Monthly Archives: January 2024

Biotech “Bottled Air”

January 31, 2024 By in $SPSIBI, Biotech, DHI, Federal Reserve, LABD, SPBIO, Uneducated Economist, XBI

Nothing (or not much) Holding It Up

We’re still a few hours away from the Fed announcement and it’s already high anxiety in the market.

D.R., Horton (DHI) has retraced about 38% of its move and is testing the underside of breakdown resistance.

Over on the ‘Little, or no P/E’ side of the market, biotech XBI is coiling, building (downside) potential in its own on-going reversal.

Biotech XBI, Daily

The last update on biotech XBI (link here), said to watch for a false breakout.

The chart shows the result. The breakout did not last; we’re congesting just below resistance (blue line).

The latest post from Uneducated Economist talks about the potential for lower rates, i.e., probabilities are low.

Incorporating that possibility into the above analysis, it suggests the XBI move from last November to the end of December, is essentially built on “bottled air” (not advice, not a recommendation).

The retail side of the market appears to be positioned long, expecting lower rates.

What happens if that does not happen?

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.

Potential Short: D.R. Horton

January 27, 2024 By in DHI, Federal Reserve, Interest Rates, Real Estate, ZeroHedge 3 Comments

Watch For Retrace

We’ve all heard, it’s 80% planning and 20% trading.

So it is, with D.R. Horton (DHI).

As a reminder, this site addresses strategic positioning first, then tactics, and then focus. See the About section for more.

Strategy Review

Unless the charts say otherwise, rates are going higher, not lower. Gold and silver will likely go lower first, before going higher, supply destruction and resulting price increases will continue (not advice, not a recommendation).

D.R. Horton: Possible Retrace

One of two scenarios are likely. 

DHI could continue its decline, straightaway. Monday’s open could be gap-down, posting down, no looking back.

The next scenario, a retrace to test underside of resistance. As the chart below shows, that underside is right at 38.2%.

DHI, Daily

The chart presents ‘potential’ only. If the market is well behaved, a retrace to test is a reasonable expectation.

If there’s a retrace, Fibonacci Day 8, from the 1/22/24, high is this coming Wednesday, the 31st.

That day just so happens to correlate with the Fed interest rate announcement due out at 2:00 p.m., EST.

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.

Rates Rising … Miners Critical

January 25, 2024 By in DHI, DUST, GDX, GDXJ, Interest Rates, JDST, Spring-to-Up-Thrust, Wyckoff, ZeroHedge 1 Comment

Then, The Real Estate Bubble

The elephant in the room:

Rates are not going lower, they’re going higher; sooner rather than later (not advice, not a recommendation).

Yesterday, ZeroHedge reported the 5-yr auction was nasty with rates rising to near recent highs.

Today, we have yet another supply disruption impacting so-called ‘inflation’.

Couple that with an apparent real estate implosion.

DH Horton (DHI) down nearly – 12% in just days and holding steady in the pre-market session.

It looks like the bubble party is (finally) over.

Gold Miners To Catch Bid?

The miners are at another critical juncture.

The Juniors GDXJ, are up in the pre-market session (8:00 a.m., EST) and may be catching a flight-to-safety bid as parts of the markets top out and/or reverse.

That flight to safety may not last long as we’ll see below.

Junior Miners GDXJ, Daily

Trading is up about 1% or 0.32 pts in the pre-market.

GDXJ, price action is at The Danger Point®. 

We are either in a reversal (Wyckoff spring) set-up or just a pause before posting lower.

If it’s a rally, the target area is shown (magenta oval); corresponding to a 61.8% retrace.

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.

Gold Miner Failures

January 20, 2024 By in DUST, GDX, GDXJ, Gold & Silver, Gold Miners, Inflation, JDST, ZeroHedge

One Failed Move, After Another

If it’s not working, get out or change sides.

For Junior Miners GDXJ, it’s the bullish case that’s not working.

But wait! What about ‘inflation’?

Here’s just one example of where the so-called ‘inflation’ is coming from: supply disruption and destruction.

Junior Gold Miners GDXJ, Weekly

As this post said, few things get more attention on The Street, than a failed move.

The chart shows at least three potential bullish set-ups that have failed.

Fail, fail, fail; what do we think GDXJ, will do at Monday’s open. Are we going higher?

Well, anything can happen; there’s a gap on the daily chart that could be filled. 

However, posting lower levels might be just getting started (not advice, not a recommendation).

Depending on Monday’s action we may have confirmation of a downside trend and channel.

More on that at 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.

Interest Rate Shakedown

January 16, 2024 By in Bonds, Federal Reserve, Interest Rates, TLT, ZeroHedge 2 Comments

The ‘Uh Oh’ Moment

Now it begins, sowing the seeds of doubt.

‘First rate cut may be later than expected.’

How about be prepared for no rate cuts this year and more likely, continued elevated rates or higher rates (not advice, not a recommendation).

Let’s not forget we’re over a year now from the release of this post, postulating there would be no ‘Fed pivot’.

So far, no pivot and no cut.

Now that nearly everyone’s positioned on the ‘rate cut’ side, it’s time for the shakedown, possibly beginning today.

Long Bonds TLT, Daily

Just over two-weeks ago, this post noted to be on the watch for a failed breakout.

Looking at the result, we’re now below the prior breakout resistance, a bearish sign.

The chart of bonds itself is telling us (unless it’s reversed to the upside), there’s an increased chance rates are more likely to move higher (not advice, not a recommendation).

Note the ‘persistence’ to the downside of the MACD indicator. This tends to happen when sustained pressure is being applied … selling pressure in this case.

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.

Interest Rate Snare

January 11, 2024 By in DUST, Ed Dowd, GDX, GDXJ, GLD, Gold & Silver, Gold Miners, Greg Hunter, JDST, SLV, Wyckoff

Manipulated Into The Trap

‘They [The Fed] are totally tricking the markets’ (time stamp 3:30), link here.

Yes, it’s a real chess game going on and the other side, makes up the rules.

This update presents that despite all the manipulation and head-fakes, significant market pivots in the miners were identified (correctly) with Wyckoff analysis.

That analysis, in turn, helped develop a long-term strategy (not advice, not a recommendation).

Junior Miners GDXJ, Weekly Close

Three key points are shown on the chart. 

The first goes all the way back to October of 2020, link here. There’s something wrong with the miners.

Potential for another downward pivot, link here, was identified to-the-week, if not, to-the-day.

The subsequent move printed the most impulsive price action since the spike melt-down of early 2020.

Which brings us to today.

Another potential pivot has been identified, link here.

As of this post (11:20 a.m., EST) the Juniors GDXJ, continue to rachet lower.

The Long Term

As Ed Dowd points out in this interview, what’s happening now will affect us all for decades, if not centuries to come.

Therefore, it’s a good idea to have a long-term strategy.

From the above chart, it’s clear that Wyckoff analysis has been on the correct side of GDXJ price action; the bearish side (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.

Biotech Squeeze … Terminal ?

January 10, 2024 By in $SPSIBI, Biotech, Federal Reserve, LABD, SPBIO, XBI 1 Comment

At The Extreme

Has the biotech squeeze been stretched to its limits?

The daily chart of XBI, shows we’re at an extreme, MACD is flat, crossing below the signal line, second time in the past five trading days, and price action is at well-established resistance.

Still Waiting

What has not happened, is printing a new daily low.

As of this post (11:30 a.m., EST), XBI is trading just above yesterday’s low of 92.00.

Biotech XBI, Daily

At 3:15 p.m., EST, New York Fed president John Williams is due to speak.

It may or may not be a catalyst for what happens next.

However, it still remains to be seen if there are any rate cuts on the horizon. So far, none.

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’s Technical Exhaustion

January 6, 2024 By in DUST, Federal Reserve, GDX, GDXJ, GLD, Gold & Silver, Gold Miners, JDST, Richie Naso, Uneducated Economist, ZeroHedge

Divergences, What Happens Next?

Is gold about to blow up?

Blow-up breakout? … No, blow-up breakdown.

As we’ll see in the chart of GLD below, double bearish divergence on the daily.

At time stamp 6:10, here, in the Fed’s own words, rates are not coming down, they’re likely to go higher.

‘We will need to increase the Fed’s funds rates further …’

Not forgetting bonds, may have already reversed, here.

Then, liquidity crunch … yet to appear in full force.

Next, a reminder, herd instinct is strong, link here.

Gold GLD, Daily

On a daily basis, we have a double bearish MACD divergence coupled with a terminating wedge.

As veteran trader Richie Naso says, ‘It’s all about patterns‘.

Let’s add intrigue, here (time stamp 13:58), finding out what happens in a liquidity crisis, i.e., ‘Sell everything.’

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 ? … Ruh, Roh

January 3, 2024 By in Bonds, Federal Reserve, TBT, TLT, Uneducated Economist, Wyckoff 3 Comments

This Time’s Not Like Last Time

The market’s down; bonds down at the same time.

Wait, what?

If the Fed does not lower rates, then bonds risk a reversal to the downside (not advice, not a recommendation).

Of course, no one expects that to happen. No one.

Well, maybe there’s at least one, link here: 

‘No pivot anywhere in sight.’

Bad News, Bonds

It gets worse when looking at TLT. As we’ll see below, the chart has a (potential) repeating set-up, link here.

Long Bond Proxy TLT, Daily

The set-up is not complete and may well diffuse into nothing.

However, if it does not and we get back below the magenta resistance line, there’s likely to be some serious confusion in the markets.

Wyckoff said a century ago, those incorrectly positioned in the market, provide the fuel (as they panic and exit) for a directional move.

Just think about who’s (potentially) on the wrong side and what side that is, i.e., the bullish side.

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