‘Pivot’, or ‘The Channel’

Who’s On First?

Evidently, according to this out on ZeroHedge, stocks will be a good buy when the Fed pivots; apparently getting back to 2%, inflation.

So many lies, half-truths and pre-suppositions, all in one sentence. Let us count the ways.

Actually, let’s not.

At this point in time, one does not want to draw any undue attention.

A better idea is to see what the market’s saying about itself. This is the crux of Wycoff analysis.

Wyckoff stated a century ago (1902, to be exact), stock prices moved based on an energy of their own; at times, completely disconnected from fundamentals.

Looking at those markets and from my own tracking spreadsheet, 106, indices or equities are currently monitored.

That list will change over time but it’s typically around 100 or more ticker-symbols.

Of that number, the following are those currently in a downward sloping trading channel.

The List

Looking at the charts on a weekly basis:

AEM, BBY, C, CAT, COF, CORN, CPER, CVX, DIA, DJ-20, DJUSBM, FCX, FMC, GDXJ, GLD, GM, HYG, IYR, PLD, SLV, TSM, USB, USO, WY, XLF, XOM, XOP

Others that may be about to confirm their channel:

IBB, MRNA, SPBIO, SPY

The Charts

Two examples are from the above list; the important part is we’re going to choose ‘heavy industry’.

Since nobody can seem to figure out the definition of ‘recession’, we’ll help them out a bit.

Caterpillar CAT, Weekly Chart:

The right trendline’s declining at approximately -67%, on an annualized basis.

Next up, FMC Corp.

FMC Corp., Weekly Chart:

FMC’s in a little better position with its right side declining at ‘only’ – 55%, annualized.

But wait, there’s more.

Since we’re on a roll; let’s throw in a bonus and include a market directly connected to the economy; Copper.

Bonus Chart:

United States Copper Fund, CPER, Weekly

Even with last week’s continued but fading S&P, short covering, CPER could not close higher.

Ruh-Roh.

CPER is heading south at a whopping -79%, annualized.

Ok, one more.

This one’s not quite yet confirmed but we’ll probably get a decision this coming week.

We saved the best (worst) for last

Moderna MRNA, Weekly

From the lows during the week ended June 17th, to last Friday’s high, was a Fibonacci 8-Weeks.

It’s also a near exact Fibonacci 23.6%, retrace.

On top of that, price action is testing the underside of resistance formed during the break below the 200-level at the beginning of the year.

If next week we see a pivot lower, MRNA’s potentially declining at a well-deserved, -84%, annualized.

Summary

We don’t have to listen to supposed experts and analysis ‘banter’. The charts themselves tell us the next probable direction, i.e., down

Who’s on First and What’s on Second.

The media?

Well, let’s just say they might find this link useful.

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

Gold Price Action, Blows-Up

Trading The Price … Not The Narrative

The narrative and the price don’t agree; at least at this point.

Over and again, we hear it’s ‘dollar destruction’ and ‘hyperinflation’.

Here is a link to one of the latest pontifications on what ‘inflation’ is doing or is going to do.

After watching that, one is so much better informed. Well, at least we know what the bit-players are saying … each reading from their own (pre-approved) script.

Let’s get back to reality and the price action at hand.

We’ll start with this quote from the last update which references shorting the gold miners using JDST (not advice, not a recommendation).

“However, something that can be done is to use that upward bias to position short at the lowest risk possible.”

That’s exactly what was done during this (past) session; let’s start first with the big picture.

Junior Miners GDXJ, Weekly

As a reminder, and for those who may be new, we’re looking for a particular price pattern that has been shown to repeat over time:

Wyckoff: Spring-to-Up-Thrust

Note in the CAT, example in the link above, price-action up-thrusted and then came right back down to support without any kind of an upward test.

Sometimes, it happens that way.

What’s not known of course, is if GDXJ will respond the same way.

Junior Miners GDXJ, Daily

The chart above is a close-up of the action.

The next chart is leveraged inverse fund JDST. It shows the initial entry of what is labeled trade, JDST-22-02 (not advice, not a recommendation).

Trade entry was just as JDST, price had reached its daily low extreme and was backing off higher (GDXJ, lower); right around 1:14 p.m., EST.

Note the tightness of the stop; just 0.24-points.

Summary

Tomorrow’s action could hit the stop, blow (gap) through the stop or continue upward.

It’s unknown.

What we’ll get for sure, is another data point on what’s really going on with the miners.

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

Set-Ups, that Repeat

Late Session

Wyckoff: ‘Spring to Up-Thrust’

Years ago, while reading one of David Weis’ daily updates, he made a comment to the effect:

‘I can’t count how many times I’ve seen a spring, go straight into an up-thrust’.

His observation stuck with me through the years. Being the engineering type, I naturally wanted to know why.

Why does that market observed phenomenon occur?

Pursuing the question from a data perspective, it became clear that finding an answer, would be a never-ending quest.

I abandoned the ‘data’ idea; but the question lingered.

During that time, observation of the markets proved Weis’ point. Some markets tend to go straight from ‘spring to up-thrust.’

One example that’s taking place now, is CAT:

Another example in the potential set-up phase is LOW:

The reason for the phenomenon remains open. Obviously, the market’s going to go where there are orders.

It’s likely, under the right price action and psychological conditions, when support is penetrated enough (amateur) participants sell and then sell short.

Those undisciplined traders continue to move their stops higher (against their trade) as the the market moves higher; ultimately taking them out at the up-thrust top.

How do I know this? Because that’s exactly what I used to do.

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.