Gold & Silver, Timeline’s End ?

Government, Is Always Last

The laws enacted by the Government to prevent the crash of 1929, were passed in 1934.

So, now we have at least two states (here and here) eliminating sales tax on the purchase of gold and silver.

Where were they way back in 2001, as the metals were bottoming?

Interestingly (then again, not) it’s a Fibonacci 21-years, nearly to the day, from that 2001 bottom.

That’s not the only Fibonacci correlation being observed.

Let’s take a look at Junior Miners GDXJ, and see if it too, has a Fibonacci event.

Junior Miners GDXJ, Weekly

We’re just one week short of Fibonacci 13-Weeks, from the late January 2022, bottom.

One extra week is well within margin of error when considering the 89-Week timeframe as shown.

But wait, there’s more.

Looking at the daily chart, not only is there a bearish MACD divergence, we’re also just one day shy before it’s a Fibonacci 55-Days, from the 1/28/22, bottom.

Junior Miners, GDXJ, Daily

Can it all line up this perfectly?

Well, it can if no one is watching; that’s where the crowd and the government come in.

Summary

It’s a fairly safe assessment, nobody expects a downside reversal … nobody.

Even though time and again, we have clues that opportunity for precious metals may come later not sooner (not advice, not a recommendation).

The lockdowns in Shanghai with subsequent starvation and bartering (here and here), show under such conditions, precious metals are nowhere on the list.

Closer to home, the Texas Freeze of 2021, exposed that (lack of metals demand) as well.

Housing prices are starting to ease-off as well as prices for used cars.

Gold (GLD) may have reached its peak, March 8th, this year. Let’s see what happens next.

Stay Tuned

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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

Bulls in Danger … FXI

Deep Kimchi Ahead ?

Even before the exit could be made in YANG, the FXI reverses this morning’s marginal highs and heads lower.

The chart below is an update of prior analysis (at this link) showing upward progress, in percent.

Less net travel with each thrust.

FXI, Daily Chart

As this post is being created, FXI price action continues to erode … signs of exhausted bulls.

FXI can’t seem to get out of its current trading range.

Each attempt fails (with less energy than before) and price action falls back into the range.

Maintaining short via YANG, YANG-22-01 (not advice, not a recommendation).

Summary

At this juncture, it’s still early in the session and price action could reverse higher.

However, it’s obvious now, barring some kind of catalyst, the area above FXI, 33.70 – 33.80, presents significant resistance.

Stay Tuned

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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

How to Handle a ‘Gut Check’

Pre-Market FXI, Shows Sharply Higher Open

The daily chart of FXI below has pre-market action as the blue line.

Currently, we’re sharply higher but still below the March 30th, high.

FXI, Daily Chart

The next chart shows the March 29th, recovery high.

For the market to continue a next leg higher, obviously, it needs to penetrate that high.

Inverse (YANG) Fund Tracking Errors

At this juncture, about 30-minutes before the open, YANG is trading at 14.01 – 14.09, slightly below the 14.16, stop.

Even though FXI is not above the March 30th high (used to locate the YANG stop), the inverse fund is trading slightly below that stop level.

This is the tracking error that’s common with every leveraged inverse fund.

Trading Action

We’re either in a ‘gut check’ upward move in FXI, before reversing to lower lows, or it’s the start of a next leg up.

Words of wisdom from the late David Weis … ‘Prove it’.

If this is the next leg higher, FXI must first penetrate the March 30th, high of 33.62, then penetrate the March 29th high of 33.73.

Using that requirement (of higher highs), the plan is to partial exit YANG if/when FXI penetrates the 33.62 high and full exit at penetration of FXI: 33.73 (not advice not a recommendation).

Summary

With each price action move, FXI is successively removing the probability of repeating the same action(s).

We had a short-covering gap higher during the week of March 18th. That massive volume move is not likely to be repeated.

We now have what may be a ‘gut-check’ move testing current highs. This move would also join the ranks of price action that’s not likely to be repeated.

If FXI, is unable to move higher from this juncture, it weights the probability even more to the downside.

Stay Tuned

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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

BABA … Bull or Bear ?

The Level(s) To Watch

On one hand, BABA, has launched more than 60%, off its most recent lows.

On the other hand, that launch posted the highest daily, weekly monthly, and (about to be) quarterly volume, ever.

Markets tend to come back and test wide bar, high volume areas. Just that probability alone, coupled with the unprecedented volume behavior on four timeframes, points it to the bear side.

Shorting China FXI, via YANG, discussed yesterday (not advice, not a recommendation), is essentially a BABA short as that equity is weighted more than 10%, in the FXI.

So, let’s take a look at what BABA, is saying about itself.

BABA, Weekly Chart

The massive weekly volume highlighted below.

Next, we have a not-so good-looking picture (for the bulls).

BABA may be posting a long-term Head & Shoulders top.

Next, is the daily with its largest volume ever as well.

Getting closer-in on the daily, there are support levels to watch.

At this juncture, early in this session, we’re at support now. Breaking down puts the next, less defined support into play.

Positioning

The last post, showed what was then current positioning in FXI leveraged short vehicle, YANG (not advice, not a recommendation).

During the session yesterday, the YANG position was increased substantially. Essentially, the low-risk opportunity was used to its fullest advantage.

This method of trading goes way back to Livermore, Wyckoff and Loeb

Livermore:

Focus on the big picture and strategy. Look for the (potential) big move.

Wyckoff:

Use what the market is saying about itself to find the danger point. The point of least risk.

Loeb:

Real market opportunities are rare. When one is found, it must be used to its fullest extent.

Do NOT diversify. Focus positions and time the market.

Summary

As always, anything can happen.

BABA is currently at one of its support levels and holding for now … bulls still have a chance.

Obviously, the active trade, YANG-22-01, is taking the bearish stance. The plan is to have a tight, in-the-green stop, soon (possibly today’s low).

As this post stated at the outset, we’ve got all time high volume on four timeframes: Nearly a bearish case in itself.

The high-volume area may be tested.

That means BABA (and FXI) price action would need to move lower to perform that test.

Stay Tuned

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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

China, FXI, YINN & YANG

Reposition The Short

‘Once stopped out, the amateur never comes back.’

That’s the assessment from Dr. Alexander Elder, years ago.

The amateur thinks he has special analysis powers and has to be correct on the trade immediately.

On the other, hand, the professional may attempt up to three entries (or more) to get the position they want.

So, it is with Emerging Markets (EEM) and the correlated trade, China (FXI).

Yesterday’s jump higher in both the EEM, and FXI, did not invalidate the work already done, linked here.

Instead, that move told us where to look.

As shown below, the FXI had the least net upward movement. The percentage gains have reduced substantially

FXI, Daily Chart

Using that information, FXI appears at, or near the end of its short squeeze move.

The Emerging Markets trade (once stopped out) was re-positioned to be short the FIX via YANG (not advice, not a recommendation).

YANG, Daily Chart

Upon initial glance, it appears to be a lot of (short) positioning activity. That may be true for now.

However, the objective is to identify a sustainable move (before it’s obvious) and then continue to build on the trade.

Summary

Note how there’s a huge downward slash in YANG, that corresponds to the sharp short squeeze move in FXI.

From a risk standpoint, one way to look at this event, it’s not likely to happen exactly this way again (rule of alternation).

We’re about 20-minutes before the open.

YANG, is trading higher in the pre-market by + 0.25-pts, or about + 1.61%.

Stay Tuned

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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 Taiwan Connection

Eyes On The Prize

Huge truth bombs from a just released Stew Peters broadcast, linked here.

At time stamp 15:25, one of the major truths is Taiwan; specifically, Taiwan Semiconductor, TSM.

Why Taiwan?

Why focus on Taiwan Semi and its connection to the Emerging Markets, EEM, ETF?

We’re focused on it because that’s what the tape itself is telling us to do. The EEM, has already been in a sustained downtrend since mid-February, last year.

It’s been three successive (chart) quarters of lower lows and lower highs.

Looking at semiconductors in general, out of the top ten market cap equities in the SOXX, only TSM, is at or below its 23.6% retrace level. All others have rebounded much higher.

As Wyckoff said a hundred years ago … ‘somebody always knows something.’

Meaning, those really in charge (time stamp 2:53, above) already know the plan; their actions show up on the tape.

We’ll look at those tape actions with TSM below

Taiwan Semi TSM, Daily Bar

Moving closer in on the daily, we have the following.

It’s clear, at this juncture, price action has stalled.

Two sessions ago (Wednesday, 23rd) there was an outside down (reversal) bar.

This session and yesterday’s, have been inside action so far.

There has been no new high or low, posted.

Although today’s action posted below yesterday’s low, it has not posted (currently, at mid-session) below the reversal low.

Summary

Anything can happen.

Price action, TSM could launch upward past the resistance and continue to a 38.2%, retrace.

At this point, it seems to be low probability; all the good news (i.e., the short squeeze), may be out.

We’re heading into the weekend and we’ve seen over and again, that’s when things go sideways.

As Livermore said, ‘surprises tend to happen in the direction of trend’.

TSM, is and has been, testing the underside of its breakdown; it now appears poised to continue lower.

Stay Tuned

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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

Taiwan Semi … Reverses

The Market Leads The News

Price action leads the news, not the other way around.

The last update on TSM had this:

“A reversal away from this area confirms the channel and weights probability to more downside …”

As seen in the chart of TSM, a reversal is what we’ve got.

TSM, Daily Close

Note that volume increased on the reversal; helping to confirm the channel.

If this reversal ‘sticks’ and TSM continues lower, the downside potential is significant.

Summary

It’s a no-brainer to assess the world situation as unstable.

It’s exactly during these (once in several generation) events where international borders (for example) like Taiwan and China could potentially change.

Several links of interest on China/Taiwan are below.

China ‘There by tomorrow

Tencent shares plunge

Hong Kong … mandatory tests

China mandates ‘zero policy

China lockdowns to disrupt supply chains

What could go wrong ?

As Livermore said nearly a century ago … ‘surprises tend to happen in the direction of trend’.

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