Author Archives: thedangerpoint

Lennar … At The Limit?

September 23, 2024 By in Interest Rates, LEN, Real Estate, Usual Suspects

Massive Down-Thrust

Has home builder Lennar (LEN) finally topped-out?

The (potential) big ruse, interest rates are heading lower. We have the usual suspects, spinning how soon we’ll have the next rate cut.

Well, back at the ranch, home builder Lennar Corp. (LEN), posted massive down-thrust, selling energy this past Friday, after Thursday’s post-market earnings release.

As we’ll see below, force on the move was potentially the second highest ever, in the history of trading for the company (data going back to 10/5/18).

Lennar Corporation LEN, Daily

At this point (11:27 a.m., EST) LEN is having an ‘inside day’, trading within Friday’s price action.

Inside days are typically preparation for another kind of day, an ‘outside’ day 🙂

That’s where the trend is confirmed (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

Bond Reversal … ‘Outside Down’

September 22, 2024 By in Bonds, Federal Reserve, Interest Rates, NVDA, TLT, XBI

When Was The Last Time?

The market gives us clues, we just need to know where to look.

Even before last Wednesday’s Fed announcement, bonds were already heading lower (rates higher), reversing the day before.

Tuesday through Friday had successive lower closes in long bonds, TLT.

All of that, to wind up the week ‘outside down’, or posting a ‘key reversal’.

Those don’t happen often.

Long Bonds TLT, Weekly

The last outside-down weekly bar (in an uptrend) was over two years ago.

Bond prices declined 32%, before recovering.

In what seems to be a recurring theme, Force Index (like XBI, NVDA) is telling us there’s little-to-no-energy left to move prices higher (rates lower).

Of course, anything can happen, and reversals can themselves be reversed.

However, if bonds continue lower, it’s probably time to get the popcorn ready to see how the media paints the picture.

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

The Power Goes Out on Biotech

September 21, 2024 By in $SPSIBI, Artificial Intelligence, Biotech, Dr. Elder, LABD, LABD-24-18, NVDA, SPBIO, XBI 1 Comment

More ‘Natives’ Leaving

Like Yogi Berra used to say:

“It’s deja vu all over again’.

Only this time, instead of Nvidia, it’s biotech, XBI.

Nobody’s called on our hapless student at left … no, we’re still pumping out bullish propaganda to the masses.

Anything can happen and biotech could magically levitate to new, more manic highs.

However, the chart below, paints a very sobering picture.

Biotech XBI, Weekly Close

“What do you see?”

It’s been over six months of price action posting and then attempting to penetrate (closing above) the highs of the 101.50-area.

At Resistance: Bulls Exhausted

The center panel is Elder’s Force Index.

It shows (as with NVDA) a succession of force declines with each attempt to push higher.

The last force unit (19.4) has fallen off a cliff, compared to the unit prior (123.7); Force Index down over 84%.

Price action could always grind itself higher.

However, the inference is, the bulls are exhausted (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

Biotech (fake-out) Breakout

September 20, 2024 By in $SPSIBI, Biotech, Bonds, Federal Reserve, Interest Rates, LABD, LABD-24-18, SOXS-24-16, SPBIO, TLT, Wyckoff, XBI 1 Comment

That Didn’t Take Long

It was just four days ago, the mainstream (in this report) was telling us, be on the lookout for a biotech breakout.

That was then … here we are now.

Price action in XBI, attempted to break higher at the Fed announcement.

That move appeared to fail by the end of Wednesday’s session … then came Thursday’s launch higher.

However, that move may have failed as well.

Biotech XBI, Hourly

At this point, we’ve posted a Wyckoff Up-Trust (reversal).

If this is a significant reversal, we’re still in the very early stages; at The Danger Point®

Positioning

As can be seen in the sidebar, a short position was opened (yesterday), LABD-24-18.

That position has been increased in size during this session (not advice, not a recommendation).

The SOXX (short) Exit.

Yesterday, SOXS-24-16, was exited with an -11.6%, hit; so, everyone can see the effects of breaking one’s discipline (not respecting the position stop).

Don’t force the trade … sounds so simple.

Getting back to work, the XBI false breakout was recognized early and the trade opened.

Today, so far, we have follow-through, confirming the reversal.

Bonds Continue Lower

Bonds, TLT, are currently posting an outside-down (reversal) on the weekly timeframe.

The last time there was an outside-down on the weekly, was over two-years ago; week of August 5th, 2022.

After that, bonds declined a whopping 32% before (slightly) recovering.

Now, they’re posting outside-down … again.

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

Keep Eyes on Bonds

September 19, 2024 By in Bonds, Federal Reserve, Interest Rates, TBT, TLT 1 Comment

They’re Calling The Shots

Just like that, bonds reverse; rates higher (not advice, not a recommendation).

Now, it gets interesting.

The mainstream’s already covering; within hours (if not minutes) of the Fed’s move, saying if the economy ‘improves’ rates will have to move back higher; you can’t make this stuff up.

Rates are already ratcheting higher (chart below).

Long Bonds TLT, Daily Close

The pattern is clear; terminating wedge (not advice not a recommendation).

Pre-market action (as of 8:42 a.m., EST) has TLT, trading down (rates higher) – 0.84 pts or – 0.88%, giving further weight to potential (continued) downside reversal.

Fed Calendar

Looking at the Fed calendar, link here, it’s a very interesting date; ‘the day after’ November 5th.

Let’s see if the ‘rate cut’ is immediately reversed (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

What’s My (trend) Line?

September 18, 2024 By in Artificial Intelligence, Federal Reserve, Interest Rates, NVDA, SOXS, SOXS-24-16, SOXX

Nvidia Rachets Lower

Nvidia is trending down at a fast rate; anybody watching?

The mainstream ever bullish no matter what side, gives us this, link here.

Well, if we’re going to get an October surprise to the upside, it needs to happen soon (not advice, not a recommendation).

While we’re waiting for our ‘surprise’, let’s take a look at Nvidia’s repeating trendline characteristics.

Nvidia NVDA, Daily Close

The trendlines in the chart are exactly parallel.

If we’re in a trading channel, price action is currently at the far-right side (supply side).

The left side (demand side) channel line is a long way away, and down.

Note: After this post, NVDA, has not closed (or printed) higher.

Positioning

Now that Fed shenanigans are out of the way, mainstream conversation is bound to launch on another round of nonsense.

Let’s just hope we won’t have to keep hearing about it (like the rate cut) for another year, and a half.

With that said, short position on SOXX (via SOXS) remains intact: SOXS-24-16 (not advice, not a recommendation).

It too may have a trading channel. The plan is to cover the technical details 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

Biotech … Breakout or Fake-Out?

September 17, 2024 By in $SPSIBI, Biotech, Bonds, Federal Reserve, Interest Rates, LABD, LABD-24-17, SPBIO, TLT, XBI, ZeroHedge 2 Comments

The Bull & Bear Side

The last biotech trade (going short) was back in August, as LABD-24-17.

The trade posted a -3.6%, loss and from then, the decision was made to stand aside.

The sector was not validating its up-thrust (bearish) set-up discussed many times prior; price action itself, showed something else at work.

Fast forward to now.

At this point, we’re at (upside) resistance and threatening to break out; biotech has made the news, link here.

Biotech XBI, Weekly

“What do you see?”

Shown below is a wedge formation, the likely premise for all the hoopla in the linked article above.

Also shown, we’re just ticks away from a Fibonacci 38.2%, retrace of the entire move; February 2021 highs to lows, May of 2022.

Possibly as important, the volume (magenta arrow); where is it?

Where’s the volume (demand) for this underperforming sector, rising into some kind of (potential) breakout?

If there is a breakout, which could be as soon as tomorrow’s Fed announcement, price action will be monitored closely.

Bond Digression

The Fed does what the bond market tells it to do (not advice, not a recommendation).

From the last report, the potential downside reversal, was negated and bonds (TLT) are at their own breakout (up-thrust) level.

That being the case, probabilities favor a rate cut; finally, after 1.5 years of mainstream jawboning on the topic.

Back to biotech.

If we do get an upside breakout and it fails … we’ll cover the downside potential at that point.

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

Nat-Gas … Trend & Channel

September 16, 2024 By in Natural Gas, Oil, Oil & Gas, UNG, USO

Bottom Pattern, ‘W’

Nat-Gas is in a trend and potential channel.

Going back to this post, one reason given for continued lower prices in Nat-Gas, was the high price of oil: with Nat-Gas being a by-product of oil production.

Since that post, oil prices (USO) have dropped, and Nat-gas prices are on the rise.

Natural Gas UNG, Daily

The two dashed black lines are trend and channel.

There’s also a ‘W’ bottom formed; if broken to the upside, targets the ‘Measured Move’ as shown (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

CarMax … At The Edge

September 15, 2024 By in ALLY, KMX, NVDA, Semiconductors, SOXX, Wyckoff, ZeroHedge

Wyckoff Masterclass

Just twelve days from now, CarMax (KMX) reports earnings.

With that, we already have the backdrop of auto loan implosions; the cratering of Ally Financial (ALLY), link here.

Everybody seems to be waiting for used car prices to decline; conditions may now be in place to support an auto sector markdown.

Price action of CarMax supports the idea that lower prices, at least for KMX, may be just ahead (not advice, not a recommendation).

CarMax KMX, Daily

Right now, and similar to semiconductors, KMX, is testing the underside of resistance.

Numerous Wyckoff characteristics are shown.

First, the up-thrust, with a test.

Then, a decline that includes a wide (modestly) high volume bar; now being tested, as well.

Price action at this juncture, is at a Fibonacci 38.2%, retrace of the entire move starting from the August 26th, high.

Bear Market Characteristics

As with Nvidia and the SOXX, KMX, is posting wide bars, huge gap moves.

In the six-months of price action shown above, KMX, has oscillated in a range that’s 35%, wide.

This is not bull-market behavior.

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

SOXX at The Crossroads

September 14, 2024 By in Artificial Intelligence, NVDA, Semiconductors, SOXS, SOXS-24-16, SOXX, ZeroHedge 1 Comment

Decision Point

The SOXX, has reached a crossroads.

Shown in the chart below and similar to Nvidia (yesterday), the SOXX, is also at a potential inflection point (not advice, not a recommendation).

Maybe, it’s time to cue up the blues music; it could be an appropriate moniker for the road ahead.

Semiconductors SOXX, Daily

“What do you see?”

Below, what the market is saying about itself.

If this chart is in-effect, that is, if the market’s ‘respecting’ the trendlines and trading channel, we’re at the spot where one could ask, ‘Where to from here?’

As always, anything can happen and we could somehow, magically, power on higher; probabilities suggest not (not advice, not a recommendation).

Contra Indicators

If indeed, this past week was the infection point for Nvidia and Semiconductors as a whole, the euphoric ‘technology‘ conference, might go down as the most significant contra-indicator of the A.I., bubble (not advice, not a recommendation).

Let’s not forget, those in the know are cashing-out like there’s no tomorrow.

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