June 5th, 2008.

That was the day where the bear market began in earnest.  After that day, it never looked back. 

The final posted low was 666, on March 6th

Let that sink in for a while:   Six-six-six, on the sixth.  There is much more going on than the general public realizes.

We wrestle not with flesh and blood …

Getting back to that day on June 5th, those old enough will remember the market had been trending lower for about three weeks.

Then, on Thursday the fifth, there was a huge rally.  The S&P moved up over 2% on the day.

This rally as it turned out was just short covering.  The next day, price opened gap-lower and moved swiftly lower to new daily lows.

The move down was about -3.5% on the day.  There was no denying at that point, it’s a bear market, potentially a crash (which it was).

Is that same scenario what just happened today, Friday?

Looking at the analysis that Sajad put out on August 15th   He showed “there’s one final move to go”: Time stamp, 5:20

His quote is shown on the chart.  Indeed, the Dow 30, the DIA, had one more move to go before reversal.

If the coming Monday, opens gap lower and posts a new daily low, the market is performing in a way that’s similar to June 5th of 2008.

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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, Short Stop

It’s about 20-minutes before the open.

For those monitoring the short trade in biotech (IBB), the stop has been moved (not advice, not a recommendation) to the area around IBB, 133.11.

This is the middle of the trading range from September 23rd.

There may be orders hiding right around IBB 132.00 – 132.40 and the market could attempt to search these out.

We’ll see.

Annotated chart below:

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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.

Amgen: Strategic Reversal

Amgen (AMGN) was covered in the last update as having a wedge breakout to the downside. 

Price action then promptly reversed back into the wedge, giving the equity a new lease on life.

At least, that’s the way it looked at the time.

If we pull out to one time frame higher … the weekly, and look at AMGN, the reversal set-up and possible channel(s) are clear.

The terminating, rising wedge is there.  However, we can see several trend-line symmetries.

Taking the solid blue trend-line (right side) and bringing it backward (dashed lines), sometimes referred to as “reverse trend-line”, there’s symmetry in the AMGN set-up.

We may be witnessing the strategic reversal of AMGN which has already developed a massive trading channel.

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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.

Dow 30: Measured Move

It’s thirty-minutes before the open. Dow tracking ETF, DIA is trading lower about one-point or -0.43%.

The inverted chart of DIA, has a wedge breakout.

Using traditional techniques for a ‘measured move’, we can project to the 235-area for DIA.

When and if that happens, the Dow will have pushed below significant sepport levels that would then become resistance.

Inverse fund typically used for the downside (not advice, not a recommendation) would be DXD at 2X Inverse.

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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.

Trending: Biotech

Today’s action may be in a trading channel.

It’s a Fibonacci eight days from the low of September 4th, to the top on the 16th.

That time correlation, along with the channel hits, help to provide validity to the set-up.

Our short position in the sector has not changed appreciably.  There was a slight backing off yesterday, by reducing the size about one-percent.

However, during today’s action as IBB was making intraday highs (BIS making lows), the short position was increased, via BIS.

In any event, we have a hard stop at the day’s high, IBB 134.85, which is approximately 31.46, on BIS:  Not financial advice, not a recommendation.

As of this post, 7:00 p.m., EST, the S&P 500 futures are trading down about -0.50%, giving the inference that downside action will continue at the next session.

Silver futures have dropped another 4.5% – 5%. Price action’s heading straight down.  Nearest chart support for the SIZ20 (December) contract is around 20.00.

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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.

Silver Freak-Out

It’s all starting to sound like the global warming scam. 

‘It’s only ten years before all the ice caps will be melted’.  Problem is, it’s only been ten years for at least 40-years!

Note:  For a total evisceration of the AGW narrative (or hoax), Tony Heller has done an excellent job.

Which brings us to silver and the boogeyman of ‘hyperinflation’s just around the corner’.  It could be the latest false narrative that’s not panning out.

At some point, the dollar will go to zero.  That’s well understood by anyone with a modest amount of financial knowledge.

It’s what happens before that; that’s what’s important.

Even J. Bravo, is starting to think it may not be a slam dunk to dollar zero.  He had a guest on a while back that got howls of disapproval with his deflation (first) assessment.

Not saying the premise is right.  Just saying when there’s that much of a consensus (hyperinflation), it has a nasty habit of not coming to fruition.

As always, anything can happen.  We could get hit with a solar flare or a massive volcanic eruption throwing everything out of balance.

Matter of fact, both of those are highly likely right along with a near earth miss, asteroid passing within 13,000 miles … tomorrow.

In the meantime, we’ll focus on typical market behavior.

The last update stated:  “Barring any additional upside, the expectation is for price action to retrace and test the wide, high volume chart areas.”

Fast forward to now.  There was just one more blip higher before silver began its correction in earnest.  This is normal and expected market behavior. 

The chart shows there’s potential to go all the way back to support levels at the 17-area.

However, it’s also possible we’ve seen a top and silver’s headed to new lows (time stamp 3:10); That’s completely opposite the consensus and potentially a more likely result.

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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.

Amgen (AMGN) Forecast

Now that AMGN is breaking lower, let’s take a look at how far down it could go.

The chart shows the terminating wedge pattern.  Depending on where the wedge entry is measured, slightly different projections will result.

A fairly conservative estimate is shown.

If we do not get some kind of recovery back into the wedge itself, a measured move projects to the 185-area.

A potential downside breakout was highlighted yesterday. The press as typical, appears surprised by the markets opening lower, continuing lower.

Doing what they do (fabricate a ‘reason’), AMGN’s decline seems to be a political problem … even though its been in a topping formation for years with ever slowing upward trend.

No matter, it’s all about healthcare uncertainty.  Tomorrow it may be all about something else. 

Wyckoff said over a century ago, the financial press was essentially useless at best and intentionally deceptive at worst.

A hundred years later, not much has changed.

Wyckoff analysis is one of the best kept secrets on Wall St.  We’ve been using it to spot market opportunities since 2008.  Find out more about Wyckoff analysis here.

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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.

Upside Breakout Ready

The chart below has a bullish wedge.

Price action’s at the wedge top.

This is how it looks just before an up-side breakout.  Of course we’re dealing with probabilities and the pattern could morph into something else.

However, at this juncture it looks about to move … higher.

The problem is and you may have already noticed, the chart does not look quite right.  Why is price action at the bottom and volume at the top?

It’s inverted … turned up-side down.

We’re looking at Amgen (AMGN), inverted.

Inverting the chart is an old trading technique that’s used to remove analysis bias in one direction or other. 

If a chart looks like a buy (or sell) no matter which way you turn it, there’s a problem … a significant trader’s bias that blinds one to the potential.

Amgen is the largest component in the biotech (IBB) sector. The coming week, may support or negate the breakout potential.

An expandable version of the chart above is here.

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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.

Out of Air

Right at the danger point, biotech’s (IBB) upward energy evaporates.

The 2-Day chart below shows a series of thrust energy units.

Going from 57-Million, all the way down to less than 1-Million (0.85-M), in six trading days.

An expandable version of the chart above (with additional technical data) is here.

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.

Peabody in the NEWS

Back in late August, the nascent BTU reversal was identified when an entry would have been low risk.

The chart speaks for itself.

If there’s only one chart that shows the benefit of reading the tape (not advice, not a recommendation) as presented on this site, The Danger Point, BTU is the case in point.

Effective tape reading requires at least 10,000 hours of training and/or experience.

The author presenting on this site, has over 23,000 hours at the tape. However, that experience does not equal perfection.

Experience equates to probability.

The longer one is in the markets, through booms, busts, flash crashes, manic and panic, the more one is able to operate as the masters of old and be separate from the crowd.

Now after BTU has decisively launched higher, everybody’s an expert. Two examples below:

No. 1

No. 2

We indeed, have a position in BTU.

However, instead of looking to buy with the rest of the herd, we’re looking for the exit.

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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.