Repeating Pattern
The SOXX, continues to test (or follow) the underside of a trendline break dating back to mid-November, last year.
That line is not shown on the chart (at left), but what is shown, is a repeating phenomenon; Wyckoff, Spring-To-Up-Thrust.
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The Danger Point®, trade mark: No. 6,505,279
Tale of Two Fibonacci’s
This update said to watch for a CVNA retrace to levels between 227 – 233.
Last Thrudsay’s action reached and slightly exceeded the target(s).
With all of that, we now have Carvana at a confluence of Fibonacci levels.
Carvana CVNA, Daily
Note the corrective ‘a-b-c’ move to a Fibonacci 161.8%, projection.
That same corrective move is near the Fibonacci 61.8% retrace from the (recovery) high of 268.34, to the recent low 175.42, of January 3rd.
There’s so much ‘drama’ surrounding this equity that literally anything can happen.
Short interest (BigCharts) remains in the 10%, range; not moving appreciably in either direction for some time.
If the Hindenburg report is accurate, CVNA could vaporize at any time (not advice, not a recommendation).
However, that may not be the best use of CVNA’s (potential) woes.
Maybe a better opportunity is to think about what’s going to happen to all that inventory if things really go south.
How will that affect other competitors like CarMax?
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The Danger Point®, trade mark: No. 6,505,279
What Does The ‘Market’ Say?
According to this link, the downside rout in U.S. Treasuries is coming to an end.
Real or fake? You make the call.
Let’s go to the bond market and see what it says.
Long Bonds, TLT, Daily
When looking at the chart, we see a potential upside breakout (blip) from the wedge.
From an experience standpoint, extremely narrow wedge patterns posting near or at the apex before breakout, rarely if ever, produce a lasting move (not advice, not a recommendation).
We could get more of the ‘blip’ higher. However, a ‘blip’ is not a directional move. 🙂
Jawboning The Market
Anyone dictating what the market will or won’t do or what it should do (in the opinion of your website host) is misguided, or inexperienced.
The market itself decides what it’s going to do.
As Wyckoff said a hundred years ago (1902, to be exact), the market is moving based on its ‘own forces’ that are not connected to valuations.
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The Danger Point®, trade mark: No. 6,505,279
Contact Points
The last update showed the possible (downside) reversal set-up for real estate sector, IYR.
This update shows the largest cap equity in that sector (source, TC2000), ProLogis, PLD, and its current position.
ProLogis, PLD, Weekly
We’ve had essentially sideways action for over two years; trading between (approx.) 90 – 130.
In the past three months, price action has established what looks to be a downtrend and possibly a trading channel (not advice, not a recommendation).
Note the relatively heavy (upside) volume from last week, the green bar.
In Wyckoff terms, that volume is potential ‘effort vs. reward’, or exhaustion if PLD, continues lower from here.
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The Danger Point®, trade mark: No. 6,505,279
Repeating Set-Up
Real estate (IYR) has pushed higher above resistance and stopped dead; currently trading in a very narrow range.
It wouldn’t be all that interesting if price action was not in a repeating set-up:
Wyckoff Spring-to-Up-Thrust
Click on the side bar under the same name to see all posts related to this set-up.
Note: A set-up does not guarantee anything.
It’s just a market observed phenomenon that may result in a directional move (not advice, not a recommendation).
Real Estate IYR, Daily
There it is:
This is what’s called The Danger Point®
The risk of being wrong on a short position is at its least (not advice, not a recommendation).
Positioning (updates)
Biotech XBI is spending a lot of time hovering around support and not progressing downward (no matter all the Fibonacci correlations).
With that, LABD-25-01 was closed at slightly above break even (not advice, not a recommendation).
Real estate IYR was entered short early in the session via leveraged inverse DRV, as trade DRV-25-01. Stop for the trade is currently the session low. (not advice, not a recommendation).
Stay Tuned
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The Danger Point®, trade mark: No. 6,505,279
Time & Targets
Will it be like the old Ted Nugent song?
‘Kamikaze from the hundredth floor. Swan dive to the street.’
The last update wasn’t quite sure if we’d finished testing the trend break.
Now, with this morning’s session, there are more clues we may be getting closer (not advice, not a recommendation).
Looking back, this update had target(s) where price action could post before continuing the reversal (not advice, not a recommendation).
It was thought we’d get a rebound off the trendline. Instead, it looks like a test of the break.
No matter ‘how’ price action got to the target(s), it’s at the target. 🙂
Carvana CVNA, Daily
As of this post (11:26 a.m., EST), CVNA high for the day is 232.80, in the prior target range of ‘227 – 233’.
Today, is Fibonacci Day 34 (+1) from the all-time high posted on November 25th, last year.
If there’s going to be a reversal, price and ‘time’ requirements have been met (not advice, not a recommendation).
Adding to that, this update with Carvana (Hindenburg) ‘fundamentals’ in place.
Along with yesterday’s update, rate of economic decline increasing, it’s probable we’re nearing some type of inflection point (not advice, not a recommendation).
Stay Tuned
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The Danger Point®, trade mark: No. 6,505,279
Collapsing On Several Fronts
‘Retail’, selling silver, link here.
Jewelry whacked, link here.
Loan Shark, link here.
You know it’s bad when booze takes a hit, link here and here.
Producer prices launch higher, link here.
Lumber prices collapse, again, link here.
Travel restrictions, link here.
Then, there are ‘valuations’, link here.
Also then, there’s this, link here.
Lastly, short squeezes and liquidity traps … bear market behavior, link here.
Speaking of ‘short squeeze’, we had biotech do just that in the pre-market (and regular) session.
Biotech XBI, Daily
If it really is/was a short squeeze, once shorts are covered, the expectation is for price to continue lower (not advice, not a recommendation).
Included in the chart, is a bit of insight you’re not likely to find anywhere else.
Note the distance of each retrace after a leg down. Less each time and Fibonacci multiples.
As stated yesterday, XBI posted outside down. That means price action penetrated the lows of the prior session and closed lower.
As wild as it may seem, penetrating the lows and closing lower, put XBI in Wyckoff ‘spring’ position.
That’s what we saw with today’s action.
As this post is being created (11:45 a.m., EST), XBI action continues to erode to the downside currently trading at the 87.60 – area.
Stay Tuned
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The Danger Point®, trade mark: No. 6,505,279
Confirming, Right-Side Channel
It’s a recurring theme with biotech.
Over and again, this sector (IBB, XBI) is not participating in tandem with the other major indices.
Today’s pre-market mayhem higher over supposed slower outlays of possible trade tariffs to happen some-time, some-day, caused the major indices to launch upward. 🙂
Well, everybody seemed to be blasting higher except one sector, biotech.
Wyckoff Directed Action
No matter what the ‘narrative’ may be, Wyckoff analysis directs us to look at what the market is actually doing, then interpret the action.
Early after the open, trade TZA-25-01, was exited, +8.9% gain, short position opened in biotech via LABD, Trade: LABD-25-01 (not advice, not a recommendation).
Biotech XBI, Daily
Today posted outside down, taking out both the high and low of the prior session.
Note the trading channel and width, Fibonacci 13-Days.
Also note the two ‘breakaway gaps’. The second one on January 10th, much wider than November 12th, last year.
Stay Tuned
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The Danger Point®, trade mark: No. 6,505,279
Was That It?
Is Carvana just like Wile E. Coyote, where he heads off the cliff, hangs for a moment, then looks down?
When looking at the weekly chart, we see the trend break and then what looks like a test.
The question is, was that it?
Carvana, CVNA, Weekly
As shown above, the nuance that hints at continued lower prices, not a more protracted test, is today’s open; that is, it’s below, last week’s close (not advice, not a recommendation).
Positioning
From a corporate standpoint, no positions (long or short) are planned for CVNA.
We’re just noting the price action, providing the analysis (not advice, not a recommendation).
Stay Tuned
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The Danger Point®, trade mark: No. 6,505,279
A Commodity Rotation?
Those commodities, along with soybeans, palladium, platinum, and yes, gold and silver, have rotated higher in unison, over the past one-to-two weeks.
Is it just a coincidental blip or is there something else?
Each may have their own narrative like the ever-present and (super) simplified mantra for gold, ‘inflation’.
What about silver, platinum and palladium?
They have not followed in the (real inflation) footsteps of late 70s and early 80s, where all were moving in tandem.
This time, only gold is at or near all-time highs.
This update is just noting the rotating action of all the commodities discussed.
Further analysis, to come
Stay Tuned
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The Danger Point®, trade mark: No. 6,505,279
The Danger Point® 