Author Archives: thedangerpoint

” Pull It ! “

July 9, 2022 By in Basic Materials, DJUSBM, I Allegedly, King James, SMN, SMN-22-01, ZeroHedge

Check Mate, for The Middle Class

From a strategy standpoint, we’re now ready for the next round of financial destruction.

If we use this article from ZeroHedge, as the pivot point, consumer credit has maxed out.

The consumer (i.e., middle class) is now on the downward slope, just as the layoffs are about to begin in earnest.

Following the typical corporate model, expect job losses (time stamp 15:18) to start slow, then accelerate into December of this year.

The latest employment numbers provide the perfect backdrop to raise interest rates into a declining economy; all going as planned.

Market Response

As is typical, everyone’s focused on the major indices; The S&P 500, Dow, NASDAQ, SOXX, and on.

However, there’s one sector covered in the past, that’s mostly ignored: Basic Materials, with ticker DJUSBM.

That sector has held up until recently; probably because the thinking was, we’re going to have infrastructure projects to keep the economy going.

Looks like someone got the memo; Basic Materials has broken down.

As of this past Friday, it’s at a critical point.

The prior post from last November, does an excellent job of highlighting the divergences (which have only become worse) as well as downside potential.

Basic Materials DJUSBM, Weekly

On the chart, we’ve got a breakaway gap that looks like it won’t be filled.

After that break, price action has formed a congestion area over the past three weeks.

However, it’s the congestion area giving us clues; the sector’s set up for an imminent break to the downside.

If that congestion holds true, it’s a stunning revelation of what may be about to happen.

We’ll go to the daily chart and start with a Fibonacci time correlation between pivot points.

Basic Materials DJUSBM, Daily

Well, it might not look like much.

However, let’s go one step further with another time correlation, shown below.

If you’re reading ahead, then you already know a trading channel has been defined.

The next chart shows the result.

For this channel to confirm Fibonacci ‘Day 21’, Friday’s action had to post lower … and it did.

That lower action also confirms, the channel’s a Fibonacci 13-Days wide.

Even more disconcerting (depending on one’s viewpoint), the channel lines are declining at approximately – 96.5%, on an annualized basis.

It’s not straight down but it’s close.

The next chart has a zoom of the congestion area.

Note how the grey dashed ‘center line’ is perfect in its contact points … further confirmation of the channel.

Leveraged 2X Inverse SMN, Daily

Although volume is still light, it has improved dramatically.

On a weekly basis, last week was the second largest trading volume at least going back to the ’07 – ’08, meltdown.

The inverse fund is shown below with the trading channel.

Liquidity is still marginal but has picked up over the last three weeks.

The Week Ahead

Obviously, the expectation for the next open is to post lower for basic materials.

Even with all the analysis, it’s the market itself that’s the final arbiter.

Positioning

As the hyperlink tabs in this post (top-left) show, I’ve positioned one account short the sector via SMN (SMN-22-01), with a stop just below Friday’s SMN, low at around SMN 14.05 (not advice, not a recommendation).

It’s a very tight stop.

The analysis is either in-effect, or it’s not. By this Monday, we’ll find out.

A Decline of Biblical Proportion.

On a strategic basis, we can see how expertly the middle class has been maneuvered into a corner.

For the past two years and probably much longer, that sector has been positioned to not have any recourse when the real decline hits.

We may be there now.

At the same time, if you’re up on Biblical references, you already know that when destruction came, there was always a ‘remnant‘.

The remnant was left to either escape or re-build and was typically 10% of the population.

If you’re reading this, you have already decided at some level, to be part of that remnant.

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

Active: Short DJUSBM via SMN, as SMN-22-01, stop @ SMN 14.05

The China Set-Up … Short FXI

July 8, 2022 By in China, FXI, Neil McCoy-Ward, Wyckoff, YANG 2 Comments

From One High Probability, To Another

The last update’s high probability set-up was negated at the next session … only to morph into another high probability.

We’ll go straight to the FXI, leveraged inverse fund YANG.

FXI, Leveraged Inverse YANG, Hourly

It’s about twenty minutes after the open and YANG is trading at around, 11.15 – 11.16.

The chart below shows a Wyckoff spring set-up in progress.

What’s missing at this point, what’s to be expected during this session or next, is the test.

That same hourly chart is marked up below to show how that test may look with a pass or fail.

Risk on a position short FXI via YANG (not advice, not a recommendation) can be reduced by allowing YANG price action to retrace as much of the opening gap as possible.

It’s Friday and we’re heading into the weekend.

Does anyone really want to be positioned long? 🙂

It’s not as if anything bad is happening.

Nothing like British Members of Parliament (and the Prime Minister) turning in their resignations … all staged but that’s a whole other story.

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

Eyes On China … FXI

July 6, 2022 By in China, David Weis, Dr. Elder, FXI, SRS, SRS-22-01, Wyckoff, YANG, YANG-22-02 1 Comment

Textbook (YANG) FXI, Short Entry

If the trade’s falling apart, get out.

That’s the admonition from Dr. Alexander Elder in his book ‘Come Into My Trading Room‘.

And so it was. Short position in real estate, closed out.

Even with all the analysis, real estate (IYR) has pushed higher. The short position via SRS (SRS-22-01) was exited just below the stop @ SRS 16.33.

Exiting a trade, frees the mind to look elsewhere for opportunity.

Typically, one would have to wait days or even a week or so for something else to be available.

However, despite appearances, the market is moving very fast at this juncture.

Looking around in those markets, we have a textbook entry signal (to go short) the FXI (not advice, not a recommendation).

David Weis & The Video

Many times, on this site (actually, for years), the Weis video has been recommended.

Next to Wyckoff’s treatise from 1910, Studies In Tape Reading, that video is probably the most important one could ever watch concerning the markets.

In it, he describes a ‘trick’ as he calls it, to get aboard a market that’s already underway. At the time, his discussion was using DE (if memory serves), as the trading vehicle.

That ‘trick’ is highlighted below on FXI

China Index FXI, Daily

This is how the chart looks early in today’s session.

Next, we’re going to invert the chart to mimic what’s seen on leveraged inverse fund YANG.

And now, the signal zoomed-in

The above price action is nearly exactly as presented in the Weis video; even though it was recorded fifteen-years ago.

The above signal is not a guarantee.

It is, however, a high probability low risk set-up (not advice, not a recommendation).

The entry signal was triggered at approximately YANG 11.75, with a stop at YANG 11.02, for a ‘risk’ of 0.73/share (not advice, not a recommendation).

Summary

As this post is being created, YANG is retracing and is currently trading near 11.67, narrowing the distance from any potential entry to the stop.

On a very long term (Monthly) basis, there are interesting things happening in FXI. We’ll be covering that soon 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

Active: YANG (YANG-22-02), entry @ 11.83, with stop @ 11.30

“The Big One” for Real Estate

July 6, 2022 By in IYR, Real Estate, SRS-22-01, Wyckoff

Subtle Clues, Time’s Up

‘Sometimes it seems as if the market hangs in the balance by the weight of a feather.’: Wyckoff, circa 1910.

Is this the big reversal to the downside?

Before we get to that answer, let’s review two recent market pivots (including today).

A Day To Remember

Back on May 4th, the post with the same title, linked here, was to be used for reference on a go-forward basis.

The post has a linked article, whose comment section could be surmised as the bourgeois rebuke of a 78-year-old fund manager.

That manager was quoted as saying, “It’s the biggest bear market of my life”; to which the younger crowd responded with derision, effectively saying the old man’s a dolt, an idiot, a doofus and needs to retire.

Now that time has passed, let’s remind ourselves when the quote was published with the daily (IYR) chart below.

Not only did IYR, not close higher after that, it never printed higher either. It was the top of the pivot reversal, to the day.

The 23.6%, Retrace

Then we have this report just days ago, showing IYR’s price action coming back to a (very weak) Fibonacci 23.6%, retrace.

The daily chart repeated below, showed the ‘risk’ on a short position as approximately 1.04-pts (not advice, not a recommendation).

Risk Narrows Even More

As a result of today’s new daily low and lower close, one can (theoretically) reduce the risk of a short position even further (not advice, not a recommendation).

The risk is now defined as the distance between today’s close (IYR: 93.32) and Friday’s high of IYR: 93.96

A subsequent push above Friday’s high negates the short and would likely indicate a potential move to a 38.2%, retrace.

Subtleties of The Market

A lower daily print and marginally lower close (IYR down just – 0.39-pts.) does not look like anything of consequence.

We’ll see about that, at the next session.

Stealth Crash?

Lastly, we have this and especially this.

Could we be right in the middle of a historic crash and not even know it?

Of course, it’s never for sure, until it’s over.

However, if shorting opportunities are being spotted, entered, and managed correctly, probabilities are that one will already be positioned short when ‘the big one’ hits.

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

Active: Positioned short via SRS (SRS-22-01), with stop at SRS: 16.38

Recession First … Depression Next

July 3, 2022 By in AMZN, Food Supply, Genesis 41, I Allegedly, IYR, Jerimiah Babe, PLD, Real Estate, SRS, SRS-22-01, The Epoch Times, ZeroHedge 1 Comment

The Last Place To Be … Real Estate

The most illiquid of all ‘assets’: Real Estate

Two quarters of negative GDP (even with cooked books) equals recession.

Next up, full-blown depression.

Some would argue (like J.B. and Dan) that we’re already in a depression … we skipped the recession part altogether.

Do not pass Go. Do not collect $200.

Anyone who thinks the Fed’s going to ‘pivot’ because the numbers are weak, does not understand (or won’t admit to) the real purpose of the entity; but I digress.

The Strategy

Way back in December of 2020, this post was released which discussed ‘Genesis 41’, specifically.

It was an intuitive assessment; we’re in a phase where corn and grain (i.e., the food supply) are potentially more important than ‘stacking‘ silver or gold.

Over the ensuing year and a half, how correct, that has proven to be.

Then, nine-months ago, was this post, presenting the ‘elephant’; a massive population decline whose repercussions would last the lifetimes of anyone reading.

Now, we have this. A report that confirms the elephant.

It’s all starting to hit the mainstream, although the language is still being couched to not cause undue panic. Good luck with that.

So, what’s next?

The Danger Point: Real Estate

While mainstream press and money managers alike struggle to figure out the obvious, we have price action itself telling us the next likely direction of the market.

During an economic downturn there are many places not to be such as semiconductors, airlines and other low margin businesses, restaurants and so on.

However, the most illiquid of all, is real estate. It does not matter how bad one wants to sell, if there is no buyer, there is no sale.

Real Estate IYR, Weekly Chart

Last week, real estate IYR, closed right at the Fibonacci 23.6% retrace as shown.

Getting closer in on the daily, it’s marked up to show the risk from a shorting perspective (not advice, not a recommendation).

Real Estate IYR, Daily Chart

In this case, the risk on a short position is defined as the distance from last Friday’s high (IYR: 93.96) to that same week’s high of IYR: 95.0

Let’s add, Friday’s action saw IYR, retrace a Fibonacci 76.4% (the most available) of the entire move for the week.

The Summary

Amazon (AMZN), ProLogis (PLD), and Real Estate IYR, are joined at the hip.

Now the economy’s imploding, massive warehouse space is not needed.

Ditto that for employees as well.

ProLogis is already down – 31.2%, from its all-time highs set just this past April.

We’ve already shown PLD, has a nasty habit of going straight down during a market route.

Last time, PLD, crashed over – 84%, in just two months.

It’s likely to be worse, this time around.

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

Dumpster Fire … Real Estate

June 30, 2022 By in Altos Research, DRV, DRV-22-04, IYR, Neil McCoy-Ward, Real Estate, Wyckoff

Price Reductions, Accelerating

From a technical perspective, it’s a disaster.

The last post showed price action had nowhere to go but down.

In that post, a trading channel was identified on the weekly chart.

Now, this week, with the action from the past three sessions and possibly a fourth (today), the channel is being confirmed.

Then, we have this:

Price Reductions Accelerating … At Record Pace

As if on cue, to support the assertion from Tuesday’s gold update; specifically:

“We should expect market events to reach never before seen extremes.”

We’re getting that same ‘never before extreme’, in real estate; presenting itself as accelerating price reductions.

At time stamp 5:20 at this link, we can see a graphical presentation of that collapse.

To borrow a quote from Dan at i-Allegedly: ‘Anyone who thinks price reductions are going to taper off, are kidding themselves’.

We’re just getting started.

Real Estate IYR, Daily Close

It’s about fifteen minutes before the open and IYR, is trading down nearly – 2%, in the pre-market.

That action confirms the declining channel shown.

As a result of this week’s apparent pivot (identified in the last post), a new channel appears to be emerging.

This one’s more aggressive.

If the new channel ‘sticks’, real estate trouble’s happening faster than most would expect.

Pulling out a little farther on the chart shows the downside potential.

Declining at nearly – 95%, annualized hardly seems possible.

Nearly everyone has been lulled to sleep with the orderly decline of the markets thus far.

In non-related but nevertheless connected event, the situation world-wide is moving faster, not slower.

It does not matter these events are completely fabricated (as was The Speck).

The effects of the fabrication are real.

Wyckoff Analysis Leads The Way

This week’s reversal off of last week’s trend lines confirms their existence.

Price action itself is leading the way; this is the crux of Wyckoff analysis.

The market itself defines what’s important.

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

Panning for Gold @ $1,300/oz.

June 28, 2022 By in Dollar, GLD, GOLD, Kitco News, Wyckoff 2 Comments

Gold Could “Unwind”, In A Sharp Decline

As far as is known, no other site has identified, gold (GLD) has “changed hands” with the next probable direction, as sideways or down.

That is, until now.

Sometimes, it literally takes years to find anything useful from mainstream financial media. However, you really can’t blame them; it’s not their job to reveal the truth.

By chance, every once in a while, someone makes a mistake and bits of truth, escape.

That may be where we are with the following Kitco NEWS interview, linked here.

It’s worth a half-hour to watch the entire exchange but for us, the real business starts at time stamp: 19:05.

The Overall Gold, Premise:

If the dollar moves sharply higher and the markets move lower (or crash), gold’s response may be a wash-out to $1,300/oz., or lower.

“Changing of Hands” as identified on this site, was mostly intuitive. We won’t know for sure if it was the (real) inflection point until gold resolves itself.

Now, we have another view from a separate party (above), that at least recognizes gold’s downside potential.

With that said, let’s look at gold (GLD), Quarterly

Gold (GLD), Quarterly Chart

There are only two trading days left in the quarter; it’s reasonable to think we’ll get something similar to the un-marked chart below.

The next chart shows the Wyckoff up-thrust (reversal) along with an attempt to move higher (the test) that was rejected; prices continued lower.

The next chart is the one no gold bull wants to see; downside projection(s).

Using a standard Fibonacci tool, we have the above projections.

If there’s a major unwind of gold positions, price could decline to the GLD, 133-area, corresponding roughly to physical gold @ $1,300/oz.

Uncharted & Unprecedented

The caveat: We’re not in any time that’s happened before (other than maybe the collapse of the Roman Empire).

It’s uncharted territory.

We should expect market events to reach never before seen extremes. That would include the potential for a severe draw-down in gold.

The World, Then

If gold gets to the $1,300/oz level, it would easily be considered a buying opportunity.

What if gold keeps going lower, moving below $1,000/oz?

The second projection, targets approximately $950/oz.

What, then?

What if the $1,300 level, was bought by those with means, using both hands … including massive margin (if it’s still available).

What happens if there’s another leg down; then margin calls?

Can’t happen one might say.

Well, oil going negative for the first time in history couldn’t happen either … until it did.

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

Predatory Lending = Collapse

June 26, 2022 By in 2007 - 2008, Activist Post, DRV, DRV-22-04, IYR, Prechter, Real Estate, Scott Walters 1 Comment

The Top, Is In

Just like the last bubble but worse.

That’s the assessment from agents in the field on the imminent real estate implosion.

Interest rates have risen dramatically, applications have evaporated, properties not moving as before, prices are dropping, lenders deploying the last resort; Adjustable-Rate Mortgages (ARM).

When the ARMs, show up in force, it’s over.

Technical & Fundamental

Over the past several days, the real estate situation has been assessed from both a technical (chart) perspective as well as the fundamentals.

The bottom line (below), is so long, it may have to be covered in several posts.

  • On a weekly and daily close basis, IYR has contacted underside resistance.
  • On a weekly and daily close basis, IYR has contacted the right side of a downward trading channel.
  • Multiple gap-fills at IYR, 91 and 94. Volume declines over – 22.5%, on the second gap-fill.
  • Multiple rising wedge breaks on multiple time-frames signal a potential drop of – 41.5%, from current levels.
  • Trading volume contracting (as price is rising) on multiple time frames, indicates potential lack of trader commitment to higher prices.
  • Financial press gets in the game (with several reports), saying ‘now is the time to buy’.
  • As highlighted above, once the Adjustable Rates dominate, the top is in.
  • This top may be far worse than ’07 – ’08, as debt levels are much higher, consumer is tapped-out and there is a massive ‘elephant’.
  • That elephant is now going mainstream with the resultant effect of unprecedented population decline/disablement.

So, let’s get started.

Real Estate IYR, Weekly Close

Un-marked chart.

Test of underside resistance

Zoom of underside contact.

Right side trendline.

Zoom of contact points.

Trading Channel

Wedge Break: Daily Chart

Zoom of break and test

Wedge Break: Weekly Chart

Note:

A measured move to 55-area, gets IYR, back to 2020 lows. That’s a reasonable expectation for an initial leg down.

If we use Prechter’s assessment concerning bubbles (manias), price action eventually retraces every bit (sometimes more) of the entire bubble move.

That puts the ultimate destination of IYR, somewhere in the vicinity of 14.0, or lower, representing a decline of – 88%.

Closing Argument

Remember this gold breakout?

It was going to be $3,000/oz., in months, not years.

Gold-O-Mania was coming. You could even sign up and pay money to read the group-think of the imminent launch.

Well, obviously at this point, $3,000/oz., is nowhere in sight.

Gold (GLD) is even lower now than it was then. On top of that, the ‘changing of hands’ assessment has not been negated; prices continue to grind lower.

Having the financial press cheerlead at the exact wrong time, is an (almost) necessary component to identify a lasting reversal.

As we can see here and here, the financial media’s position is, we’re heading higher. There is ‘real buying’ (whatever that is) for the first time in weeks.

However, from the chart evidence presented above (and we didn’t even get to ‘gap-fills’, ‘multiple wedges’, ‘contracting volume’ … maybe later), it’s hard to present that price action will somehow move significantly higher.

Price action behavior above, appears to point to an immediate or very near-term downside reversal.

Summary

Lastly, we have this from Activist Post: Real estate housing crash in progress.

Be careful. If you read the article, can you see the ruse?

It’s been discussed before on this site. That is, the real purpose of the Fed.

All is going according to plan.

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 Mid-Session, Update

June 22, 2022 By in $SPSIBI, Biotech, David Weis, LABD-22-04, SPBIO, Wyckoff

One Last Low, For LABD

Yet another low for inverse LABD.

Is this trade set-up still viable and/or worth the pursuit?

Short answer (at this point) is yes, and yes.

We’re going to look at the tape (the chart) and let it tell us what’s happening from a Wyckoff analysis perspective.

Since we’ve just past mid-session (12:37 p.m. EST), we’ll use the 4-Hour chart.

Biotech SPBIO, Leveraged Inverse LABD: 4-Hour

The unmarked chart above, looks like a mess.

Volatility everywhere in the past four sessions; including the Fed announcement on June 15th.

The marked-up chart below shows two distinct 4-Hour reversal bars.

Each of those bars were subsequently penetrated to the downside thus negating any entry signals.

However, it’s the next chart that draws from the secrets of Wyckoff analysis.

That is, “Shortening of the thrust”.

Discussed by David Weis in his training video, when thrusts become shorter, probabilities favor we’re nearing the end of the move.

As shown below, net downward thrusts on the chart have narrowed significantly.

Note that each downward thrust has successively less energy as shown on divergence of Force Index.

The next chart zooms-in.

Positioning

Based on the above, as much as price action gives the appearance of moving lower for LABD (higher for SPBIO), the energy to do so, appears to be spent.

Obviously, the accounts being managed have gone through a draw-down over the past trading sessions.

One account was stopped out @ 44.58 and then re-positioned at 44.01. The other account was allowed to draw down (not advice, not a recommendation).

The LABD-22-04, trade remains intact.

Summary

If the trend remains down for SPBIO, it’s highly unlikely the index will make new daily highs beyond this session.

If it does, then we can consider the trade set-up invalid.

A reasonable stop location at this point for inverse LABD, would be near or below the lows for the day (thus far), currently @ 42.37 (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

Solstice Reversal

June 22, 2022 By in $SPSIBI, Biotech, LABD, LABD-22-03, LABD-22-04, SPBIO

Let’s Not Forget, S&P Bottom @ 666.67

The S&P bottomed out at 666.67, on March 9th of 2009.

Putting it differently; that’s 3/9/09.

When that ’09, bottom is discussed in the financial press, they quickly round it up “667”; nothing to see here.

Market Reversal

The S&P needs to print a new daily low to make it official but our chief cook and bottle washer, biotech, looks like it’s not waiting around.

Pre-market action in (inverse) LABD is already at a new daily high, corresponding to a new daily SPBIO, low.

Once again, the short position was exited during the last session and then re-entered (discussed below) towards the end of the day (not advice, not a recommendation).

Trade LABD-22-03 is closed out; LABD-22-04, now open.

Biotech SPBIO Inverse Fund LABD

The chart shows pre-market action is at this juncture; Fifteen minutes before the open.

The hourly chart below has entry detail along with the current stop.

LABD Hourly

Positioning

With the market to open gap-higher (SPBIO, gap-lower), the first order of business is likely to be an attempt to close that gap.

If there’s going to be an attempt, look for it within the first 90-minutes of trade.

From my firm’s standpoint, the actions are obvious: We’ll be looking to increase the LABD-22-04, position and continue to have a tight stop (not advice, not a recommendation).

Summary

Anyone accessing this site for any length of time is most likely, fully awake.

Go ahead and look up “June 21st” on this calendar; it all makes sense.

If this reversal ‘sticks’ and is the pre-cursor to much lower levels, we know ‘the enemy’ has not changed.

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