Author Archives: thedangerpoint

Biggest Bull Trap, in History ?

February 3, 2023 By in $SPSIBI, Biotech, IYR, LABD, Real Estate, SPBIO, Wyckoff, ZeroHedge 8 Comments

Slow Descent, At First … Then, Mass Sell-Off ?

The large number of VIX (volatility) Calls, tells us, not to expect an immediate sharp move lower.

Those Calls will likely need to be bled-off in value, before we get a significant downward spike … if there is one.

Market Summary, Watch List

Over the past week, there are two markets that are being monitored for short position entry: Real Estate and Biotech; IYR, and SPBIO, respectively.

After nearly five months of price action whipsaw and congestion, biotech appears to be in a nascent downside reversal. Real estate looks to have reversed today (not advice, not a recommendation).

Biotech has been the weakest (technically) of all the major indices (except miners, GDX and GDXJ).

We’re going to look at the daily chart of SPBIO, to see the opportunity and the risk.

Biotech SPBIO, Daily Close

Since late September last year, there has been sideways-to-up, price action congestion.

Price action today, appears to have resolved into a nascent reversal.

We’re going to invert the chart to mimic the leveraged inverse fund LABD, showing the opportunity and the risk.

SPBIO, Daily Close (Inverted)

The prior two days of Fed induced bullish short-covering hysteria, have resulted in a decisive penetration of the support level, as shown.

By definition, this puts us in Wyckoff ‘Spring Position’; be on guard for a potential reversal.

Positioning

There have been many false starts to this sector’s reversal as evidenced by previous posts.

However, today’s action is consistent with resolution of the five-months of congestion (not advice, not a recommendation).

Every trading/speculator has their own style and this site does not give financial advice.

With that said, a (highly leveraged) short entry via LABD, would have a hard stop at today’s low.

At present (2:15 p.m., EST) and entry at LABD 12.91 would have a stop at 12.45, yielding a ‘risk’ of 0.46-pts.

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

Et Tu, Biotech ?

February 2, 2023 By in $SPSIBI, Biotech, LABD, Wyckoff 3 Comments

Biotech SPBIO Joins The Ranks In ‘Danger’

The clock is ticking for biotech in so many ways. Now, one more event.

Shown below is an inverted chart of biotech sector SPBIO.

While all the major indices have posted a bear market rally above their 200-Week moving average (except the miners), the SPBIO, has remained firmly below those levels.

Now, today, we have a decisive penetration of resistance as shown on the daily below.

The chart has been inverted to mimic the 3X Leveraged Inverse Fund LABD.

So, ‘resistance’ now becomes ‘support’ on the inverted chart.

Biotech SPBIO, Daily (Inverted)

We’ve penetrated ‘support’. Therefore, we’re in Wyckoff ‘Spring Position’, ready for reversal.

Even as this post is being created (2:25 p.m., EST), LABD is coming off its lows; currently trading at LABD: 12.61

A push back above support (approx. LABD 14.00 area), would indicate the spring reversal, is underway (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

Historic (Downside) Potential

February 2, 2023 By in 2007 - 2008, DRV, IYR, Real Estate, SRS, ZeroHedge

Momentum Stretched Like ‘Never Before’

How do you know it’s a bear market bounce?

Take a look at the long-term chart of real estate IYR, below.

From a historic momentum standpoint, we’re at ‘never before’ levels.

The chart puts it in perspective.

Real Estate IYR, Weekly

MACD momentum is stretched to (nearly) off the chart.

In the zoom version below, note how MACD histogram made lower lows in 2022, and then immediately launched to an historic extreme in January.

It’s potentially the largest short squeeze in IYR, trading history.

What that means; when we finally get a decisive reversal (possibly this week) the downside potential is enormous (not advice, not a recommendation).

Old vs. New ‘Investor’

Here’s a good read on the differences between those who learn and those who do not.

A paraphrased quote:

‘Whatever bad scenario you can imagine, reality can be far worse.’

In the next update, and depending on price action for the day, we’ll discuss how you author is (or plans to) positioning for the downside in IYR.

It’s about five minutes before the open and IYR, is trading slightly higher.

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

Do Not Pass ‘Go’

February 1, 2023 By in 1929, Dow 30, Great Depression, Great Depression 2.0, Greater Depression, IYR, Michael Cowan, Real Estate, Speck-Effect, The Speck, ZeroHedge

Do Not Collect $200

Go Stright To Economic ‘Depression’

And, that’s where we are ladies and gentlemen.

Provided many times on this site, the assessment we’ve gone straight past recession and directly to: ‘The Greater Depression’, or ‘The Great Depression 2.0’

By now, we’re all aware of this data, just out from ZeroHedge.

That data is at the ‘peak’ or the depths of 1932, and we in our current market, haven’t even got started!

‘Entertain Me’

YouTuber, Michael Cowan, has picked up the story.

You can hear the frustration in his voice (time stamp 1:31) as everybody seems to be waiting to be ‘entertained’ with a crash before they do anything.

It’s a good thing we’re not part of that ‘crowd’, right? 🙂

Lions and Tigers and The Fed, Oh My!

The Fed’s interest rate announcement is due out at 2:00 p.m., Eastern, today; does it really matter?

We can see with unbiased observation; the wheels have already, irrevocably, been set in motion.

The economy along with the ‘elephant’ that no one talks about, are juggernauts on a downward course.

The 1929 Crash, Then Bull Rally

Remember, the big market speculators of the early 1900s typically made their fortunes on the way down (not advice, not a recommendation).

Let’s also not forget, one of, if not the largest market rallies up to that time (in percentage terms), happened right in the middle of The Great Depression.

Chart by macrotrends: www.macrotrends.net

Of course, to trade that mid-1930s rally, you had to have the capital to do so.

Which brings us to the next topic: Real Estate.

Real Estate IYR, Weekly

With yesterday’s new print high, we’re at Fibonacci Week 34. That puts us at a potential trading channel or inflection point as discussed in this post.

There’s no guarantee of a trading channel or even a reversal.

However, we do have a confluence of events; upside volume (pressure) declining, marginal new highs and the potential Fed pivot point, due out today.

It’s about 20-minutes before the open. 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

Chevron’s Short Status & Forecast

January 31, 2023 By in CVX, Dr. Elder, Oil & Gas

Options Trade Update

The Put entry on Chevron CVX, was admittedly, late to the party.

From a trading and strategy perspective, when CVX, announced its ‘buy-back‘ program, that was the appropriate time to go short (not advice, not a recommendation).

With that in mind, the Put option detailed in the above link was closed towards the end of yesterday’s session.

Chevron could still collapse from here and that may ultimately be the outcome.

However, before that happens, as shown below, the more probable event is to come back up for a test of underside resistance.

Chevron CVX, 4-Hour

Note how thrust energy (blue arrow) to the downside is dissipating.

The chart below shows a potential outcome, if (and it’s a big if) CVX, is still in a significant reversal.

Examples presented on this site are just that: Examples

They show one “old-timer’s” perspective on the market and current events.

The examples can be used (or not) to aid in understanding market behavior or to show a different perspective on how to approach the current environment.

To paraphrase Dr. Alexander Elder:

‘There are many ways to make money in the markets … and even more ways to lose it’.

It’s about 20-minutes before the open. 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

Real Estate … Ready for Reversal

January 29, 2023 By in 1929, Federal Reserve, Great Depression, Holiday Turns, IYR, Jerimiah Babe, Real Estate, ZeroHedge 1 Comment

Unrelenting, Down Data

‘The economy has already collapsed’.

That’s from Jerimiah Babe and is likely, correct.

Recent data-points supporting the case for ‘collapse already in progress’, are below:

American’s spending drops … again.

Pending homes sales worst annual decline … ever.

There are nine other supplemental data points for the economic mayhem, collapse, collapse-in-progress scenario; they are listed at the end of this post.

For now, we’re talking about real estate and specifically the proxy for the sector, IYR.

Real Estate IYR, Weekly

As stated in the last post, we’re going to follow-up with a potential IYR, downside reversal by covering three more technical points; Fibonacci time correlation, thrust energy and trading channel.

First up: Last week completed a Fibonacci 34 (-1 week) time frame that may result in a reversal into a trading channel (shown on second chart).

Upward force (Thrust Index) declined significantly over the prior upward push during the week of 1/13/23.

The weekly chart has been compressed and trading channel lines added.

Internal trendlines are printed as grey dashed lines.

As shown, we’re at ‘Week 34 (-1)’.

If this market’s in reversal and adhering to a Fibonacci time sequence, we could see an immediate reversal or another minor high next week to make it an even 34 or go one additional week to make it 34 (+1) weeks.

Either way, we’re at The Danger Point®

The 1929 – 1932 Trading Channel(s)

Here’s a bit of insight you’ll not find anywhere else.

Research and data gathered by my firm, has shown markets tend to reverse just before, during, or just after a Holiday Week.

In our case below, The 1929, all time high was 379.61, posted on September 4th; the Tuesday following the Labor Day Weekend.

The final low and subsequent reversal was 41.81, posted on July7th 1932; the Thursday following the July 4th Holiday:

Enough Said.

Chart provided by macrotrends @ www.macrotrends.net

There are at least three main trading channels in effect for the entire (nearly) three year down move.

Trading channels are an old and repeating characteristic of the markets.

Real Estate Re-Cap

The all-time high in real estate IYR, was 116.89, posted on December 31, 2021, the Friday before the New Year’s Weekend.

Since then, there have been several trading channels in effect; at this juncture, we may have yet another.

With the data links provided at the beginning and the links at the end of this post, sustained price action to the downside is more probable (not advice, not a recommendation).

This coming week is likely to be quite interesting as the Fed continues on its path of price and demand destruction.

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

Addendum

Congratulations on reading this far. You must be serious about your work. Supporting data for the bearish case is below.

Housing data stabbed in the heart.

Blackstone redemption limits

Population set to collapse or is already collapsing.

Real estate fire sales … just the tip?

Home sales biggest annual drop.

New ‘protections‘ affecting the market?

Copper prices at record highs.

Pilots with bad hearts? No problem.

Where did all the workers go?

Real Estate’s Potemkin Village

January 28, 2023 By in Federal Reserve, IYR, Prechter, Usual Suspects, Wyckoff, ZeroHedge 1 Comment

The ‘Pain Trade’ = Opportunity

‘Some of the best market traders are former Marines.’, Prechter

That’s a paraphrased quote from Robert Prechter Jr., given during an interview in the early 1990s.

The inference: Marines succeed at trading because they have been conditioned to endure and perform while being in pain … physical and mental.

On the other hand, the financial press, being ever so helpful during this unprecedented collapse, is all too happy to help analyze the situation by catastrophizing on how ‘painful’ the market feels.

We’re going to be ‘bathing in lava‘, according to them.

If we go to Jerimiah Babe at time stamp 1:36, the mainstream press is still touting ‘The consumer is strong’.

In other videos, Babe, has shown how devastated the real estate market really is … ‘boots on the ground’ reports at vacant malls, empty parking lots and new (unoccupied) housing developments that stretch for miles.

With that backdrop, let’s look at what the price action of real estate is telling us … is the consumer strong?

Real Estate IYR, Weekly

There are so many things happening in IYR, it will probably take several updates.

At this point, price action exhibits the following:

Currently in Wyckoff ‘Up-Thrust’ condition, potential reversal

On a close basis, IYR has retraced 38.2% of its entire move.

Repeating trend line(s) underside test.

Trading channel that’s a Fibonacci 34 (-1) weeks wide.

For the week just ended, Force Index is divergent (54.7%, weaker) than the last push higher.

We’ll look at the first three of those, below.

As the market came to a close on Friday, price action pushed through established resistance (and axis line) to end the week higher.

Price action’s in Up-Thrust condition, The Danger Point®

Next, we have on a close basis, a Fibonacci 38.2% retrace as well as testing the underside of a resistance/trend-line.

In the next update, we’ll discuss the possible trading channel and the pressures (Force Index) behind the last move higher.

There Will Be Great ‘Wringing Of Hands’

As always, anything can happen in the markets. The above is not advice or a recommendation.

Next week, we can expect the Usual Suspects to come out and provide their ‘expert analysis’ on what the Fed is likely to do or not.

The Fed on the other hand, has repeatedly said what’s it’s going to do; that is, raise rates.

Interest rate sensitive real estate already appears ready for reversal.

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 Chevron Crack-Up

January 27, 2023 By in CVX, Dr. Elder, Oil & Gas 1 Comment

A Long Way Down

The breakdown in Chevron (CVX) could spell real trouble.

The Oil & Gas Sector has already been covered extensively over the entire month of January.

Prior posts are here, here, here, here, here and here.

Some of the analysis was negated by subsequent price action and some of it not. This is the way of the markets.

However, the main theme was, this sector’s at an extreme, at risk for a major, swift and sustained downturn (not advice, not a recommendation).

Additional data that indicated extremes, including the Chevron (CVX) buy-back are below:

WTI ‘Cushing‘ Build Report

Investors ‘surge‘ back into oil.

Events like this, tend to indicate the end of a move.

Then today, Chevron (CVX) cracks.

In keeping with Elder’s method of trading options, as was done with the Delta Airlines (DAL) trade, the chart is documented below.

Note: The Delta Put expired with no revenue on the trade. This is how the method is implemented. Many small losses that are peppered by a significant gain (not advice, not a recommendation).

Chevron CVX, Daily

Over the next week, CVX could get ahold if itself and stabilize … or it could completely fall apart (not advice, not a recommendation).

We can already see, it appears to have posted a double top with a swift reversal.

Probabilities favor the downside.

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

Oil & Gas … Reversal ?

January 24, 2023 By in DRIP, NEM, Oil, Oil & Gas, Wyckoff, XOP 1 Comment

Yesterday, Was ‘Day 13’

Monday was Fibonacci ‘Day 13’ from the January 4th, XOP, lows.

With about fifteen-minutes before the open, pre-market action in the XOP leveraged inverse fund DRIP, is trading slightly higher at 12.67.

So, was yesterday the day? Has XOP topped-out and now in the process of reversal?

As always with the markets, the price action itself, will show us the truth.

However, what can be stated with some confidence, is that we’re at a low-risk point for going short (not advice, not a recommendation).

‘Low-risk’, does NOT mean ‘no-risk’

XOP, New Low or New High

It’s somewhat straightforward at this point.

If XOP, posts a new daily low, it increases the probability of reversal. If it posts a new daily high, then price action is possibly on to new all-time highs.

Oil & Gas XOP, Daily Close

The daily chart shows the labored six weeks of rounded top that’s identified as ‘Up-Thrust’.

At present, XOP is testing the underside of that Up-Thrust.

The zoom version of the chart shows the amount of upside effort expended during the rounded top.

Price action spent over a month attempting to move higher, only to collapse into a downside reversal.

Now, we can see that wide price action area is being tested; not unlike the Newmont test as described here.

It’s what the market does.

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

CORN … On The Edge

January 22, 2023 By in Corn, Derecho, Genesis 41, ice-age-farmer, Teucrium, Wyckoff

Waiting, For The Next Chess Move

In chess, most (if not all) opens and responses have a name:

‘Danish Gambit’

‘Cochrane Gambit’

‘Petrov Defense’

‘Scotch Game’

‘King’s Gambit’

It’s been nearly one year, since discussing a potential corn trading strategy; during that time, the strategy remains in effect (not advice, not a recommendation).

We’re still waiting for a chess move from the ‘other side’.

Keeping in concert with traditional opening moves as named above, we’re going to name our set-up as follows:

‘Potato Head Gambit’

That is, an ‘administrative’ move which temporally puts the corn futures market into chaos. A move similar to Carter’s grain embargo of the 1980s.

The weekly chart of tracking fund CORN, shows us something’s about to happen.

Either we get a breakout … or breakdown.

Teucrium Corn Fund, CORN, Weekly

The ‘Derecho‘ is marked as it was the kickoff to the current structure.

A wedge has formed.

A breakdown puts CORN, at a measured move in the vicinity of 18.0; a breakout to the upside, measures approximately to 38.0.

From a trading perspective, a breakdown is preferred.

Price action pushing lower to the 18-area, puts CORN below well established (support) lows of 2021.

A penetration of those lows would (potentially) put CORN in Wyckoff Spring Position.

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