Inverse Oil & Gas, DUG is trending higher at +3,400%, annualized.
As long as the trend holds, DUG is an excellent play (not advice, not a recommendation) to the short-side.
The last report on DUG had the trend at approximately +2,200%. Additional price action has adjusted that number higher as shown.
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The short answer is, probably not.
Is anyone looking at the technical condition? No, it’s all about ‘putting it to the man’.
In all of Wyckoff’s writings, he never once proposed the idea of taking the large controlling entities for a ride.
He was totally immersed in figuring out what those entities were trying to accomplish; then getting on the right side of the trade.
For all we know, the whole hedge fund blow-up, kabuki theater could have just been a sacrificial lamb (an inside job) targeting silver for a massive short opportunity.
How’s that for strategic thinking.
Right now, in the pre-market, SLV is right at new recovery highs.
The real question should be, ‘how long can the hype last?’
Can it finish the week at new highs and post a bearish divergence on the weekly MACD?
Price action itself will decide. What we do have, is risk being removed on the short side.
Inverse fund ZSL is down a stiff -21%. If there is a short, that’s the one to watch (not advice, not a recommendation).
It’s important to note, GLD is nowhere near a +10% move. It’s a non-confirmation on silver.
Separately, the overall markets are trading higher but appear to be under their prior session (daily) highs … indicating a short position in those markets is still viable.
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Price action in futures tracking fund CORN, is congesting in a tight range; ready for breakout to the upside.
This is not about inflation.
Frequent visitors to this site already know the entire food supply chain, from field to market, is being systematically destroyed.
Probably the best source of documentation is at ice age farmer.
For years, ‘ice age’ has been reporting step by step plans and events in place to choke-off food production and distribution.
Digressing for just a bit: The firm managing this site, presenting its analysis of markets and corollary events, is constantly searching for additional information or new data sources.
If a new market analysis (or other news) source is located, then that ‘source’ says there’s food price inflation because of dollar devaluation, it’s eliminated as being reliable or aware of actual events: DONE.
At this point, everyone should know exactly why food prices are rising.
Whenever we get the next ‘Black Swan’ event, there’ll be no time to vet out information sources. That should’ve been done long before there’s another market or world upset.
The recent Game Stop (GME) event may just be a blip; a side detour in the overall plan.
Van Metre calls the whole short squeeze “brilliant”. So it was.
We can rest assured, that hole in the dike (a proletariat uprising) will be plugged ‘tout de suite’.
Food is the key. It’s the choke point. End of digression.
Getting back to CORN. Price action may congest more before a sustained breakout. There may even be a head-fake to the downside to flush out any weak longs.
From an investment or trading standpoint, price is at the point where political events could cause action to become unreliable … think Jimmy Carter and the grain embargo after the Russians (Soviets at that time) invaded Afghanistan.
It’s the trader’s discretion whether or not to position long.
My firm’s action is to be aware of price and use it as a proxy for up-coming events.
Stay Tuned
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Semiconductor SOXX, is hanging by a thread.
Did SOXX just break away during the past week or is there going to be an attempt to close the gap?
When a market closes down for the week and near its lows, there’s usually follow-through action at the next open.
SOXX may never get the chance to fill the gap.
If we look at inverse fund SOXS, it’s showing a potential trend-line. Maintaining that line will double the price (at Friday’s close) sometime in early March.
The chart below also shows the firm’s entry point; not advice, not a recommendation.
In a way, semiconductors are similar to aviation; margins are razor thin.
When there’s an economic down-turn, both get hit especially hard.
At this juncture, I have positioned my firm short in both real estate (via DRV) as well as short the semi-industry (via SOXS). Not advice, not a recommendation.
The SOXS position finished in the green by the close. DRV is showing a loss but closing that gap quickly.
Separately, and in a report planned for tomorrow, we’ll cover the food supply. The ongoing (planned) shortage is proving correct, the approach it’s ‘corn first, then silver and gold’.
If Van Metre’s GDX forecast is on target (declining to 17, or even 14), gold bugs may find themselves liquidating their positions; just so they have enough money to pay for hyper-inflated food.
In effect, gold will be irrelevant; a very possible (short-term) event.
Stay Tuned
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Yesterday, the S&P tested its trend breakout and then reversed.
This morning’s pre-market action is down again.
The teminiating wedge is clear. Then a decisive break with an upward test. Late in the session that test was rejected and the market headed lower.
That scenario could have easily been from 1931’s stock market action, not 2021.
Buried within the Wyckoff training course material (first published 1931), available here, is a statement to the effect:
‘When a market breaks a trend decisively and with volume, there’s nearly always some type of rally to test the break.’
That’s exactly what we got yesterday. Now, the S&P (SPY) is in a wide pre-market range but essentially trading lower.
A terminating wedge is typically the last stop in a move; whether it’s up or down.
The S&P could of course rally from here. At this point, probabilities favor lower; at lest to a measured move target in the vicinity of 368, for SPY.
Bear flags post in a bear market
Bull flags post in a bull market
Right?
One would think.
It’s different though, if you’re a rabid ‘not-right-in-the-head’ gold bull.
The professional does not care which direction the market is heading. The only important thing is, and to paraphrase Livermore:
‘There’s only one side of the market to be on … and that’s the right side.’
GDX has posted and tested a bear flag.
At this juncture, it’s heading lower … possibly to test between 15 – 17, as was just mentioned yesterday, by Van Metre (time stamp 10:00).
Conversely, in the general equity markets, there’s reversal action with the S&P, Dow, Russell, all lower.
On top of that, bonds are in their own reversal (up again in the pre-market) as well as the dollar.
In the Van Metre link above, in addition to comments on gold, he also sates ‘the market is not prepared for a bond (and dollar) reversal.
When markets are sure of one thing and the other happens, it’s very ugly.
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Recent price action now provides a tight range for downside targets.
Recall, that P&F charts show potential, not guarantees.
There’s enough congestion in IYR to build significant downside objectives. If we’re at a sustained reversal, then as IYR passes through the 78 – 82 area, it builds even more downside potential.
This is why there’s been so much focus on IYR.
Thinking of it in Elliott Wave terms, if we’re about to begin a Wave 3 (down), it can’t be shorter than Wave 1
That wave (100.75 to 56.27) collapsed a whopping – 44% .
As always, anything can happen. IYR is trading down but right at support. It could get a new lease on life … but probabilities say no.
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Pre-market action has all major indexes trading lower; SPY, DIA, QQQ, SOXX and IWM; all down.
Real estate, IYR has no real pre-market volume (20-shares) so its open is unknown. However, inverse fund DRV, does have volume (3,700 shares) and its action is up about 4%.
The daily close chart of IYR (above), has price action contacting an established axis line.
That was yesterday. Over the past two-weeks, as price ratcheted higher volume has declined (circled area enlarged).
That decline indicates lack of commitment at these levels.
Yesterday’s close also put IYR firmly in up-thrust position (ready for reversal).
Over the past week, short positions were opened using DRV (not advice, not a recommendation)
Average price of the short equates to DRV @ 9.92; not far from current pre-market trading.
If IYR posts a new daily low (below 86.62), it’s another data point the anticipated reversal may be at hand.
The rising action has changed the P&F forecast reported a few days back. Updates will be forthcoming.
If this is the start of a sustained reversal, the plan is to build the short position as price action dictates.
The downside of the entire market (S&P, Dow, etc.) is immense. Commercial real estate is especially vulnerable. Price action itself tells us that.
Stay Tuned
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It’s taken over six months for real estate’s IYR gain a net positive 1.9%.
The S&P eclipsed that many times over during the same time frame; gaining nearly 19%.
By this time, everyone knows about margin debt at never before extremes and the latest hedge fund blow-up.
As with earthquakes, cracks in the system appear to start small and then build to a massive disconnect.
Behind all the shiny object headlines, commercial real estate looks terminal. While the rest of the market powered to new recovery highs, IYR went flat-line.
Today’s close may be important.
We’ll see if somehow IYR is going to break out of the six-month sideways action, continuing higher or if this is it; no more upside.
Currently, the firm is short the sector with a negative return. Possibly a debatable position. However, if IYR is going to stall and reverse, this is a high probability location.
It’s not much different than Van Metre’s approach to the bond market. We know how the game is played. The market remains at manic levels … just waiting for the catalyst.
Stay Tuned
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If Oil & Gas XOP is trading down, inverse DUG will open higher.
Already in the green on DUG (not advice, not a recommendation), a new daily high would allow the stop to be moved; assuring at least 5%, gain on the position.
The magenta arrows have possible action and resulting stop movement.
If DUG posts a new daily high above 23.86, and closes higher for the day, the stop will be moved as shown (22.71).
From that point, stop movement will be discretionary as/if DUG moves higher.
We’re looking for either signs of a new more aggressive uptrend, or confirmation of the “2,200%” trend on the chart.
Expect resistance to show up in the 28.00 area.
Stay Tuned
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The Danger Point® 