Author Archives: thedangerpoint

‘Right’ & ‘Wrong’ Answers

August 13, 2024 By in DRIP, DRIP-24-01, DRV, DRV-24-02, IYR, Oil & Gas, Real Estate, Wyckoff, XOP 2 Comments

Lead By Example

Every day, the tape prints one more clue to the next probable direction.

The next probable direction.

Part of an experienced speculator’s pre-market prep is to know from the prior session, the ‘correct’ answer for the current session.

That is, if a set-up has materialized, then subsequent price action will have a specific or variation of a specific pattern.

If the pattern posts on the tape, we have the ‘right’ answer. If not, probabilities are saying ‘no’ at this point.

Of course, the hard part and according to Wyckoff, it laterally takes many years of observing and working with price action to know what to expect.

Real Estate, ‘Wrong’

This morning’s session in real estate, IYR did not post the ‘right’ answer from a short standpoint. A lower open and lower print was the expectation.

Therefore, DRV-24-02, was exited with just over a 2%, loss (not advice, not a recommendation).

However, oil and gas XOP, gave the ‘right’ answer.

Oil & Gas XOP, Daily

The circled price action is what we’re looking for (not advice, not a recommendation).

There’s a lot going on with this chart.

If XOP continues lower and short, DRIP-24-01, is not stopped out or exited, we’ll re-visit this action with further updates (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 herexop

Real Estate … Tops-Out?

August 12, 2024 By in Dr. Elder, DRV, DRV-24-02, FAZ, FAZ-24-01, Financial Sector, IYR, Real Estate, XLF, ZeroHedge

Series of Lower Highs

Real estate may have been held up by the expectation of lower rates.

With those rates, it’s been on-again, off-again, then back on again, only to go back off again.

Let’s not forget the real possibility, the entire dataset (employment, jobless claims et al.) could be fake. 🙂

So, it’s a good thing with Wyckoff, we’re not looking at so-called ‘data’ but the truth; the price action itself.

Real Estate IYR, Daily

We’ve got a series of lower highs.

No doubt, the price action is very subtle … slowing eroding away without much fanfare.

With this morning’s session, we have a new daily low.

If short, a good place for a stop would be yesterday’s high (not advice, not a recommendation).

Housekeeping.

From the last post on XLF, today’s session has essentially been a combination of the two scenarios.

As a result (and according to the trading plan), the short FAZ-24-01, was closed with a marginal profit of 0.62%.

The sector may still go into a sustained decline. However, it did not perform to expectations and therefore, exited.

As Elder said years ago, ‘when in doubt get out.’

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

When To Go ‘Short’

August 11, 2024 By in Ed Dowd, FAZ, FAZ-24-01, Financial Sector, Kitco News, XLF 1 Comment

Buy or Sell at The Danger Point®

While the financial press (pictured at left) is fumbling around, trying to figure out if the market’s up or down, for this site it’s not about ‘up’ or ‘down’, but what the market itself is telling us.

Case in point, this past week.

Remember, at the beginning of the week, major brokers blew-up and locked up.

You couldn’t log-on whether long or short.

Surprising Speed

Posts on this site gave numerous clues (prior to last Monday), that we’re at risk of a downturn.

Two examples of potential downside were August 1st, Carvana’s ‘Interesting’ Numbers, posted here; the next day, Correction … or … Crash? posted here.

All released well before the Monday, August 5th, wipeout.

One thing to note as Ed Dowd points out (link here) is the speed of the downdraft.

Was this past Monday’s market action (and brokerage blow-ups) part of the new paradigm, the new normal?

With that, let’s take a look at what’s likely to happen (or set-up), next. The last post showed a potential short sale set-up (not advice, not a recommendation).

Finance Sector XLF, Daily

If price action continues higher, shown as the inserted back bar, the plan is to stand aside or exit, if short (not advice, not a recommendation).

Next, if we get downward action posting a new daily low, shown as the magenta bar, that’s a potential short entry (not advice, not a recommendation).

Of course, not shown is the scenario where the market does nothing and remains flat.

Based on last week’s hysteria and this additional update from Ed Dowd, link here, markets doing nothing seems to be the least likely outcome.

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

So, Monday Never Happened …

August 9, 2024 By in $SPSIBI, Biotech, FAZ, FAZ-24-01, Financial Sector, SPBIO, XBI, XLF 1 Comment

Losses For The Week, Erased

Monday’s losses were (mostly) recovered by the close on Friday.

One might be inclined to think we can all get back to ‘normal’.

Normal, like rigged elections, poking the bear (expecting nothing bad to happen), attempted assassinations, fake data, falsifying employment records, more ‘visitors’ flooding in, you know, normal.

However, for anyone paying attention, the charts say we’re at The Danger Point® (not advice, not a recommendation).

The potential for biotech XBI, has been covered over the past few days (here and here), but we also have another potential set-up; the finance sector, XLF.

We’ll cut to the chase, with the chart.

Finacial Sector, XLF, Daily

It’s important to note: It was four days of retrace (upward) into the test; each day had less volume than the day prior.

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

A Tale of Two Scenarios

August 8, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-16, SPBIO, XBI 2 Comments

One Up … One Down

No sooner had price action appeared to confirm a breakaway gap (link here), than today, it begins to threaten closing that gap.

With that said, we’ll look at two most likely scenarios for the coming session(s).

Biotech XBI, Daily

If XBI, manages to close the gap, it puts price action into an up-thrust condition as well.

A lower print keeps the breakaway gap intact and hints at much lower levels to come (not advice, not a recommendation).

Housekeeping

Short trade LABD-24-16, has been closed: Total Profit just over 11%.

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

Breakaway Gap … Biotech

August 7, 2024 By in $SPSIBI, Biotech, Bonds, Interest Rates, LABD, LABD-24-16, SPBIO, TLT, XBI 2 Comments

‘Today Was The Day … ‘

If there was a day to attempt a close of the (August 2nd) gap in biotech (XBI), today was that day.

With the higher open, supposedly from an interest rate policy reversal in Japan, link here and here, there appeared to be plenty of upside momentum for higher prices.

It didn’t happen

Instead, XBI posted a new daily low, painting that gap as a downside breakaway (not advice, not a recommendation).

As noted in other updates, failed moves are the most telling, getting focused attention from ‘The Street’.

Biotech XBI, Daily

The breakaway is noted.

In addition, trendlines have been updated.

The market could somehow recover and close the gap.

However, with the poor bond auction, pointing to no rate cut or even a rate increase, probabilities suggest more downside for XBI (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

Brokerages Blow Up

August 5, 2024 By in $SPSIBI, Biotech, Dollar, Dr. Elder, LABD, LABD-24-16, SPBIO, UUP, XBI 1 Comment

Positioned Ahead of Time

Developing a trading plan that accounts for broker outages, blow-ups, and platform lockups, was presented on this site, as early as December of 2020.

Back then, we had this:

“Built into that [system] approach is recognition there will be market outages, trading halts, communication interruptions and natural disasters.“

“The one thing that may separate this site from others, these (potential) events are taken into account.“

Fast forward to now.

Those events are not ‘potential’ anymore, but a reality.

Note: Before leaving that post, from December 2020, let’s not forget, the dollar reversal (and rally) discussed, is still going, nearly four years later!

That’s what’s meant by ‘a strategic, engineering perspective’ (see About).

Moving on to the topic at hand.

The last update showed potential trendlines in biotech, XBI.

As a result of today’s action, we’re revisiting the post with new information.

Biotech XBI, Weekly

As Dr. Elder said years ago, ‘trendlines are not made of glass’. Trendlines are more like a wire fence; the market can attempt a breakout that may ultimately get negated.

With the weekly XBI, that may be the case.

We’re about one hour before the close, only one day into the trading week; it’s pre-mature to say XBI, will finish the week (or even the day) inside the trendline shown above.

However, if we do end the week lower, it may be a serious bellwether; XBI could be in deep kimchi (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

Stop … Drop … Trend

August 4, 2024 By in $SPSIBI, Biotech, David Weis, LABD, LABD-24-16, SPBIO, Wyckoff, XBI 3 Comments

Early Signals

It’s never too soon to look for a trend.

The daily chart of biotech XBI, may be showing us early signals of a trend as well as trading channel.

Back in the day, when being mentored by David Weis, he would typically start the session by putting up a chart on his computer (with me logged in remotely) and then ask:

“What do you see?”

More importantly, he did not ask, what I ‘thought’ or what the Fed was doing, or any other mainstream form of distraction. No, it was always “What do you see?”

So, we’ll do the same.

Biotech XBI, Daily

We’re moving in close with the (un-marked) 3-month, daily; what do you see?

Two things should be noticed almost instantly.

Frist: Heavy volume at the last session this past Friday.

Second: Price action (the close) is hanging in ‘mid-air’ with the next support level over two-points away, near 94.0.

Now, for the marked-up charts.

We’re using the ‘reverse’ trendline technique, presented in the Weis video to determine a potential right side trendline (black dashed line).

Next, we have the Up-Thrust on the daily which is also the right side of the ‘double top,’ shown on the weekly.

Taking both timeframes together, implies a significant inflection point (not advice, not a recommendation).

Anything can happen and the market could recover at the next session.

We’re below support (now resistance) and therefore, technically, in Wyckoff ‘spring’ position.

However, probabilities indicate we’ve had a downside pivot of some significance. That, along with heavy volume at Friday’s session would imply follow through at the next session (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

Positioned For Trouble

August 3, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-16, SOXS, SPBIO, Wyckoff, XBI, ZeroHedge 1 Comment

When The Tide Goes Out

We all know the quote attributed to Buffett:

‘When the tide goes out, that’s when you find out who’s been swimming naked’.

Or, to put it another way:

‘Everybody’s a genius in a bull market’.

Well, ladies and gentlemen, here we are.

We’re about to witness what method’s best suited to handle typical ‘price destruction’ behavior of a bear market (here and here) along with possible chaos in commodities.

That challenge also includes this site of course.

Bear Market Behavior

If we’re really entering a bear market, prices typically do not go straight down unless there’s an outright crash.

No …Bear markets are all about what’s called ‘price destruction’.

That is, price action whipsaws a near infinite number of times; getting into (a short) position for the downside or (long for) an upside squeeze is incredibly difficult.

The most recent example of this was the volatile whipsaws in 3X leveraged inverse fund, SOXS:

Swings over +/- 20%, back-to-back in days if not hours.

With that said, we’re looking at biotech XBI, to see if there’s a chance of it being ‘well-behaved’ during a decline (not advice, not a recommendation).

Biotech XBI, Weekly

On a weekly close basis, we’ve had a double top.

Using the MACD, it shows momentum weakened on the leg up to the second top.

Watching price action (the tape) of XBI late Friday, near the close, it gave the appearance of short covering.

Upward spikes that appeared to be labored.

If that’s true, then a lower open at the next session would be the expectation (not advice, not a recommendation).

Taking Action

As the disclaimer states, this site is ‘not certified’ by the SEC and does not, cannot provide any advice.

What it can do, is infer the actions being taken.

With that said, this update shows the ‘category’ side bar with LABD-24-16, thus inferring a short position via LABD.

That’s the firm’s identifier used for spreadsheet tracking; the 16th biotech short via LABD, for the year.

Never Too Early, To Trend

In the next update, we’ll discuss how even in the early stages of (potential) XBI reversal, we may already have a trendline.

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

Correction … or … Crash?

August 2, 2024 By in 1987, Artificial Intelligence, Biotech, Bonds, Corn, Federal Reserve, Gold & Silver, Natural Gas, TLT 1 Comment

1987, Deja Vu

Insane, delusional valuations, high interest rates, no rate cut.

What could go wrong?

Visitors to this site already knew that ‘something’s up’.

Fully documented well in advance of today, was the A.I. bubble reversal, silver reversal, biotech reversal, and commodities like corn and Nat-Gas continuing their sustained decline.

Now the market hysteria is resulting in the typical knee-jerk, ‘flight to safety’ to the bond market (not advice, not a recommendation).

Surely, with all of that, the Fed will cut rates, right?

For the (potential) answer to that question, let’s look at the bond market.

Long Bonds, TLT, Weekly

Already proposed on this site, the Fed does not lead the bond market and interest rates, it follows it (not advice, not a recommendation).

So, what’s this chart telling us?

If the market continues its decline in the coming weeks, TLT price action itself shows a potential for higher bond prices (lower yields).

We’re just over six-weeks away from the next Fed meeting.

Fed Follower?

If the Fed is still a follower, not a leader and if bond (TLT) prices reach the target just as the September meeting is held, then, one would expect a rate cut (not advice, not a recommendation).

Important to note, if TLT gets to the target area, it’s in Wyckoff Up-Thrust (potential reversal) position.

Economic Air-Pocket

If there is a rate cut as a result of the leading action of the bond market and then it reverses to the downside (rates higher), that’s when it would get real interesting.

Correction or crash; we may have to wait until September to find out (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