Author Archives: thedangerpoint

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

Carvana’s ‘Interesting’ Numbers

August 1, 2024 By in CVNA 1 Comment

Top Of The Squeeze?

Question: Who’s going to buy from Carvana, knowing they’re clearing over $7,000 profit on every sale?

The latest earnings release states they’re making Gross Proft per Unit, of $7,049, vs. a more reasonable $529, from just one year ago; that’s over 1,200% increase!

Months ago, after the last CVNA earnings release, the father/son team of CarEdge found the operating numbers to be very curious.

Carvana CVNA, Daily

Price action is at a new high, and hesitating (not advice, not a recommendation).

Volume for the day (thirty minutes before close) has increased.

MACD is posting a bearish divergence and price action appears to be holding right at resistance (blue line).

All of which indicates, we may be at The Danger 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

The ‘Squeeze’ That Didn’t

July 31, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-16, SOXS, SOXX, SPBIO, XBI 2 Comments

Biotech Refused To Play

During today’s Fed induced squeeze, one index was noticeably stubborn.

Biotech looked like it was going to play along.

However, as the regular session wrapped-up, biotech XBI, retraced, proceeding all the way down to close near its prior day’s close.

Biotech XBI, Hourly

The hourly chart shows the initial squeeze that didn’t.

The last hour had significant volume, indicating the potential for more downside at the next session (not advice, not a recommendation).

Contrast performance of leveraged inverse semiconductors SOXS, at a massive -20.21%, loss on the day to leveraged inverse biotech LABD, at just -0.34%, loss for the day.

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

‘Patterns’ … ‘Patterns’

July 30, 2024 By in GDX, GDXJ, Gold & Silver, Gold Miners, JDST, Richie Naso

Notes From A Master

‘Trade the pattern’, is what floor trader Richie Naso tells his students.

Taking that wisdom and applying it to the weekly chart of Junior Miners, GDXJ, what would be the appropriate action?

Junior Miners GDXJ, Weekly

At this point, GDXJ has posted what looks to be terminating wedge (not advice, not a recommendation).

Tomorrow is the long-awaited Fed announcement.

Let’s see what happens next.

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 Silver ‘Surprise’

July 26, 2024 By in DUST, GDX, GDXJ, Gold & Silver, JDST, JDST-24-05, SLV 1 Comment

Confusion Abounds

Looks like the silver wipeout took more than a few by surprise.

However, that’s not the real story.

Some of the comments on various YouTube ‘analysis’ sites are to the effect:

I don’t know what to believe. I don’t know what’s real.

The inference is, that silver ‘should’ have gone higher.

There was supposed to be some kind of massive breakout as we head into hyperinflation, right?

Track Record, vs. ‘Should’

Part of the reason for posts on this site is to establish a track record.

The silver analysis over the past four months is the best recent example.

That assessment never wavered; price action in SLV, is consistent with either an outright reversal, or sideways congestion (not advice, not a recommendation).

It is not consistent with a hyperinflation breakout.

Longtime visitors to this site would have least known that ‘something’s up’ with silver.

Its behavior does not fit the narrative.

Anything Can Happen

As always, the market can reverse and do something unexpected.

Price action could change character.

If so, the objective is to identify that change early, then assess opportunities (if any).

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

Metals … ‘Whacked!’

July 25, 2024 By in DUST, GDX, GDXJ, GLD, Gold & Silver, Gold Miners, JDST, JDST-24-05, SLV, UNG, UNG-24-11

Just Shocking

Especially shocking after having been subjected to non-stop delusion (now going on four months), and being ‘certain’ precious metals were headed higher.

Enough already.

Silver (SLV) is currently trading down a whopping -4.7%, in the pre-market session. Gold (GLD) is lower by about -1.2%.

Silver analysis has been consistent; SLV, price action itself, indicates a top and reversal or at best, sideways congestion (not advice, not a recommendation)

If one wants to review, starting back in April, we have:

Silver Top, Top Part II, Top Part III, Top Part IV, Top Part V, Top Part VI, Top Part VII, Top Part VII+, Stalls-Out

Now, this update essentially completes the process.

Silver, SLV, is about to open well below resistance as shown in the ‘Stalls-Out, update.

The Battle Against ‘Tik-Tok’ Brain

Fewer and fewer have a brain … like this (warning, profanity).

This guy sounds very much like the one in the ‘About‘ section. 🙂

Housekeeping: UNG, JDST

As can be inferred, a short trade via JDST, has already been opened: JDST-24-05.

Depending on today’s action, the stop listed is likely to be moved higher (not advice, not a recommendation).

Nat-Gas (UNG), on the other hand, is not behaving as expected.

The initial position UNG-24-11, was reduced by 80%, as a result of yesterday’s action. It’s likely that position will be closed out completely during this session (if not already).

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

Miners Give Up The Bull

July 24, 2024 By in GDX, GDXJ, Gold & Silver, Gold Miners, JDST, JDST-24-05 1 Comment

Sucking Air … At The Top

For years, the strategic assessment of the miners (on this site) has been consistent. That is:

‘The precious metals mining sector (gold/silver) are not in a sustained bull market (not advice, not a recommendation).’

From that post nearly four years ago, the Juniors, GDXJ, are still over -22% below that price 🙂

The chart shows the Juniors GDXJ, have pushed above resistance in an apparent breakout that has failed.

Junior Miners, GDXJ, Daily

We’ve had the Up-Thrust, and now today, was the test.

If one is short this sector via JDST, a reasonable stop would be the session low of today @ JDST 30.25 (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

Targeting, Taiwan Semi (TSM)

July 23, 2024 By in Semiconductors, SOXS, SOXX, TSM, Wyckoff

Once A Trend Is Broken …

According to Wyckoff principles;

‘Once an up-trend is decisively broken, the market will (typically) attempt some kind of rally to test the break’.

Looking at the daily chart of Taiwan Semi, TSM, there’s no doubt the uptrend has been broken.

Taiwan Semi, TSM, Daily

The amount of (daily) down-force exhibited on the July 17th, trend-break, was the most ever for TSM.

With such a massive down-force, we’re in uncharted territory. The test, if it comes can complete at any level.

Currently as of 1:25 p.m., EST, TSM is trading at 170.6, near the 23.6%, retrace.

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