABD, and a higher daily high.

If price action performs otherwise, it’s possible I will take a discretionary exit on the position and go to the sidelines (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

The Ball Corp., Breakdown

October 14, 2023 By in BALL, Great Depression 2.0, Greater Depression, Wyckoff

What Does It Mean?

So, what does the chart breakdown mean?

‘Buckle your seatbelt Dorothy, ’cause Kansas is going bye-bye’

Right along with the airlines, packaging and containers (like BALL), are down hard from their all-time highs, posted long ago.

As of Friday’s close, BALL is down a stiff – 57%, from its 2020 highs and we could be just getting started.

Do Not Pass ‘Go’

It’s the opinion of this author, we never had or are going to have, a ‘recession’.

We went straight past that, right into ‘depression.’

The monthly chart below, has a massive Head & Shoulders pattern that’s been years in the making.

Ball Corp. (BALL), Monthly

From a textbook standpoint, this is near perfection.

An obvious Left Shoulder, Head, and Right Shoulder.

The Neckline is sloping downward, indicating weakness.

The retrace from the October 2022 lows (not shown), has managed only Fibonacci 23.6%, providing confirmation of significant weakness.

The magenta arrow shows it’s been three months in-a-row (the ‘breakdown’) of lower action.

Penetration & Support

BALL, has penetrated prior lows posted during October 2022, and we’re currently at the neckline.

That means Wyckoff ‘spring’ position (penetrating the lows) and there’s a potential for some type of upward action; not much, but the possibility is there.

Positioning

BALL may present the opportunity for a direct short (borrowing, selling the actual stock), with good daily volume and dividend of only 1.8% (not advice, not a recommendation).

Note: A direct short puts the trader on the hook for paying the dividend and any other upward short covering ‘surprises’ … risky indeed.

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

‘Free-Fall’, For Biotech … Closer

October 12, 2023 By in $SPSIBI, Biotech, LABD-23-10, LABD-23-11, Positions, SPBIO, The List, ZeroHedge 2 Comments

Downside Pressure Builds

With this session’s price action continuing lower, getting back into the short trade (via LABD) was the correct move (not advice, not a recommendation).

With that said, we’re nearing the dangerous part.

Downside pressure continues to build.

As the chart shows, SPBIO ($SPSIBI) is close to the point where there’s no more support until much lower levels.

Biotech SPBIO ($SPSIBI), Daily

The Blue arrows highlight short entries (via LABD).

Short No. 1 was subsequently stopped out yesterday, then re-established (the same day) at the next arrow, No. 2.

If and when price action gets to the ‘free-fall’ area, anything can happen.

We could bounce off the support level, hover at it, or slice straight through.

Positioning

It’s obvious this sector’s in trouble. The fundamentals continue to build.

Just a few days after this post we have two more to add to ‘The List’, here and here.

Yesterday’s post showed a not-so-good entry that at this point in today’s session, has been ‘healed’ by price action.

We’re well above that (LABD 21.69) entry and solidly in the green (not advice, not a recommendation).

The stop on the LABD-23-11, position is now being moved (tentatively) higher at today’s low of, LABD 22.01.

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

Back In The Saddle … Biotech

October 11, 2023 By in $SPSIBI, Biotech, Dr. Elder, LABD, LABD-23-10, LABD-23-11, Positions, SPBIO 3 Comments

The ‘Perfection’ Mind-Trap

‘Once stopped out, the amateur will never re-enter the trade.’

That’s Dr. Alexander Elder, stating a typical psychological barrier for the new trader.

As if by design, as soon as the short trade LABD-23-10, was named, it was stopped out early this session.

About thirty minutes after the open, price action reversed its early session direction and re-confirmed the original bearish assessment of the sector.

Naming The Trade

From a personal standpoint, the psychological barrier of never getting back in a trade once stopped out, was addressed years ago.

It’s frustrating, but what’s worse, is watching one’s original premise turn into a ten-bagger and not being along for the ride.

With that said, the short in biotech has been re-established via LABD, at a far-from-perfect entry of 21.69, and a not-so good stop of 20.54 (not advice, not a recommendation)

We’ll name this one at the outset as LABD-23-11

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