Category Archives: Bonds

Bond Reversal ? … Ruh, Roh

January 3, 2024 By in Bonds, Federal Reserve, TBT, TLT, Uneducated Economist, Wyckoff 3 Comments

This Time’s Not Like Last Time

The market’s down; bonds down at the same time.

Wait, what?

If the Fed does not lower rates, then bonds risk a reversal to the downside (not advice, not a recommendation).

Of course, no one expects that to happen. No one.

Well, maybe there’s at least one, link here: 

‘No pivot anywhere in sight.’

Bad News, Bonds

It gets worse when looking at TLT. As we’ll see below, the chart has a (potential) repeating set-up, link here.

Long Bond Proxy TLT, Daily

The set-up is not complete and may well diffuse into nothing.

However, if it does not and we get back below the magenta resistance line, there’s likely to be some serious confusion in the markets.

Wyckoff said a century ago, those incorrectly positioned in the market, provide the fuel (as they panic and exit) for a directional move.

Just think about who’s (potentially) on the wrong side and what side that is, i.e., the bullish side.

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 Usual Suspects

December 16, 2023 By in $SPSIBI, AMT, Biotech, BOIL, Bonds, CVNA, DRI, Federal Reserve, Food Supply, Genesis 41, GLD, Gold & Silver, Gold Miners, IYR, LABD, Natural Gas, Real Estate, Semiconductors, SLV, SOXS, SOXX, SPBIO, TBT, TLT, Uneducated Economist, UNG, Usual Suspects, WEAT, Wyckoff, XBI 1 Comment

Everything Happening At Once?

Not in any particular order; not advice and not a recommendation.

No 1. There (still) is no Fed Pivot. Seriously, have rates really, actually been lowered? Everyone has a huge case of ‘normalcy bias’. i.e., what the Fed did last time will happen this time.

The 40-year bond bull market from the 80’s, ended in 2020. We’re in a different paradigm now.

No. 2 Natual Gas UNG, is reversing. We’ll see whether or not there’s going to be a supply disruption.

No. 3 The semiconductors SOXX, now have a monthly bearish MACD divergence; daily and the weekly indicators posting even to prior tops (as of Friday’s close). 

No. 4 Components of biotech index XBI, are being shuffled around faster than deck chairs on the Titanic … or, the Olympic 🙂

Seems like a mad dash to add/remove, increase, reduce equities to prop things up. We’ll see how that turns out. Currently, XBI is right at resistance level, 86.50 – 87.0

Here’s just one example from an index, riddled with equities that have no P/E.

No. 5 Carvana is very close to posting new highs and potentially, running the stops.

No. 6 Has Darden Restaurants, topped out? 

The consumer is certainly tapped-out and no-one ‘needs’ a restaurant.

No. 7 Wheat is reversing; It is and has always been about the food supply.

No. 8 Gold, GLD, is currently not going higher (look at the divergences); silver (SLV) is in a major non-confirmation, down nearly – 55%, from all-time highs.

During the 1980s inflation, precious metals moved (upward) together.

Silver looks like it’s responding to the destruction/collapse of (economic) demand.

No. 9 American Tower (AMT), number two in the IYR index, posts a clear false breakout and reversal. 

If rates really are going (materially) lower, interest rate sensitive real estate should continue going higher, right?

No. 10 Which brings us to the bond market, TLT. 

Price action broke above established resistance, currently hovering above that level. 

It’s at The Danger Point®

We can see the set-up, a price action pattern repeated time and again, between the lower and upper blue lines, called a ‘Spring-to-Up-Thrust.

While the media laughs at the bears, let’s just see how this all works 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

Tales of The SOXX Top

August 2, 2023 By in 1987, Bonds, GDXJ, Gold & Silver, Gold Miners, JDST, Prechter, SOXS, SOXX, TLT, Wyckoff 4 Comments

Was It August 1st?

Was yesterday, the day?

The day the SOXX, closed higher but failed to print a new high.

It’s now early in the session (9:55 a.m., EST) and we have a new daily low.

There have been sell signals before but this one has a different ‘feel’ (not advice, not a recommendation).

Yesterday, bonds (TLT) gapped open lower and broke below support; rates are rising … again.

The 1987 Set-Up

Those old enough, remember the set-up. Rates up (bonds down) and market rising to all-time highs at the same time.

A chart of the ’87 crash is here. Note, the high was in August, that year.

Now, a video from Robert Prechter, about the current historic extremes.

‘Not since the South Sea Bubble of the 1700s’

Couple all of that with bonds (TLT) breaking down and we could have that ‘inflection point’, saying we’ve reached the top (not advice, not a recommendation).

The Mania Goes ‘Manic’

Going back to this post, it said to expect the AI proaganda to increase as we reach the top and reverse down.

If yesterday was that day, then we’ve got more articles coming about the downside being a ‘buying opportunity’.

It’s been the same throughout history

From a positioning standpoint and Wyckoff analysis perspective, under such conditions, one is to pick the weakest market to short and not the strongest (not advice, not a recommendation).

Junior Gold Miners, GDXJ, Bear Market

The last update showed how positions can be de-risked.

There’s always uncertainty but working long enough in the markets and eventually an understanding is formed on how the game is played.

Fake, fabricated or ‘serendipitous’ news articles getting the public on the wrong side, are just part of the game.

In the early session, the GDXJ, is continuing its move lower.

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

Beware … The Bond (Bull) Trap

April 2, 2023 By in Bonds, Neil McCoy-Ward, TLT, Wyckoff, ZeroHedge

… Almost There

The 40-year bull market in bonds, is over.

Until price action proves otherwise, each increase in bond price (decrease in rates) is going to be viewed on this site, from a bearish perspective.

That’s not to say bond prices won’t go higher. Counter-trend moves can be trading opportunities.

However, with market blow-ups, internet and broker outages the norm (think, SVB), taking a position against the overall main trend, is not something you’ll typically find presented on this site (not advice, not a recommendation).

With that said, let’s look at where the long-bond proxy TLT, is at this juncture.

Long Bond TLT, Daily

The chart may be hard to read but it shows the entire move lower from the all-time high posted on March 9th, of 2020.

The magenta arrow and bar is the Fibonacci 23.6%, retrace.

That’s where we’re focused on the chart below, an expanded version of the daily.

The potential set-up is obvious.

If price action breaks out of the (orange) wedge pattern into a measured move, it would retrace to the Fibonacci 23.6%, level, while at the same time, getting itself into Wyckoff Up-Thrust (reversal) position.

The up-thrust would be created if/when price action pushes above the known resistance area shown as the horizontal blue line.

The Danger Point®

If price action moves into the set-up area as shown, TLT would be at The Danger Point®

This is an area of instability.

At that point, it does not take much force to move the action in either direction, hence the name.

Strategy

As this post is being created, a quick check of ZeroHedge turns up this article, just released.

The article makes the statement as well, the bond bull market is over and uses the 10-yr Treasury to show the upside (yield) breakout.

The bottom line:

We’re in a highly dynamic environment where the typical money manager, financial advisor (as reported by Neil McCoy-Ward) finds themselves “clueless”.

If ever there was a point in time to focus exclusively on what price action is telling us using Wyckoff analysis, this is the time (not advice, not a recommendation).

The Sunday futures open in about six hours.

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 Breakdown … Rates Higher

February 16, 2023 By in Bonds, TBT, TLT

Nail, In The Coffin

If there was any remaining hope for the economy, the next leg lower in bonds (with rates higher) should just about take care of it.

Of course, if one knows what’s likely to happen, then preparations can be made.

The breakdown in bonds is already underway and this morning’s pre-market action (as of 9:08 a.m., EST) is more of the same … down.

The daily chart of bond proxy TLT, shows the wedge and measured move. With that said, there’s no guarantee of bonds heading lower, just probabilities.

Also, if bonds go lower there’s nothing that says they can’t just keep going … with rates ever higher.

Bonds TLT, Daily

Of course, one does not have to sit idly by and watch their account(s) be decimated with persistent down moves.

Leveraged inverse bond fund TBT, has been around a long time; it’s a viable tool to either hedge positions or trade outright (not advice, not a recommendation).

Leveraged TLT, Inverse: TBT, Daily

Within the past two weeks, TBT, is up over +11%, which is quite respectable for a bond fund.

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 Set-Up … SOXX & QQQ

November 27, 2022 By in Biotech, Bonds, IBB, Nasdaq, QQQ, Semiconductors, SOXX, SPBIO, TLT 1 Comment

Hitting The Channel

The majority of the indices are at their right-side channel lines.

We’ll cover semiconductor SOXX, and QQQs, below. However, biotech IBB, and SPBIO, are in similar positions.

From a calendar and data standpoint, there’ll be plenty that could be used as an ‘excuse’ for market moves but let’s ignore the (intended) distractions and take a look at what the market is saying about itself.

First up, is the semiconductor index, the SOXX.

Semiconductor’s, SOXX, Daily

The chart has Fibonacci retrace levels shown. Price action has retraced to 38.2% and stalled.

But wait, there’s more.

Putting in a trading channel, we could be at a reversal point.

Note the upward thrust energy (‘Force’) has dissipated.

the NASDAQ is in a similar situation but weaker from a retrace standpoint.

NASDAQ, QQQ, Daily

Looking at the monthly chart for the Q’s (not shown), it’s been a Fibonacci 13-months since all-time highs.

Force dissipation and ‘Contact Points’ are near identical to the SOXX.

Summary

Biotech IBB and SPBIO, are in similar positions. In fact, the overall markets appear poised for downside reversal.

As discussed in the last update, the bond market could be signaling danger ahead with its sharp upward reversal; now (potentially) entering its sixth week.

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 Market, Signals Trouble

November 25, 2022 By in $SPSIBI, Biotech, Bonds, Jerimiah Babe, LABD, LABD-22-11, LABD-22-12, Michael Cowan, Positions, SPBIO, TLT, Wyckoff, ZeroHedge 1 Comment

It’s Not About The Fed

The potential for a sustainable bond reversal was identified way back in mid-October.

Now, over a month later with bonds moving decisively higher, the ‘narratives‘ are out in force.

Those narratives revolve around ‘pivot me this, or ‘pivot me that‘, or an infinite number of the same variations.

The reality is, there’s not going to be any ‘pivot’.

Even if there was, as Michael Cowan reported weeks ago, the market keeps crashing anyway (not advice, not a recommendation).

With that in mind, a popular narrative is that bonds are higher because the Fed will lower rates when they see we’re in a ‘recession’.

Well, they won’t ever see a recession because we’ve skipped that part; going straight to collapse and economic depression. 🙂

Of course, as Jerimiah Babe puts it, Americans won’t do a thing to get ready until the last minute … most likely after the market is down 50%, or more.

Instead of the placating, proletariat calming narrative, it’s a recession; maybe bonds are moving in response to those in the know … something much worse may be ahead.

Could bonds be signaling, we’re close to a market rout?

Bonds, TLT, Weekly

We’re going to start with the original analysis, showing the potential for a sustained reversal.

From the October 16th, post.

A month or so, later.

As with the dollar analysis from years ago, a weekly bullish divergence as we see here, may result in a rally that lasts longer and goes farther than anyone expects.

Of course, the real question is ‘what does it mean?’

As Wyckoff said over a century ago, we won’t know the full reason for a move until it’s over.

One view of it however, different from the accepted narrative, we could be headed for some kind of disconnect; those in the know are shifting to ‘relative’ stability.

Moving on to other markets, we have the following:

Positioning

Not advice, not a recommendation.

The push higher in biotech SPBIO, discussed in the prior update did not materialize.

Instead, we got a new daily low, followed by some upward testing action.

A day-trade in LABD was opened and closed; then near the market close, opened again.

Details are as follows

LABD-22-12:

Entry @ 19.9134***: Stop @ 19.10***

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

Tesla’s Rally … In Trouble

November 5, 2022 By in Bonds, TLT, TSLA 1 Comment

‘Bag Holders’

Remember, Musk, cashed-out, long ago.

What’s left are bag holders; that ‘bag’ may be about to head south, in a hurry.

The last update on Tesla, link here, had this to say about a potential rally:

“If bonds rally, the rest of the market may also rally; that could include our chief cook and bottle washer, Tesla.”

So far, the bond rally has not materialized; TSLA’s spring set-up (i.e., rally), looks like it’s failing.

We’ve already presented that TLSA’s in a distribution phase and has been for nearly a year, link here.

Tesla (TSLA), Daily

Price action’s in a trading channel Fibonacci 13-Days wide; from lowest (channel contact) print to highest print.

Note that Friday’s bar was wide, with increasing volume; 74.6%, higher, than the previous session.

Summary

As noted in the prior update, TSLA printed an outside-up, on the weekly two successive weeks.

“Price action bounced at support and penetrated it several times before printing outside-up on the weekly (twice).”

Such prints are also called ‘key reversals’. Each time, that reversal has been negated.

Price action itself, tells us the TLSA rally, is failing.

The ‘distribution’ may be complete, with a ‘mark-down’ phase about to start.

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 Bellwether

November 1, 2022 By in $SPSIBI, Biotech, Bonds, LABD, LABD-22-09, Positions, S&P, S&P 500, SPBIO, SPY, TLT, TMF, TMF-22-01, ZeroHedge

Is The ‘Collapse’ Back In Play?

When the market does not respond as expected, that means something else is happening.

Such may be the case for bonds.

Yesterday, we got this announcement during market hours.

Of course, the already hammered bond market (TLT), got hammed some more.

It’s what happened next, and what’s happening today, that’s important.

That is, the sell-off was quickly reversed (to the upside) with that upside continuing this session.

The bond supply is being absorbed.

So, what does that mean?

It’s possible, the bounce, melt-up, squeeze or whatever one wants to call it could be over. There may already be a ‘flight to safety’ if there’s such a thing these days.

But let’s not hypothesize on what could be happening. The market itself (price action), tells us.

Bonds TLT, Daily

At about mid-session, this is where we are.

We’re right at the downtrend line.

The attempt to mover lower (yesterday), has been rejected.

As a result of today’s new daily high, the stop on position TMF-22-01, has been moved up (not advice, not a recommendation).

So, we’re now between the downtrend and the ‘rejection’; something’s likely to break.

Summary

The S&P (SPY) just posted an up-thrust reversal early this session and is still moving lower as of this post.

Keep in mind, all of this is happening before any Fed announcement … as if the market has already decided.

A quick note on biotech, SPBIO.

Position size has been increased in SPBIO, leveraged inverse LABD, as shown below (not advice, not a recommendation).

This sector remains at The Danger Point®

If the bounce really is over, biotech is likely to get hit the hardest.

Positions, Market Stance (courtesy only, not advice).

TMF-22-01:

Entry @ 7.166, Stop @ 6.77***

***, Indicates change

LABD-22-09***

Entry @ 19.88, 19.71***, Stop @ 18.69***

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

After The Close …

October 31, 2022 By in $SPSIBI, Biotech, Bonds, GLD, LABD, LABD-22-09, Positions, TLT, TMF, TMF-22-01

Bonds, Gold, Biotech

Bonds:

Instead of upside follow-through, we had downside test and reversal.

Gold:

GLD, closes lower and is now down seven consecutive months … a record for the tracking ETF.

Biotech

Index SPBIO, has been attempting to move higher, with it posting into an up-thrust last week.

Today it couldn’t hold the upside; now looking like a nascent reversal.

Note: Position changes at the bottom of this update.

The test and reversal in bonds (TLT) is obvious and there’s no open position in GLD.

So, we’ll focus on biotech.

Biotech ($SPSIBI, SPBIO) Daily

The zoom area of the chart shows price action just can’t seem to get above resistance (blue line).

Successive attempts were made throughout today’s session to go higher, but it didn’t happen.

Getting in closer on the hourly chart, we see the apparent upside failure during the last hour of trading.

Biotech SPBIO, Hourly

There is no doubt where at The Danger Point®

Right about mid-session, a short position was opened via LABD (not advice, not a recommendation) as LABD-22-09.

Summary

Today’s expectation for bonds was a follow-through to the upside … it didn’t happen.

In response, the initial TMF-22-01, position was closed with the secondary remaining open (not advice, not a recommendation).

Meanwhile, biotech SPBIO, was having its own problems; that is, being in up-thrust condition and not being able to make a new daily high. i.e., The Danger Point®

Positions, Market Stance (courtesy only, not advice).

TMF-22-01:

Entry @ 6.705, 7.166, Stop @ 6.68

Partial Exit @ 7.053***

***, Indicates change

LABD-22-09***

Entry @ 19.88***, Stop @ 18.94***

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