Peabody in the NEWS

Back in late August, the nascent BTU reversal was identified when an entry would have been low risk.

The chart speaks for itself.

If there’s only one chart that shows the benefit of reading the tape (not advice, not a recommendation) as presented on this site, The Danger Point, BTU is the case in point.

Effective tape reading requires at least 10,000 hours of training and/or experience.

The author presenting on this site, has over 23,000 hours at the tape. However, that experience does not equal perfection.

Experience equates to probability.

The longer one is in the markets, through booms, busts, flash crashes, manic and panic, the more one is able to operate as the masters of old and be separate from the crowd.

Now after BTU has decisively launched higher, everybody’s an expert. Two examples below:

No. 1

No. 2

We indeed, have a position in BTU.

However, instead of looking to buy with the rest of the herd, we’re looking for the exit.

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.

Prepping For The Downside

The more sophisticated market participants work the downside.  That’s where the biggest (and fastest) money is made.

shutterstock_242289160Trading books and specifically Reminisces of a Stock Operator, (first published in 1923) detail how the wealthiest traders in the world prefer downside action.

The markets are now stretched to obscene levels and could go higher, still.

Just this past week, we have interest rates breaking out to the up-side, a-la August, 1987.

Being long anything other than corn or wheat and the occasional down-trodden coal miner,  seems to be a high risk plan (not a recommendation).

Positioning for the downside in the appropriate market, might be a lower risk option than riding the insanity to the top … wherever that is.

Which brings us to inverse biotech fund, BIS.  The daily chart shows the well-heeled know something’s up.

2020-08-30_9-32-52-IBB-Daily-5-bar-lanscape-notesSpeculative volume for potential downside in biotech is increasing.  Last Friday’s volume in BIS was the highest in nearly four years.

BIS was trading higher throughout the entire session until the last few minutes.  It closed slightly lower for the day and thus colored the volume bar red.

That minor BIS downturn (up turn in IBB) can be traced directly to Amgen (AMGN) which is now part of the Dow 30, effective Monday the 31st.

It’s important to note that for the past four months, volume activity in IBB has remained relatively unchanged.  Not so with BIS.

We’re nearing the Labor Day Weekend during the next sessions.  The market will be closed on Monday, September 7th.

Back in the day of 1929, the market made its all time high on September 3rd, the Tuesday after the Labor Day Weekend.

 

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.

Peabody Energy (BTU) Reversal

Way below the media radar, coal prices are reversing off a four-year low.  Peabody Energy (BTU) is reversing as well.

iStock-166215263-CoalWhy would coal, a supposed dead product be reversing now?

The list could be endless depending on one’s level of awareness.

Here are a couple of potential reasons.

No. 1

Were entering a 400-year solar minimum with decreased sun-spot activity and colder (much colder) earth temperatures.

The natural result of such activity is a decreased earth magnetosphere and increased cosmic ray activity.

Go outside during a sunny day … the sun’s rays are not warm anymore, there hot!  They feel like burning, searing energy on the skin.  The magnetosphere is weak, letting more radiation come in.

Under such conditions (more cosmic rays) volcanic activity picks up big time.  Scientists (those still honest) have not been able to figure this one out.  It just is.

So, we’re one major eruption away from the entire earth being covered with an ash cloud.  Bye, bye solar … instantly.

No. 2

Natural gas prices are rising dramatically.  Remember the Winter of Discontent update?  That update was spot-on.  It also included the level UNG could retrace (which it did) as a test, before moving higher.

UNG is up over 44%, from those levels.  One of many (now false) ideas for natural gas, was that it’s cheap.  Not any more.

Just two potential reasons for a coal reversal at this point.  Those with advance knowledge may be taking positions.  We see it in the price action.

As always, anything can happen and coal could resume a downward trajectory.  However, if BTU is able to hold above the 2.50-level, it may have already seen its all-time lows.

Keep in mind with BTU, we’re dealing with an equity in serious trouble.  It’s not hyperbole to say, the only thing that could save this company is a major reversal in coal prices.

2020-08-28_12-05-35-BTU-Daily-4-bar-landscape-notes

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.