The daily chart above, shows our current location.
Inverting the chart and expanding the price action gives us the following:
Was today an attempt to break the up-trend (down-trend, non-inverted)?
Wyckoff called this type of sharp adverse move ‘threatening action’.
You won’t know if the market’s going to carry out the threat until the next session or subsequent sessions.
Positioning:
My firm’s (core) short position remains unchanged (not advice, not a recommendation).
However, the main account holding of LABD, was reduced by approximately 2.9%, during this session to adjust for margin requirements.
It’s important to note, the after hours session is already trading about 1% higher (for inverse LABD); a typical occurrence when the day’s move was a shakeout.
We’ll see if that action carries over to the regular session tomorrow.
Stay Tuned
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.
Because, it’s the news that’s pushing around those who are easily manipulated, causing set-up(s) to materialize.
Decades ago, Wyckoff said that a speculator, will never be successful in the markets until they can completely ignore the news.
Sure, it’s important to monitor the news … but not for the purpose of speculating or investing.
Keep track of it to identify what they’re trying to accomplish. What’s the desired outcome for their press releases? Who are they trying to influence and maybe ask why?
Wyckoff went on to say (paraphrasing).
‘Put the other traders and speculators to work for you. Stand aside and let them spend their own money to drive prices into a high probability set-up.’
With that in mind, last week’s ‘Shakedown’ update on biotech SPBIO, and inverse fund LABD, said this:
“Because LABD, price action has hit the 21.40 area three times and rebounded, … it could, … could head lower for a penetration and spring set-up.”
Well, today was the penetration and spring set-up 🙂
Inverse Biotech Fund LABD
Hourly Chart
We’ve had the penetration of support … the rebound as well as what looks like a test.
Expectation for LABD, is to move higher from here to the top of the trading range.
Positioning:
My firm remains short SPBIO via LABD (not advice, not a recommendation).
Biotech’s showing weakness in the face of all-time highs in the S&P as well as the Dow.
What’s going to happen to ‘already in a bear market biotech’, when the overall markets reach their final top?
Stay Tuned
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.
No manufactured (um, sorry ‘supply chain’) crisis would be complete without a fire.
However, there’s a problem with all this hypnotizing the masses to hyperinflation.
That problem is … the dollar’s not playing along.
Dollar, UUP Analysis:
In fact, the dollar is showing significant strength.
It’s right at Fibonacci 23.6%, retrace (very shallow) and appears ready to move higher.
The weekly chart of UUP, is below and includes the Fibonacci levels.
The next chart expands the last few weeks to show contact with the 23.6%, line and what looks like a nascent move up:
If UUP manages to make a new weekly high above last week’s 25.24, level, we have confirmation it’s attempting to continue the reversal and up-trend.
That reversal started way back at the beginning of this year.
This is what was said back then when the dollar looked poised for imminent collapse.
If gold and the dollar are still inversely correlated, the dollar appears ready for an upside breakout; obviously, a breakout higher would then put down pressure on gold.
Gold (GLD) Reversal:
Five weeks ago, the potential for a significant gold (GLD) reversal was discussed at this link.
Then, over the weekend we’ve discovered one other analyst coming up with their own version.
At this juncture, GLD continues to ratchet higher to the 171 – 175 target area.
That move’s happening along with the requisite press generated hysteria … helping lead the bulls to a potential last stand.
Stay Tuned
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.
About a week ago, the fist bullet item in this list discussed Moderna; that when price action reverses to the down-side (after being a market darling), the lawsuits start.
It’s not the lawsuits themselves, but the discovery process that’s part of the trial … if it goes to trial.
One can guess with some assurance, the last thing Moderna wants is for this baby (any potential lawsuit) to go to discovery and trial.
This could be one of those times, popcorn is justified; watching it all from the sidelines.
Southwest Backs Off:
Looks like greed is more powerful than jabs.
At least we can see the priorities and keep that for future reference.
Now, all-of-a-sudden, it makes no sense to destroy executive stock options with forced collapse of the organization.
Glad we have such genius executives in charge. 🙂
Meanwhile, Back At The Ranch:
While all that’s going on, we still have the financial press talking about earnings and sales and ‘pent up demand’ like any of that is important or actually real.
The only reality at this point in time, is the price.
Biotech SPBIO, Inverse Fund LABD Analysis:
We’re going to start with the un-marked chart of SPBIO:
Next, we’re going to invert that chart; giving a better perspective of what the inverse fund LABD, is tracking:
Repeating a previous observation; price action over the last two months (from late August to now), has calmed down.
Price range has narrowed and movement looks orderly.
Our take on this; bears have assumed control and are preparing (opening positions) for a directional move.
Compared to my firm and probably anyone reading, their capital is unlimited. They’re also patient.
Depending on the level of greed, they’re keeping price action from a major breakout until positioning is complete (not advice, not a recommendation).
Wyckoff termed this phenomenon (a century ago) as the ‘composite operator’, or the ‘central mind’.
This is how markets work. There’s no getting away from it.
By making a transaction, any transaction, one has implicitly entered the ‘arena’ where the gladiators (the professionals) are ready to take all you own.
Moving in a little closer, we already have a trend.
Price action bounced off support on Friday (resistance on the inverted chart) but closed nearly unchanged.
My firm remains short SPBIO via LABD (not advice, not a recommendation).
That is, until the market itself says the bearish analysis is wrong or it’s time to exit.
Stay Tuned
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.
It’s your host’s engineering background that causes him to go looking for supporting data (or lack of) when presenting a contrary opinion or analysis.
Usually, that means sifting through randomly selected research or YouTube links on the subject; just to make sure the idea’s not being discussed by someone else.
This round’s sample of links is provided for reference below.
The proper sequence is: Sentiment, Volume, then Price. 🙂
The Potential Gold (GLD) Set-Up:
We’re calling the ‘coup d’état’, for lack of a better description.
The bullish hype is so bad and the me-too-ism on YouTube is so disgusting; being devoid of original thought (i.e., it’s a set-up), one has to be prepared for the opposite.
If GLD, manages to move higher to the 172 -175, area, it could be the final thrust before a wrenching sharp, or sustained decline.
The last time gold was discussed in detail was this post.
Gold (GLD) Analysis:
Daily chart (mid-session) of GLD, with the set-up target is below:
These charts are an example of what strategy is all about.
Price action after that post, seemed to negate the possibility and so the idea was tabled.
Now, with the GLD reversal off the lows in late September, we’re back on.
Stay Tuned
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.
It looked like biotech inverse fund LABD was going through a standard ‘test’ and then secondary ‘test’ (not as common).
Price action lulled participants to sleep; including this author.
Then , the shakedown.
The purpose is obvious; scare (nearly) everybody half-to-death and have them close out their positions.
It seemed to be working.
Early on, it looked like LABD was going to crater … with SPBIO launching higher accordingly.
Then, a funny thing happened.
LABD Block Trades:
As LABD price action was reaching its session lows, huge amounts of volume started to print on the tape.
Price action was not going down further and yet ‘block trades’ started to show up.
Strictly speaking, a block trade is anything over 10,000 shares.
However, I’m lumping in the 5,000 share trades and up, into the ‘block’.
There were plenty of those including one (buy) block for 13,000 @ 21.66; that’s equivalent to $281,580.
Stand Fast:
It’s days like today, understanding where one is in the market, is critical.
The initial work had been done long ago; that biotech (SPBIO) had printed three down quarters in a row.
The main long-term trend is down until price action says it’s not (not advice, not a recommendation).
LABD Analysis:
The un-marked daily of LABD is below:
Next, we move closer in and mark-up the 30-minute chart:
The large spike in volume is clear.
Volume in that bar’s 30-minutes was the highest since October 1st which was during a huge upward spike in LABD.
Positioning:
If LABD comes back down to the lows, it would indicate weakness and potential exit (not advice, not a recommendation).
At this juncture, the short biotech (SPBIO) via LABD, is being maintained (not advice, not a recommendation).
Last Thing:
Because LABD, price action has hit the 21.40 area three times and rebounded, … it could, … could head lower for a penetration and spring set-up.
Everybody and their dog (that’s left) has now put their stops at that level.
Stay Tuned
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 SPBIO, is in the process of testing yesterday’s action.
The hourly chart of the inverse fund LABD, has price action in the process of competing a secondary test.
The take-away is unchanged.
Biotech (SPBIO) looks like it’s preparing for a directional move (not advice, not a recommendation).
Price action thus far (since the support penetration), is consistent with that potential.
Stay Tuned
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.
Art & Science: Interpreting price action requires both.
Since the September 2nd, high in biotech SPBIO and low for inverse LABD, the character of the market has changed.
Price action has become tight and orderly.
Typically, when that happens, someone (some entity) is gaining control. They are preparing the market for a directional move.
That’s the science part; the observation part.
Art is ephemeral. You don’t know if it matters to the subject at hand or not.
You won’t know until it becomes obvious.
In the markets, when it’s obvious, it’s too late.
News Of Note:
Within the past few days, there have been at least two news stories of note: Here and here.
It’s not really the stories themselves but what they represent.
Go to time stamp 8:10, at this link. That’s what it’s about.
The so-called controlling entities may be in the early stages of consuming each other.
What does that have to do the the markets and specifically biotech? Those thinking they were safe and getting fake ‘protection’ could be realizing, maybe they didn’t.
Maybe it was the real thing.
Mid Session:
SPBIO (Inverse, LABD):
The market’s had a change in character.
Whether or not the above links were the reason, just part of the reason or not at all, won’t be known until long after the market opportunity has passed.
We’ll start with the un-marked daily chart of leveraged inverse fund LABD:
Tight price action identified:
Now, it gets interesting.
We’ll zoom in on part of the tight area using the hourly chart:
LABD has oscillated around support and then penetrated that support as shown.
Price action rose dramatically from there. We’ll label it as a sign of demand (Wyckoff term).
Next, we have the testing action. David Weis used to call it “The Gut Check”.
Tests can either pass or fail. That currently puts LABD at the danger point.
Positioning:
My firm’s position remains unchanged: Short biotech via LABD (not advice, not a recommendation).
Summary:
As this post is being created, LABD is moving up off the test lows. So far, overall price action has been well behaved.
Thus far, there has been no major (news generating) price break.
That type of controlled movement allows large positions to be built carefully and quietly (not advice not a recommendation).
Stay Tuned
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® 