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 daily chart of FXI below has pre-market action as the blue line.
Currently, we’re sharply higher but still below the March 30th, high.
FXI, Daily Chart
The next chart shows the March 29th, recovery high.
For the market to continue a next leg higher, obviously, it needs to penetrate that high.
Inverse (YANG) Fund Tracking Errors
At this juncture, about 30-minutes before the open, YANG is trading at 14.01 – 14.09, slightly below the 14.16, stop.
Even though FXI is not above the March 30th high (used to locate the YANG stop), the inverse fund is trading slightly below that stop level.
This is the tracking error that’s common with every leveraged inverse fund.
Trading Action
We’re either in a ‘gut check’ upward move in FXI, before reversing to lower lows, or it’s the start of a next leg up.
Words of wisdom from the late David Weis … ‘Prove it’.
If this is the next leg higher, FXI must first penetrate the March 30th, high of 33.62, then penetrate the March 29th high of 33.73.
Using that requirement (of higher highs), the plan is to partial exit YANG if/when FXI penetrates the 33.62 high and full exit at penetration of FXI: 33.73 (not advice not a recommendation).
Summary
With each price action move, FXI is successively removing the probability of repeating the same action(s).
We had a short-covering gap higher during the week of March 18th. That massive volume move is not likely to be repeated.
We now have what may be a ‘gut-check’ move testing current highs. This move would also join the ranks of price action that’s not likely to be repeated.
If FXI, is unable to move higher from this juncture, it weights the probability even more to the downside.
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.
On one hand, BABA, has launched more than 60%, off its most recent lows.
On the other hand, that launch posted the highest daily, weekly monthly, and (about to be) quarterly volume, ever.
Markets tend to come back and test wide bar, high volume areas. Just that probability alone, coupled with the unprecedented volume behavior on four timeframes, points it to the bear side.
Shorting China FXI, via YANG, discussed yesterday (not advice, not a recommendation), is essentially a BABA short as that equity is weighted more than 10%, in the FXI.
So, let’s take a look at what BABA, is saying about itself.
BABA, Weekly Chart
The massive weekly volume highlighted below.
Next, we have a not-so good-looking picture (for the bulls).
BABA may be posting a long-term Head & Shoulders top.
Next, is the daily with its largest volume ever as well.
Getting closer-in on the daily, there are support levels to watch.
At this juncture, early in this session, we’re at support now. Breaking down puts the next, less defined support into play.
Positioning
The last post, showed what was then current positioning in FXI leveraged short vehicle, YANG (not advice, not a recommendation).
During the session yesterday, the YANG position was increased substantially. Essentially, the low-risk opportunity was used to its fullest advantage.
This method of trading goes way back to Livermore, Wyckoff and Loeb
Livermore:
Focus on the big picture and strategy. Look for the (potential) big move.
Wyckoff:
Use what the market is saying about itself to find the danger point. The point of least risk.
Loeb:
Real market opportunities are rare. When one is found, it must be used to its fullest extent.
Do NOT diversify. Focus positions and time the market.
Summary
As always, anything can happen.
BABA is currently at one of its support levels and holding for now … bulls still have a chance.
Obviously, the active trade, YANG-22-01, is taking the bearish stance. The plan is to have a tight, in-the-green stop, soon (possibly today’s low).
As this post stated at the outset, we’ve got all time high volume on four timeframes: Nearly a bearish case in itself.
The high-volume area may be tested.
That means BABA (and FXI) price action would need to move lower to perform that test.
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.
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 analysis used in the video is different from what’s on this site … and that’s ok.
The probability conclusion is the same, i.e., EEM down.
The takeaway from the video, is the timeframe. If the cycles in the analysis are in-effect (time stamp 8:04), then EEM potentially bottoms-out, in late June or early July.
Summary
The initial short trade via EDZ (EDZ-22-01) was exited, with profit on March 16th.
Another attempt made, on the 17th – 18th (EDZ-22-02) but exited on the 18th, with a moderate loss (-6.5%).
From the 22nd – 24th, another position was opened.
EDZ-22-03, currently in the green at +1.9%.
Stop is set at EDZ: 10.55 (not advice, not a recommendation).
Parting Shot
A quick check of ZeroHedge, has the usual suspects out fomenting falsehoods; attempting induce more fear and misdirection of the masses.
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.
Huge truth bombs from a just released Stew Peters broadcast, linked here.
At time stamp 15:25, one of the major truths is Taiwan; specifically, Taiwan Semiconductor, TSM.
Why Taiwan?
Why focus on Taiwan Semi and its connection to the Emerging Markets, EEM, ETF?
We’re focused on it because that’s what the tape itself is telling us to do. The EEM, has already been in a sustained downtrend since mid-February, last year.
It’s been three successive (chart) quarters of lower lows and lower highs.
Looking at semiconductors in general, out of the top ten market cap equities in the SOXX, only TSM, is at or below its 23.6% retrace level. All others have rebounded much higher.
As Wyckoff said a hundred years ago … ‘somebody always knows something.’
Meaning, those really in charge (time stamp 2:53, above) already know the plan; their actions show up on the tape.
We’ll look at those tape actions with TSM below
Taiwan Semi TSM, Daily Bar
Moving closer in on the daily, we have the following.
It’s clear, at this juncture, price action has stalled.
Two sessions ago (Wednesday, 23rd) there was an outside down (reversal) bar.
This session and yesterday’s, have been inside action so far.
There has been no new high or low, posted.
Although today’s action posted below yesterday’s low, it has not posted (currently, at mid-session) below the reversal low.
Summary
Anything can happen.
Price action, TSM could launch upward past the resistance and continue to a 38.2%, retrace.
At this point, it seems to be low probability; all the good news (i.e., the short squeeze), may be out.
We’re heading into the weekend and we’ve seen over and again, that’s when things go sideways.
As Livermore said, ‘surprises tend to happen in the direction of trend’.
TSM, is and has been, testing the underside of its breakdown; it now appears poised to continue lower.
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.
Emerging Markets (EEM) price action has stopped dead.
As we’ll see below on the Weekly Close chart of EEM, there was a huge run-up last week.
This week’s different as the upward move has (at this juncture), come to a halt.
Emerging Market, EEM Weekly Close
It may be tongue-in-cheek, but the arrow shows that so far, there’s been essentially no upward progress this week.
Looking at the un-marked daily close, we have this.
Expanding the last several trading sessions, the upward net moves have become shorter.
Today, price action failed to close at a new (bounce) high.
Volume also contracted -32.5%, from the previous session and gives clues we may be at or near a top.
Summary
If EEM’s price action is slowing down on the upside, then leveraged inverse EDZ, is slowing down on the downside.
Compared to last week, this week has been very quiet.
As said in other posts, a 23.6% retrace is rare.
However, if EEM reverses from this point, confirming the top, then downside opportunity is likely to be significant (not advice, not a recommendation).
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.
“A reversal away from this area confirms the channel and weights probability to more downside …”
As seen in the chart of TSM, a reversal is what we’ve got.
TSM, Daily Close
Note that volume increased on the reversal; helping to confirm the channel.
If this reversal ‘sticks’ and TSM continues lower, the downside potential is significant.
Summary
It’s a no-brainer to assess the world situation as unstable.
It’s exactly during these (once in several generation) events where international borders (for example) like Taiwan and China could potentially change.
Several links of interest on China/Taiwan are below.
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.
Starting with the weekly close of TSM below, we can see the recent top, breakdown and now test.
Closer-in on the next chart, the market’s testing resistance.
Looking at the daily close, it gets more intriguing.
Daily Close, TSM
Looks like TSM’s at the right edge of a downward channel.
Zoom-in
A reversal away from this area confirms the channel and weights probability to more downside (not advice, not a recommendation).
Summary
Taiwan Semi (TSM) is the largest cap in the Emerging Markets, EEM.
Leveraged inverse of the fund is EDZ.
If we get a reversal in TSM this session or possibly next, it may affect the overall emerging markets sector, dragging the EEM down as well.
Unless the tone changes (U.S. and world), meaning that volatility would have to subside, price action behavior at this juncture, suggests it’s a bear market.
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.
All it might take, is one major ‘Carrington Event‘, Coronal Mass Ejection to rip the mask off Crypto; just as this link has done with the truth of ‘The Speck’ protection.
From a predictive programming standpoint, it’s interesting the typical symbol for crypto, the most popular ‘Bitcoin’, is colored gold.
Which brings us to the actual chart of gold (GLD).
Gold (GLD) Weekly
From a Wyckoff, tape-reading approach, we have to trust what the chart is telling us.
That is, gold has reversed.
Earlier posts on gold and the miners have effectively stated, there’s no more ‘fear’ to be had save an outright nuclear detonation.
If that happens, it’s doubtful that anyone will be running to the gold market for protection.
Does everyone have Potassium Iodide tablets? If there’s an ‘event’, they’ll be worth their weight in gold (literally).
The Noose Tightens
Constriction, elimination of the food supply (along with everything else) continues and is accelerating.
Fortunately, or unfortunately depending on perspective, we’re watching a potential major opportunity unfold.
That is, the opportunity to acquire hard precious assets when (nearly) everyone else liquidates.
Gold to Crypto
Is that even possible?
Would gold (and miners) be sold off to buy Crypto?
According to Kyle Bass in the link above, it’s already happening and has been for a while.
From a ‘beast system’ standpoint, it makes perfect sense, going from the pure (i.e., gold) to man-made, corrupt.
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® 