Monthly Archives: September 2024

Biotech (fake-out) Breakout

September 20, 2024 By in $SPSIBI, Biotech, Bonds, Federal Reserve, Interest Rates, LABD, LABD-24-18, SOXS-24-16, SPBIO, TLT, Wyckoff, XBI 1 Comment

That Didn’t Take Long

It was just four days ago, the mainstream (in this report) was telling us, be on the lookout for a biotech breakout.

That was then … here we are now.

Price action in XBI, attempted to break higher at the Fed announcement.

That move appeared to fail by the end of Wednesday’s session … then came Thursday’s launch higher.

However, that move may have failed as well.

Biotech XBI, Hourly

At this point, we’ve posted a Wyckoff Up-Trust (reversal).

If this is a significant reversal, we’re still in the very early stages; at The Danger Point®

Positioning

As can be seen in the sidebar, a short position was opened (yesterday), LABD-24-18.

That position has been increased in size during this session (not advice, not a recommendation).

The SOXX (short) Exit.

Yesterday, SOXS-24-16, was exited with an -11.6%, hit; so, everyone can see the effects of breaking one’s discipline (not respecting the position stop).

Don’t force the trade … sounds so simple.

Getting back to work, the XBI false breakout was recognized early and the trade opened.

Today, so far, we have follow-through, confirming the reversal.

Bonds Continue Lower

Bonds, TLT, are currently posting an outside-down (reversal) on the weekly timeframe.

The last time there was an outside-down on the weekly, was over two-years ago; week of August 5th, 2022.

After that, bonds declined a whopping 32% before (slightly) recovering.

Now, they’re posting outside-down … again.

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

Keep Eyes on Bonds

September 19, 2024 By in Bonds, Federal Reserve, Interest Rates, TBT, TLT 1 Comment

They’re Calling The Shots

Just like that, bonds reverse; rates higher (not advice, not a recommendation).

Now, it gets interesting.

The mainstream’s already covering; within hours (if not minutes) of the Fed’s move, saying if the economy ‘improves’ rates will have to move back higher; you can’t make this stuff up.

Rates are already ratcheting higher (chart below).

Long Bonds TLT, Daily Close

The pattern is clear; terminating wedge (not advice not a recommendation).

Pre-market action (as of 8:42 a.m., EST) has TLT, trading down (rates higher) – 0.84 pts or – 0.88%, giving further weight to potential (continued) downside reversal.

Fed Calendar

Looking at the Fed calendar, link here, it’s a very interesting date; ‘the day after’ November 5th.

Let’s see if the ‘rate cut’ is immediately reversed (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

What’s My (trend) Line?

September 18, 2024 By in Artificial Intelligence, Federal Reserve, Interest Rates, NVDA, SOXS, SOXS-24-16, SOXX

Nvidia Rachets Lower

Nvidia is trending down at a fast rate; anybody watching?

The mainstream ever bullish no matter what side, gives us this, link here.

Well, if we’re going to get an October surprise to the upside, it needs to happen soon (not advice, not a recommendation).

While we’re waiting for our ‘surprise’, let’s take a look at Nvidia’s repeating trendline characteristics.

Nvidia NVDA, Daily Close

The trendlines in the chart are exactly parallel.

If we’re in a trading channel, price action is currently at the far-right side (supply side).

The left side (demand side) channel line is a long way away, and down.

Note: After this post, NVDA, has not closed (or printed) higher.

Positioning

Now that Fed shenanigans are out of the way, mainstream conversation is bound to launch on another round of nonsense.

Let’s just hope we won’t have to keep hearing about it (like the rate cut) for another year, and a half.

With that said, short position on SOXX (via SOXS) remains intact: SOXS-24-16 (not advice, not a recommendation).

It too may have a trading channel. The plan is to cover the technical details in another 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 … Breakout or Fake-Out?

September 17, 2024 By in $SPSIBI, Biotech, Bonds, Federal Reserve, Interest Rates, LABD, LABD-24-17, SPBIO, TLT, XBI, ZeroHedge 2 Comments

The Bull & Bear Side

The last biotech trade (going short) was back in August, as LABD-24-17.

The trade posted a -3.6%, loss and from then, the decision was made to stand aside.

The sector was not validating its up-thrust (bearish) set-up discussed many times prior; price action itself, showed something else at work.

Fast forward to now.

At this point, we’re at (upside) resistance and threatening to break out; biotech has made the news, link here.

Biotech XBI, Weekly

“What do you see?”

Shown below is a wedge formation, the likely premise for all the hoopla in the linked article above.

Also shown, we’re just ticks away from a Fibonacci 38.2%, retrace of the entire move; February 2021 highs to lows, May of 2022.

Possibly as important, the volume (magenta arrow); where is it?

Where’s the volume (demand) for this underperforming sector, rising into some kind of (potential) breakout?

If there is a breakout, which could be as soon as tomorrow’s Fed announcement, price action will be monitored closely.

Bond Digression

The Fed does what the bond market tells it to do (not advice, not a recommendation).

From the last report, the potential downside reversal, was negated and bonds (TLT) are at their own breakout (up-thrust) level.

That being the case, probabilities favor a rate cut; finally, after 1.5 years of mainstream jawboning on the topic.

Back to biotech.

If we do get an upside breakout and it fails … we’ll cover the downside potential at that point.

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

Nat-Gas … Trend & Channel

September 16, 2024 By in Natural Gas, Oil, Oil & Gas, UNG, USO

Bottom Pattern, ‘W’

Nat-Gas is in a trend and potential channel.

Going back to this post, one reason given for continued lower prices in Nat-Gas, was the high price of oil: with Nat-Gas being a by-product of oil production.

Since that post, oil prices (USO) have dropped, and Nat-gas prices are on the rise.

Natural Gas UNG, Daily

The two dashed black lines are trend and channel.

There’s also a ‘W’ bottom formed; if broken to the upside, targets the ‘Measured Move’ as shown (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

CarMax … At The Edge

September 15, 2024 By in ALLY, KMX, NVDA, Semiconductors, SOXX, Wyckoff, ZeroHedge

Wyckoff Masterclass

Just twelve days from now, CarMax (KMX) reports earnings.

With that, we already have the backdrop of auto loan implosions; the cratering of Ally Financial (ALLY), link here.

Everybody seems to be waiting for used car prices to decline; conditions may now be in place to support an auto sector markdown.

Price action of CarMax supports the idea that lower prices, at least for KMX, may be just ahead (not advice, not a recommendation).

CarMax KMX, Daily

Right now, and similar to semiconductors, KMX, is testing the underside of resistance.

Numerous Wyckoff characteristics are shown.

First, the up-thrust, with a test.

Then, a decline that includes a wide (modestly) high volume bar; now being tested, as well.

Price action at this juncture, is at a Fibonacci 38.2%, retrace of the entire move starting from the August 26th, high.

Bear Market Characteristics

As with Nvidia and the SOXX, KMX, is posting wide bars, huge gap moves.

In the six-months of price action shown above, KMX, has oscillated in a range that’s 35%, wide.

This is not bull-market behavior.

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

SOXX at The Crossroads

September 14, 2024 By in Artificial Intelligence, NVDA, Semiconductors, SOXS, SOXS-24-16, SOXX, ZeroHedge 1 Comment

Decision Point

The SOXX, has reached a crossroads.

Shown in the chart below and similar to Nvidia (yesterday), the SOXX, is also at a potential inflection point (not advice, not a recommendation).

Maybe, it’s time to cue up the blues music; it could be an appropriate moniker for the road ahead.

Semiconductors SOXX, Daily

“What do you see?”

Below, what the market is saying about itself.

If this chart is in-effect, that is, if the market’s ‘respecting’ the trendlines and trading channel, we’re at the spot where one could ask, ‘Where to from here?’

As always, anything can happen and we could somehow, magically, power on higher; probabilities suggest not (not advice, not a recommendation).

Contra Indicators

If indeed, this past week was the infection point for Nvidia and Semiconductors as a whole, the euphoric ‘technology‘ conference, might go down as the most significant contra-indicator of the A.I., bubble (not advice, not a recommendation).

Let’s not forget, those in the know are cashing-out like there’s no tomorrow.

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

Is Today, ‘The Day’, for Nvidia?

September 13, 2024 By in Artificial Intelligence, NVDA, Semiconductors, SOXS, SOXS-24-16, SOXX 2 Comments

Fibonacci Time Correlations

Scuttlebutt from the Goldman Sachs technology conference, with chief cook and bottle washer Nvidia, had at least one journalist (do we still have those?) breathless, ecstatic (paraphrasing):

‘Never has there been so much euphoria’.

These links show how Fibonacci influenced potential, and then confirmation, of the all-time top and reversal.

As we’ll see below, price action continues with Fibonacci.

Nvidia NVDA, Weekly

This week, is ‘Week 13’, from the all-time high.

Fibonacci correlations continue on the daily.

Nvidia NVDA, Daily

So far as of 1:53 p.m., EST, it’s an inside day for NVDA, with yesterday as the potential ‘short squeeze’, retrace high.

Yesterday was also a Fibonacci 5-days, from the most recent low (Day 55).

Retrace High

As is typically the case, the crowd is still euphoric (maybe even more so) long after the high.

This is typical ‘bubble’ behavior … the party goes on (even harder) as the ship goes down (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

Nvidia’s ‘Power-Play’ … Part II

September 12, 2024 By in Artificial Intelligence, NVDA, Semiconductors, SOXS, SOXS-24-15, SOXS-24-16, SOXX, ZeroHedge

Wide Swaths of Instability

The last report on Nvidia, link here, nailed-it.

It said that demand had evaporated as seen by Force Index (thrust energy).

Nvidia went on to plunge over 15% before yesterday’s (what must have been a) short squeeze.

Coupled with that, was short trade (SOXS-24-15) in the Semiconductor Index (not advice, not a recommendation).

Yesterday, pre-market action (being short) for SOXX, did not look right; that position was exited just after the open.

Net profit for SOXS-24-15, was about +23.25%.

The whole scenario shows the importance of having the price action itself dictate the trading action.

The squeeze ‘excuse’ was the CEO of Nvidia giving a speech, then going off to sign women’s breasts … I’m not making this up.

All of which brings us to the chart.

We’re keeping the same Fibonacci 8-Day timeframe as the previous update.

Nvidia NVDA, 8-Day

There’s a lot going in with this chart.

First: Price action has become wide and unstable.

Second: The completed 8-Day, bar posted the deepest downside thrust energy ever.

Positioning

Once again, everyone has their own method and style.

With that, understanding where we could be in this market environment, i.e., the throws of reversal, another (tentative) short was opened in the SOXX (not advice, not a recommendation).

The stop on this trade (SOXS-24-16) is very tight … to be set near the (SOXS) lows of the 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

Carvana’s Collision Course

September 11, 2024 By in Car Questions Answered, CVNA

Date With Destiny

Anyone with two piston-rings rubbing together knows, the car industry is in chaos if not full-blown collapse, links here, here, and here.

We also ‘know’ that Carvana’s financial results have reached the realm of ‘interesting‘.

The last update on Carvana proposed that price action might continue on to a 50% retrace.

So far, it’s not happening.

In fact, it looks like CVNA, has decided to roll-over.

Carvana CVNA, Weekly

Price action has formed a terminating wedge, currently testing the bottom … potentially near a breakout to the downside (not advice, not a recommendation).

It’s about ten minutes after the open; CVNA is trading down 2.14-pts @ 128.58, hovering around the bottom wedge line.

Because CVNA, has such an ‘interesting’ business model, if and when we get a surprise, price action could move faster than anyone thought possible (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