Test, Complete?
The last update on Delta, link here, said there’s a possibility for an upside test.
Looks like it’s here.
Today, price action net upward progress, appears to have slowed (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
‘Test’, Next Week?
At this point, the Delta Airlines breakout has failed.
Friday, the current decline slowed, which implies that next week, may be an upward ‘test’ of resistance (not advice, not a recommendation).
The failed breakout was observed in real time and traded to the short side as DAL-26-01.
Covering of the short was on Friday, with a 6.29%, profit.
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The Danger Point®, trade mark: No. 6,505,279
Bearish Divergence
Delta’s (DAL) the largest cap in the airline sector.
For the past three weeks, it’s attempted to break out above prior long-term highs.
That breakout so far, appears to be failing (not advice, not a recommendation).
Delta Airlines DAL, Weekly
Yesterday, DAL posted a new weekly low. Today, has been a test of that break (so far).
On the chart, we have an MACD bearish divergence.
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The Danger Point®, trade mark: No. 6,505,279
Along With, ‘Throw-Over’
Once again, we’re at the edge of the (price action) lake where the risk of being wrong, is least.
Delta’s at the extreme, contacting the terminating wedge, then backing off, returning into the pattern.
As action progressed higher from April lows, the amount of thrust (Force-Index) continues to erode.
Delta DAL, Weekly
Now that (nearly) everyone’s got what they wanted, higher unemployment, so rates can be lowered, the show’s about to start.
The ‘hand-wringing’ has already begun, link here and here.
Two sectors typically hit hard during an economic downturn, are semiconductors and aviation (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
SOXX Closed, DAL Closed XBI, Open
What we’re looking for from a short-side perspective, is ‘ease-of-movement’, downward.
Today, only one sector that’s currently being followed exhibited downside ease: Biotech, XBI.
To recap the situation with XBI, were in Wyckoff up-thrust position, first discussed here, then here and here.
Positioning
As stated in the header, SOXX-25-12, DAL-25-03, have been closed.
Biotech (short) XBI-25-03, opened with a stop at the session high (not advice, not a recommendation).
Charts to follow.
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The Danger Point®, trade mark: No. 6,505,279
Apex, Terminating Wedge
Was the Fed speech a turning point?
Remember, markets typically move in the opposite direction first after the Fed, then resume their main trend.
On Friday, markets were generally higher on interest rate hopes. It’s called ‘hope’, as the Fed’s not actually done anything.
Let’s word that more accurately. The bond market has not (yet) told the Fed to lower rates. When it does (if it does), they will follow and present their case as if they are leading the market.
Decades ago, Robert Prechter Jr., in a research paper, proved this point. More recently, Ed Dowd repeats the fact, link here (time stamp: 37:48).
Markets were higher, including the SOXX, covered here, and in this update, airline sector Delta (DAL).
Delta Airlines, DAL, Daily
If there’s any one chart showing why this site primarily works the short side, this is it.
The last major move was an impulse downward, taking less than three-months.
The corrective move against the trend, has so far been nearly five months in choppy overlapping action.
DAL, finished on Friday at the Fibonacci 78.6%, retrace level (not shown). Unless the market decides otherwise, we’re in a terminating wedge.
Currently short DAL, as DAL-25-03, with stop just above Friday’s high (not advice, not a recommendation).
Weekend Wait
Now, the worrying starts … we can almost write the mainstream media script for the next few days.
Why will the Fed need to lower rates? Is unemployment going to continue higher? What about all the mass layoffs? How will the consumer be affected … and on and on.
As a reminder, ‘alternate’ (real) unemployment numbers are here. We’re already at 25%, Depression era levels.
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The Danger Point®, trade mark: No. 6,505,279
Fibonacci Week 144, Holding … For Now
It’s early in the session; NVDA, has posted a new daily low, adding weight to potential reversal, at Week 144.
The SOXX, also printed a new daily low.
Repositioned short (again), with stop to be the session high (not advice, not a recommendation).
Charts to follow.
Other Markets
DAL-25-02, printed a new daily high (exit signal). Trade closed at break-even (not advice, not a recommendation).
WMT-25-04, stop, moved down to 95.54 (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Straight Up, to Resistance
Delta’s latest earnings release provided an excellent opportunity for a ‘changing of hands’.
We’ll have to see what happens next, to verify that premise (not advice, not a recommendation).
In a scene that could be straight out of Livermore and Wyckoff’s observations, the big players need huge volume to enter or exit positions.
For Delta, that volume event was (potentially) last Thursday.
Delta DAL, Daily
Stright up to resistance on massive volume.
Then, the next day, a lower close.
There’s a lot going on in this chart.
As noted, we’re at the 61.8%, retrace of the entire move; January 22nd, highs, to ‘tariff panic’, April 4th, lows.
The initial wave from highs-to-lows, was ‘impulsive’.
Then, and a-b-c, ‘corrective’ wave (labeling not shown), to where we are now.
All of which, brings us to ‘positioning’
Positions
As noted, short this sector as trade DAL-25-02; stop, just above Thursday’s high (not advice, not a recommendation).
Other Markets
Discretionary exit on SOXX short, SOXX-25-04, at break-even (not advice, not a recommendation).
Maintaining Wal-Mart short, WMT-25-04, with stop lowered to 96.78 (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
One of The First Sectors To Go
If we’re heading for a recession as Ed Dowd suggests, link here, airlines (and semiconductors) are typically one of the first sectors to turn lower.
Taking that interview, in full along with Greg Hunter’s next one, link here, the overall situation is sobering.
With that, let’s look at the airlines.
Airline Sector, Weekly
Terminating wedge has broken to the downside.
The prior channel in green is shown to present, channels for this sector have happened previously.
Currently short DAL and UAL (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Was It ‘Manipulation?’
Looking at United Airlines (UAL), with the precise set-up, four-year wedge, measured move, the top, timed exactly at an earnings release, you have to ask yourself …
Was it all part of a (secret) plan?
Wyckoff Writes on Manipulation
Way back in 1910, Wyckoff wrote the following concerning manipulation (emphasis added, quote used with permission).
“Manipulators are giant traders, wearing seven-leagued boots. The trained ear can detect the steady ‘clump clump’ as they progress, and the footprints are recognized in the fluctuations and quantities of stock appearing on the tape.”
United Airlines UAL, Weekly
When looking at the chart, it all makes sense … it just took over four years to play out.
As the last update said, ‘what now?’
All three major (largest cap) airlines are currently (flat to) lower; DAL, UAL, LUV (11:02 a.m., EST).
American Airlines (AAL), lower as well; it’s down a whopping -10%, just today
What does that mean?
Here’s an interview with Ed Dowd, just posted.
All of the damage inflicted over the years, is not going to be wiped-out with the stroke of a pen (to borrow a comment).
With that, one of the hardest industries to make a profit even in good times, are the airlines. (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
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