Weekly, Wrap-Up

The Usual Suspects

No. 1

Carvana Fires 2,500 Employees

We didn’t see that one coming. Or, did we?

Just a quick review of this report posted over six-months ago:

“If your biggest claim to fame is that you ‘invented’ a vending machine … you’ve got real problems.”

“As the economy (if you can call it that) falls off the cliff, one of these two (CMX, CVNA), is not likely to survive.”

Well, looks like we have the answer on that one.

From the date of the report above to last Friday’s close, CVNA, is down -87.8%.

Measured from all-time highs, CVNA, is down -91.1%.

As CVNA, swirls down the drain of ‘disruption’, looks like it was only a blip in the land of ‘status quo’.

No. 2

The ProLogis ‘Connection’

Is this a re-print of a prior report?

No, the update below, is essentially a confirmation of the analysis in that (above) report.

Turns out that Amazon (link here) is in negotiations with chief cook and warehouse bottle-washer, ProLogis (here) about terminating massive amounts of lease space.

The entire affair, is an irrefutable confirmation of the Wyckoff analysis method.

That is, ‘the market itself defines it’s next likely course’.

Those on the inside always know something; that ‘something’ (i.e., their actions) shows up on the tape.

After the initial ‘ProLogis Connection’, a follow-up was posted that identified the largest down-thrust energy in ProLogis history.

From that report was this quote:

“We’re using PLD, as the proxy for the real estate (IYR) sector as it’s the largest cap equity.”

“That’s true for now … but maybe not for long.”

How quickly things change.

ProLogis is now the number two in the IYR market cap and very close to being third.

No. 3

Wealth Confiscation Coming Soon

The first two bullets perceived events before they happened, so let’s make it three-in-a-row.

This one’s pretty much a no-brainer.

During the last meltdown in 2007 – 2009, IRA retirement accounts came within a hairs-width of being confiscated.

This time around, could be for sure.

The following’s a section of a report written years ago.

It’s even more relevant now.

Begin Report

4/7/19

Government To Confiscate IRAs?  It’s Easy

There has been enough time for the American working (and saving) public to take the lessons of the 2007- 2009 meltdown and act accordingly.

One of those lessons would have been to realize, just how close they came to having their IRAs confiscated.

Personally, I’m surprised that any of the following links below are still active.  Well, who’s looking at this stuff anyway?  Certainly, not the general public:

Dems Target

Fact Check

Congress considering

Government to Confiscate (no longer active)

Confiscation of Private Retirement

Even in the Wall St. Journal:  Targeting your 401K

After reading several of these reports in 2009 and later, it did not take long for me to set the plan in motion to cash out … completely.  I took the 10% penalty, while it’s still 10% and liquidated my accounts.

The rest of the population?  Not so much.

I think it was Prechter who laid out just how easy it is for the government to seize IRA accounts.  It’s basically a two step process.

Step 1.  The market drops 50% to 70%.  Remember, the drop from 2007 to the bottom in 2009 was 58%.

Step 2.  Declare a state of emergency (executive order) for the working population and move in to “save” the IRA accounts from more devastation.  The result would involve a stiff withdrawal penalty (say 50%) and to “protect” the accounts from further losses, IRAs can only invest in U.S. Treasuries or Bonds.

It’s that easy. 

As stated previously, wealth does not necessarily mean gold and silver.  That too can (and has been in the past) be confiscated.

In fact, I and my firm are already operating as if the next crisis is in full swing and asset confiscation is the norm.  That way, we don’t have to come up to speed quickly in what may be an extreme stress situation. 

End Report

One could propose that (IRA) legislation is already written.

Just like the CARES Act was already written and submitted to committee in January of 2019, nine months before there was any kind of outbreak.

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

Last Time … is not … This Time

The Rule of Alternation

That’s it in a nutshell. What happened last time, won’t happen this time.

The market reveals its own secrets; you just have to know where to look.

An entire industry has been (purposely) built to make sure the ‘average investor’ never finds the truth of the markets.

That industry is the financial analysis industry; the one with the P/E ratios, Debt-to-Equity, and so on.

Sure, it was a tongue-in-cheek post to use the fact that Carvana had no P/E (linked here).

I’m not certain if they ever had a P/E; probably not.

However, that financial, i.e., fundamental(s) fact, did not keep the stock from going up over 4,529%, in four years.

It should be noted, the Carvana analysis was done on a Saturday (as has this one). At the very next trading session, CVNA posted lower, started its decline in earnest and never looked back.

Not saying that exact thing (timing it to the day) will happen with our next candidate real estate; as said before, part of Wyckoff analysis (a lot of it, actually) is straight-up intuition.

The good part from a computer manipulated and controlled market perspective, intuition can’t be quantified.

So, that’s your edge.

Let’s move on to ‘last time is not this time’ and see what the real estate market IYR, is telling us.

Weekly Chart, IYR

We’ve got the weekly un-marked chart of IYR, below.

The ‘alternation’ is there.

Here it is, close-up.

The first leg lower had some initial smoothness but quickly became choppy and overlapping.

Not so, now.

We’re essentially heading straight down.

Fundamentals

From a fundamental standpoint, real estate is finished. However, it’s been finished for a long time.

The fundamentals won’t and can’t tell anyone what’s likely to happen at the next trading session … or any other session.

The market itself (shown above) is saying the probabilities are for a continued decline; posting smooth long bars until some meaningful demand is encountered.

As shown on the last post, if the trading channel is in-effect, that (chart) demand is a long way down.

Positioning

Shorting IYR via DRV, has been covered in previous posts (search for DRV-22-02).

The following weekly chart, is marked up with two arrows.

Arrow No. 1

Initial short position via DRV was opened late in the day on April 28th; the day before the market broke significantly lower (not advice, not a recommendation).

Arrow No. 2

As the market headed lower during the week just ended, the size of the DRV position was increased by 36%.

Currently, the gain on the total position is about +22%.

At this juncture, the DRV stop is located well in the green in the unlikely event we get a sharp IYR, upward move in the coming week.

Summary

Under ‘normal’ conditions one could expect some kind of upward bounce in the days ahead.

However, as shown already with big cap leader PLD, the situation’s anything but normal.

Highlighted in earlier posts, biotech is leading the way with SPBIO, currently down – 59.8%, from its highs.

Biotech IBB, with chief cook and (globalist) bottle washer Moderna (MRNA), is down – 36.2%.

As Dan from i-Allegedly has stated time and again, we’re already in a depression.

So, buckle your seatbelt Dorothy …

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

Carvana Has No P/E

No P/E

No Grade-Point

Another Animal House ?

Delta

‘All courses, … incomplete

If your biggest claim to fame is that you ‘invented’ a vending machine … you’ve got real problems.

No haggle pricing, thin margins and high volume, have already been pioneered by CarMax.

So, what’s left … you get to select your car with a token and vending machine?

Based on available data, in the past three years, CVNA had one profitable quarter. Those results were released in August, this year.

About a week after that, CVNA breaks its uptrend, goes sideways and now, is heading lower.

CVNA Trend Break

The daily chart has the arrow showing the only profitable quarter in three years.

On the other side of business, we have CarMax … where every quarter for the past ten-years has been profitable.

Double The Bubble

During the melt-down in 2007 – 2008, new cars on retail lots had window stickers that said ‘$10,000 Off List Price’.

We’re probably double the bubble of then. With that in mind, even CarMax looks poised to have a hard time.

As the economy (if you can call it that) falls off the cliff, one of these two (CMX, CVNA), is not likely to survive.

So, we can expect even deeper discounts.

However, this time, it’s likely to be a choice between buying food or buying the SUV at 70% – 80%, off retail.

On the positive side, that SUV can be put to work hauling fertilizer (if it can be found) for raised bed gardens. 🙂

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

Carvana: Ready To Crash

Carvana (CVNA) has no P/E ratio. 

It’s almost like Dean Wormer, discussing the Delta House’s grade-point average;  “Mr. Blutarsky, Zero-point-zero.”

From a chart perspective, CVNA has spent the past nine months forming a terminating wedge.

That wedge had a breakout to the downside during the last trading week of 2020.

No amount of positive bias last Thursday, (markets making new highs) was able to lift CVNA.

The stage is set.

Measured move from the nine-month wedge projects CVNA to the 87, area; a -63.7%, decline from current levels.

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.