Crypto Contagion …”Contained”

Where Have We Heard That, Before ?

Is the Genie out of the bottle?

For those who weren’t around for the last melt-down, here’s a brief refresher; links here and here … enjoy.

Of course, the amount of real damage and interconnecting links, are not yet fully known … data is still forthcoming.

However, the backpedaling has already started … ‘Let’s rebuild‘.

How about, ‘Let’s get real.’

As Michael Cowan has said: ‘This is like Lehman, but for Crypto’ … ‘Over $2-Trillion has been destroyed, just like that!’

We’re still in the destruction phase. Any ‘rebuilding’ whatever that means, is probably years down the road.

Those In The Know

Wyckoff said a century ago: ‘Somebody always knows something, and that ‘something’ shows up on the tape’.

This is where understanding price action is critical.

We in the Serfdom, won’t know the details until long after the big players have cashed out or have been bailed out.

Why would it be any different than last time?

However, their moves will show up on the tape. That will provide clues on how or where to take action (not advice, not a recommendation).

The Elephant

All of this is happening on top of there being an elephant.

For those who somehow still don’t know what’s going on, here’s just one report, among many.

Positions: (courtesy only, not advice).

It’s just after the open (9:40 a.m., EST) and both positions listed below, have opened higher.

LABD-22-10:

Entry @ 18.1398: Stop @ 16.83

JDST-22-05

Entry @ 9.1666: Stop @ 8.79

Note: Positions may be increased, decreased, entered, or exited at any time.

***, Indicates change

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

ProLogis … Real Estate Proxy

The Work Has Already Been Done

This is how it pays off.

Work was done months ago, on ProLogis (logistics/warehouse, real estate) which at the time, was the largest cap in the IYR.

It’s now No.2, just behind AMT, but the effort is still valid.

From that post last May, the behavior of ProLogis during a bear market was summed up with the following:

“It’s straightforward.

Using 2008 – 2009, timeframe as the proxy, PLD was vaporized; straight down for two-months.”

Well, that was back in ’08 – ’09.

Let’s see how our ‘vaporization’ is going now.

ProLogis PLD, Monthly

Price action is at support.

Downward pressure is immense.

We should all be able to agree, this time is worse than last time (’08 – ’09).

There’s no money left for a ‘save’, and our chief cook and bottle washer, the Fed, seems to be on a different agenda.

So, let’s remind ourselves of the potential for this down-move should it come to fruition.

The weekly chart of PLD, and distance traveled below the 200-wk Moving Average, gives us a sense of the enormity.

ProLogis PLD, Weekly

To position for a potential event, there may be plenty of time, or no time.

Either way, when things really get started to the downside, confusion, panic, locked-up brokerages, internet outages, will likely be the norm.

Positions & Current Stance (courtesy only, not advice).

The following is the positioning of my firm’s main (largest) account.

DRV-22-04:

Entry @ 66.463, Stop @ 63.98

ZSL-22-01:

Entry @ 28.08, Stop @ 28.53***

***, Indicates change

Note: Positions may be increased, decreased, entered, or exited at any time.

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 ‘Crash Channel’

Not Saying That Lightly

For real estate, the crash may be happening as we speak.

Even if it’s not, the sector (IYR) has developed an aggressive trading channel as we’ll see below.

First, we’ll look at ‘big picture’ potential on the weekly chart.

Real Estate IYR Weekly

The distance traveled from the 200 Week Moving Average during the crash of ’08 – ’09, is shown.

That same distance is projected on the current situation.

Everybody’s ‘looking for the bottom’ … well, there it is. 🙂

Of course, that’s only a potential bottom.

Where it gets really scary is the channel that’s been confirmed on the daily chart, shown below.

The zoom version shows the weak blip higher … potential short covering that looks complete.

One caveat is that as (or if) IYR price action approaches the lows, technically speaking, it’s a support level.

That’s the time to watch the right-side channel line to see if it’s penetrated, thus negating the aggressive downtrend.

Positioning

Everyone has their own style and this is NOT financial advice.

However, a short was initiated early this session in Leveraged Inverse Fund DRV, labeled DRV-22-04.

Opened @ 66.4633, with a stop at session low, 63.98

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

Bear Market Bounce

And Then … It’s Gone

How do you know it’s a bear market?

Sharp up moves like yesterday, only last one day … if that much.

We’re talking specifically about the bond market and the BOE announcement … the effects of which have already faded.

It feels like the 2008, meltdown only 10-times larger.

Remember, there’s no money left to save it (the market) this time.

Yesterday’s update discussed the potential for biotech SPBIO, to rally … which it did.

However, when looking at the daily close chart of SPBIO ($SPSIBI) below, we see that price action stopped right at the confluence of two trend-lines.

Biotech SPBIO, Daily Close

Next, we’ll look at the leveraged inverse fund LABD.

It was a stiff whack downward; then again, price action is confirming a trend … and potential channel.

SPBIO, 3X Leveraged Inverse LABD, Daily

The lower trendline does not look like much.

However as noted, it’s rising at approximately + 5,900%, on an annualized basis.

Summary

It’s 15-minutes before the open and LABD, is up about +3.87%, in the pre-market.

For today, the lower trendline is the one to watch.

A decisive break (and close) below this line signifies the current move is over and there’s something else at work.

Positioning

Yesterday, the LABD-22-05, position was reduced by about 8.5%, to maintain margin requirements (not advice, not a recommendation).

As has been an on-going plan for this trade, position size (in LABD) will be increased as the market allows (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

The ‘Santa Claus’ Rally

That Was it!

It’s going to be a very different place come December.

This won’t be like ’08 -’09, where all the stops are being pulled to ‘rescue’ the market.

No, this time really is different.

We can all see by now; the plan is controlled demolition.

Paraphrasing Jerimiah Babe, and Pinball Preparedness, we haven’t even got started (with the collapse) and the public’s already folding up.

What’s it going to be like when it really hits?

This past week, all the major indices have gone through some type of relief rally. Call it a Santa Claus rally because there probably won’t be one this December.

Trading Consistency

Throughout this upward correction, the case has been made over and again, only biotech SPBIO’s in a technical (and fundamental) condition that would allow it to decline farthest and fastest (not advice, not a recommendation).

Wyckoff analysis along with Livermore’s strategic approach that’s coupled with Loeb’s ‘focus’, has led us to (shorting) this sector exclusively.

Strategy, Tactics, Focus

Biotech SPBIO, Weekly Close

Looking at the far-right side of the chart, SPBIO rallied this past week. It looks like it may head higher … that is, until we put in the trend-lines.

Now, let’s put in the trendlines.

Extended trendlines show the downside potential.

We’re about to see how this works out.

Friday’s upward action in SPBIO slowed with inverse LABD, posting narrow (downside) action as well.

Ready to reverse.

Summary

Trading action in the past week amounted to reducing the position size in LABD-22-05, by about 4.6% (not advice, not a recommendation).

If and when SPBIO continues is downward trajectory, that position (shorting via LABD) will again be increased as the market allows.

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

We’ve Seen This Movie, Before

1907, 1929, 1974, 1987, 2000, 2007, … and Now

As Scott Walters has said:

It’s different this time.

It’s Worse!

That ‘worse’ part includes the adverse moves in the market.

This time around, as opposed to ’07 – ’08, they really do seem to be worse.

Which, brings us to biotech SPBIO.

Biotech SPBIO, Weekly

Just to remind ourselves where biotech is at the moment, we have the un-marked weekly chart.

This sector’s the only one (miners excluded) that’s trading below the 50-Week and 200 Week Moving Averages with a 50-wk cross to the downside.

On a weekly basis, we’re in a major long-term downtrend that looks to have finished its upside correction.

Getting closer-in on the hourly chart we have the following.

SPBIO, Hourly

What do you see?

Here’s the marked-up version.

Over and again; a fractal set-up called ‘Spring-to-Up-Thrust‘.

The zoom chart below shows that price action appears to be struggling at the resistance area (black line).

Danger Point

At this juncture we’re at The Danger Point®

Enough of a push higher and SPBIO, could continue on upward, overcoming significant technical and fundamental barriers.

However, since we’re trending lower in the longer timeframes, probabilities suggest that downtrend may be ready (or near ready) to re-assert itself.

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

Predatory Lending = Collapse

The Top, Is In

Just like the last bubble but worse.

That’s the assessment from agents in the field on the imminent real estate implosion.

Interest rates have risen dramatically, applications have evaporated, properties not moving as before, prices are dropping, lenders deploying the last resort; Adjustable-Rate Mortgages (ARM).

When the ARMs, show up in force, it’s over.

Technical & Fundamental

Over the past several days, the real estate situation has been assessed from both a technical (chart) perspective as well as the fundamentals.

The bottom line (below), is so long, it may have to be covered in several posts.

  • On a weekly and daily close basis, IYR has contacted underside resistance.
  • On a weekly and daily close basis, IYR has contacted the right side of a downward trading channel.
  • Multiple gap-fills at IYR, 91 and 94. Volume declines over – 22.5%, on the second gap-fill.
  • Multiple rising wedge breaks on multiple time-frames signal a potential drop of – 41.5%, from current levels.
  • Trading volume contracting (as price is rising) on multiple time frames, indicates potential lack of trader commitment to higher prices.
  • Financial press gets in the game (with several reports), saying ‘now is the time to buy’.
  • As highlighted above, once the Adjustable Rates dominate, the top is in.
  • This top may be far worse than ’07 – ’08, as debt levels are much higher, consumer is tapped-out and there is a massive ‘elephant’.
  • That elephant is now going mainstream with the resultant effect of unprecedented population decline/disablement.

So, let’s get started.

Real Estate IYR, Weekly Close

Un-marked chart.

Test of underside resistance

Zoom of underside contact.

Right side trendline.

Zoom of contact points.

Trading Channel

Wedge Break: Daily Chart

Zoom of break and test

Wedge Break: Weekly Chart

Note:

A measured move to 55-area, gets IYR, back to 2020 lows. That’s a reasonable expectation for an initial leg down.

If we use Prechter’s assessment concerning bubbles (manias), price action eventually retraces every bit (sometimes more) of the entire bubble move.

That puts the ultimate destination of IYR, somewhere in the vicinity of 14.0, or lower, representing a decline of – 88%.

Closing Argument

Remember this gold breakout?

It was going to be $3,000/oz., in months, not years.

Gold-O-Mania was coming. You could even sign up and pay money to read the group-think of the imminent launch.

Well, obviously at this point, $3,000/oz., is nowhere in sight.

Gold (GLD) is even lower now than it was then. On top of that, the ‘changing of hands’ assessment has not been negated; prices continue to grind lower.

Having the financial press cheerlead at the exact wrong time, is an (almost) necessary component to identify a lasting reversal.

As we can see here and here, the financial media’s position is, we’re heading higher. There is ‘real buying’ (whatever that is) for the first time in weeks.

However, from the chart evidence presented above (and we didn’t even get to ‘gap-fills’, ‘multiple wedges’, ‘contracting volume’ … maybe later), it’s hard to present that price action will somehow move significantly higher.

Price action behavior above, appears to point to an immediate or very near-term downside reversal.

Summary

Lastly, we have this from Activist Post: Real estate housing crash in progress.

Be careful. If you read the article, can you see the ruse?

It’s been discussed before on this site. That is, the real purpose of the Fed.

All is going according to plan.

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