Category Archives: David Weis

Massive Top (Reversal) … Merck

September 4, 2024 By in Biotech, David Weis, Dr. Elder, Drug Manufacturers, MRK, Semiconductors, Wyckoff

Right Along, With Semis’

Those ready (positioning) for this potential historic reversal in the major indices, are at long last getting the sense, ‘The jig is up’.

As Dr. Elder has said, ‘the markets will hypnotize you’. They will lull you to sleep and then reverse with a vengeance.

So, it may be with our example of the day, Merck (MRK).

No-Brainer … To Brain-Dead

Back in the day when posting on SeekingAlpha, Merck was a no-brainer amongst the grifter crowd.

Since fundamentals don’t move markets, and Merck continued to grind higher week after week, month after month, one could publish any amount of ‘research’ and look like a genius.

Oh, how times have changed.

As we’ll see below, Merck has been in a massive topping pattern, or Wyckoff Up-Thrust.

Merck, MRK, Weekly

There’s a lot going on with this chart.

It’s been about seven-months of grinding at the highs, only to break down on heavy volume the week of August 6th.

Then, it was five weeks of ratcheting higher in a test, reversing this week.

Note the testing action was in response to the wide high-volume bar.

As David Weis said in his video, wide high-volume bars tend to be tested; here we see evidence of that action.

As always, anything can happen and Merck could levitate higher. However, we can see just from the chart alone, that prospect looks like a low probability (not advice, not a recommendation)

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

Oil Bounce … Part II

August 23, 2024 By in Artificial Intelligence, David Weis, DRIP, DRIP-24-02, Federal Reserve, Great Depression 2.0, Interest Rates, IWM, Oil, Oil & Gas, Russell 2000, Semiconductors, SOXS, SOXS-24-13, SOXX, TZA, TZA-24-01, USO, XOP

Is This It?

We’ve gone form “Not Happening” to this morning’s action; ‘maybe it’s happening?’

As was done with Oil & Gas exploration XOP, we’ll now take a look at the oil patch itself and proxy, USO.

Oil tracking Fund, USO, Close

“What do you see?”

Marking up the chart.

We either have the ‘tradable bounce‘, or a potential contact point for the right-side channel line (not advice, not a recommendation).

The Fed announcement is just out, essentially accommodating a rate cut in September.

There was talk of some ‘cooling’ in the market (Ya think?).

With that, demand for oil seems like it would take a hit putting it lightly (not advice, not a recommendation).

Positioning.

The market itself is telling us where to go and what to do.

The important item for the day; what is the market not doing? Specifically, the Semiconductors, SOXX.

The SOXX, has not made a new (daily) high (at least, not yet) after the Fed’s announcement; it can even be seen as the ‘proverbial gut-check’, a la David Weis.

With that, all other positions have been closed save the short in the semiconductors via inverse fund SOXS (not advice, not a recommendation).

Danger Ahead

The ‘rate cut’ has yet to happen and September is a long way away.

It can’t be re-iterated enough how dangerous is this environment; prices stretched via a narrative that’s false (not advice, not a recommendation).

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

Russell 2000, Search for ‘Danger’

August 19, 2024 By in David Weis, DRV, DRV-24-03, IWM, IYR, Real Estate, Russell 2000, TZA, TZA-24-01, Wyckoff

Testing at The Axis

At this juncture, Russell 2000, IWM is not only looking for The Danger Point®, but at the close of this session, it’s there.

While everyone else is breathlessly calling the ‘end of the correction’, we’re working the market from a strictly objective standpoint.

That is, what’s the market saying about itself?

With that, take a look.

Russell 2000, ETF IWM

“What do you see?”

Well, it appears that we’re at the point where it can go either way.

It’s as if the ‘weight of a feather’ could move the market (Wyckoff, 1910).

Positioning

From a positioning standpoint, this is where the risk is least for a short position (not advice, not a recommendation).

Low risk does not mean no risk. It just means a potential inflection point.

Housekeeping

As stated in this update, the short trade via DRV, had a tight stop. That position was exited early in the session with a ding (loss) of about 4%.

Moving on to the market at hand.

David Weis mentored his students to look for trades at the ‘edge of the lake’.

We’re there with the price action of IWM. Several attempts (up to a point) to position short are to be expected (not advice, not a recommendation).

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

Bonds In Trouble … Rates Higher?

August 17, 2024 By in Bonds, David Weis, Federal Reserve, Interest Rates, TLT, Uneducated Economist, Wyckoff

The Water’s Fine, Come On In

The financial press and their lackeys, expects the Fed to pull a rabbit out of a hat and lower rates.

The public’s perception seems to be:

‘Happy days are here again’, if rates get lowered, I’ll spend and spend. I can’t help myself, there is no end. So, get rates lowered, again.

Wyckoff warned about the financial press over a century ago. Since then, not much has changed.

In fact, it’s probably worse.

The public thinks rates are coming down. It’s the ‘credible threat’ as Uneducated Economist puts it. The Fed ‘threatens’ to lower rates, and it ‘happens’, sort of.

Actually, rates aren’t lower, but the market has distorted itself, as if they were.

So, let’s get past the narratives and go straight to the truth, price action in the bond market.

Long Bonds, TLT, Weekly Close

As my mentor Daivd Weis used to say: “What do you see?”

I’ve already marked-up the chart and I see one Wyckoff Up-Thrust, reversal, after another (not advice, not a recommendation).

That, along with exhaustion spikes in Force Index, at or near significant reversals.

The ‘Scary’ Part

Wyckoff analysis is not only price action, it’s volume as well.

Look at the volume in TLT, over the past year.

Massive inflow and what has price done? It’s gone essentially nowhere.

Wyckoff called this ‘Effort vs. Reward’. Lots of effort with little (net) reward.

Add to that, a potential exhaustion spike in Force Index (far right side, purple circle).

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

Stop … Drop … Trend

August 4, 2024 By in $SPSIBI, Biotech, David Weis, LABD, LABD-24-16, SPBIO, Wyckoff, XBI 3 Comments

Early Signals

It’s never too soon to look for a trend.

The daily chart of biotech XBI, may be showing us early signals of a trend as well as trading channel.

Back in the day, when being mentored by David Weis, he would typically start the session by putting up a chart on his computer (with me logged in remotely) and then ask:

“What do you see?”

More importantly, he did not ask, what I ‘thought’ or what the Fed was doing, or any other mainstream form of distraction. No, it was always “What do you see?”

So, we’ll do the same.

Biotech XBI, Daily

We’re moving in close with the (un-marked) 3-month, daily; what do you see?

Two things should be noticed almost instantly.

Frist: Heavy volume at the last session this past Friday.

Second: Price action (the close) is hanging in ‘mid-air’ with the next support level over two-points away, near 94.0.

Now, for the marked-up charts.

We’re using the ‘reverse’ trendline technique, presented in the Weis video to determine a potential right side trendline (black dashed line).

Next, we have the Up-Thrust on the daily which is also the right side of the ‘double top,’ shown on the weekly.

Taking both timeframes together, implies a significant inflection point (not advice, not a recommendation).

Anything can happen and the market could recover at the next session.

We’re below support (now resistance) and therefore, technically, in Wyckoff ‘spring’ position.

However, probabilities indicate we’ve had a downside pivot of some significance. That, along with heavy volume at Friday’s session would imply follow through at the next session (not advice, not a recommendation).

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

CORN … At Lows, Stops Dead

July 6, 2024 By in Corn, David Weis, Derecho, ice-age-farmer, Wyckoff

Penetrates & Holds Below Support

Penetrating and holding just below support, we know what that means.

CORN is at The Danger Point®, in spring position (not advice, not a recommendation).

The chart below covers over four-years of price action; within that, we have at least three technical items to cover.

Somebody Always ‘Knows’

First, how does volume in CORN, go from basically nothing, to increasing over 400%, six weeks before, the perfectly timed and positioned (in the corn belt), ‘Derecho‘.

That location is identified as ‘What’s This?’

As Wyckoff said a century ago: ‘Somebody always knows something and that ‘something’ shows up on the tape’.

CORN Fibonacci, 8-Day

Second, is the successive decrease in downward thrust over the past three-years; at this point, nobody’s watching.

All of that brings us to the third technical point.

CORN has retraced to support (blue line) which just happens to be a Fibonacci 61.8%, level; penetrates that support and so far, has stopped dead.

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

Biotech … ‘Back-n-Test’

June 10, 2024 By in $SPSIBI, Biotech, David Weis, LABD, LABD-24-12, Prechter, SPBIO, XBI

Watch The Volume

‘If, on the next pull-back, volume contracts, the spring has been tested …’; David Weis

On the chart, that’s what we have.

Today also looks to be an apparent 50%, retrace on Fibonacci Day 3, from the June 6th, reversal.

Taking it all together, the next session(s) could be very interesting.

Biotech XBI, Daily (inverted)

Is it textbook?

We have a spring set-up penetration (resistance non-inverted), a swift move upward and now, a test back to 50% (level not shown), on contracting volume.

If the test is complete, the obvious expectation is for a higher open (lower non-inverted) at the next session (not advice, not a recommendation)

Rule of Alternation

Using this update and the discussion of ‘alternation’, we can already see price action is more volatile and so far, has ‘simple’ form.

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

Stops … How & When

June 3, 2024 By in David Weis, Dr. Elder, SOXS, SOXS-24-07, SOXX 1 Comment

The SOXX Example

‘Set the stop and walk away’.

Those familiar with the David Weis trading video, know that phrase well.

The entry analysis is done, the trade entered and now, the management of that trade (not advice, not a recommendation).

The SOXX & The Stop

We’re only part way through today’s session; it’s already been a very busy day for the SOXX.

A gap-up open that was quickly retraced. Now, we’re trading lower, hovering around 231.50

Elder said years ago, ‘when the market is at a reversal point, there’s a lot of turbulence’.

We have that for sure in this case.

Moving on to the chart

Semiconductors SOXX, Daily

Stated in a prior update, a short position on the SOXX would have an initial stop of 243.63.

As a result of this morning’s action, it’s reasonable to move that stop lower (not advice, not a recommendation).

The reason to move lower so quickly, has been defined by the market itself.

We’ve already had a sharp opening gap-higher where the bulls (may) have given it all they have.

That level was quickly retraced, inferring the bears are (now) in control.

If that level is threatened, SOXX moving higher, then bulls have regained control, likely to move higher, still.

There’s nothing else but ‘set the stop and walk away’. 🙂

Of course, if one is using the leveraged inverse fund SOXS for a short position, the stop level chosen would correspond to the SOXX, above (not advice, not a recommendation).

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

SOXX … About To Pivot?

May 9, 2024 By in David Weis, SOXS, SOXX, Wyckoff 1 Comment

Downside Energy & Acceleration

It’s been three weeks since the SOXX, competed nearly an 18% plunge that started back on March 8th.

Price has action rebounded since then.

However, in the past several days, it has completed an upside test and now (as of 12:05 p.m., EST) is posting a potential reversal to the downside (not advice, not a recommendation).

The 3-Day chart shows us the prior move had the second largest downward thrust energy, ever, for the index.

Semiconductors SOXX, 3-Day

The last downthrust energy, the largest ever, kicked off a decline lasting from January of 2022, to October the same year.

Moving closer-in on the details we have the following:

Do we have a ‘mini’ Up-Thrust, in the expanded view?

Whether the SOXX, is about to reverse down or not, one thing looks clear, it’s at The Danger Point®

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

Silver Top … Part IV

May 3, 2024 By in David Weis, DUST, GDX, GDXJ, Gold & Silver, Gold Miners, JDST, SLV, Wyckoff, zsl

Below Resistance

When the upside comes to a halt, it’s the ‘evil manipulator’s’ fault.

At least, that’s the common lament from our friends and pundits, alike. 🙂

Just a reminder, the markets have always been manipulated.

Back in the day, Wyckoff understood this. He sought to find out through price action, the desired (market) outcome of those ‘manipulators’.

By using his technique and reading the tape, the most probable direction for silver (SLV) was either sideways congestion or downside reversal.

The last update, link here, had this to say:

“If we’re in an up-thrust about, to reverse lower or consolidate, this is the type of market behavior to expect (not advice, not a recommendation).”

From then, we see SLV has moved lower.

Silver SLV, Weekly

Can reversals themselves, be reversed?

Could SLV, somehow gain traction and move decidedly higher? As David Weis used to say, “Anything can happen”.

However, at this juncture, we have SLV closing lower the past two weeks. Volume was steady and elevated, indicating downside pressure.

Separately, the miners are struggling (especially the Juniors GDXJ) at resistance.

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