Category Archives: David Weis

Separating From The Crowd

July 17, 2021 By in Biotech, BIS, David Weis, IBB, LABD, Oswald Chambers, SPBIO, The Speck 1 Comment

Work and think in isolation

Intuition does not ‘collaborate’

If you’re serious about your growth with market analysis and trading, at some point in the journey, you’ll discover this fact:

The most successful and effective market speculators operate alone.

Livermore had his office with the ticker, ‘board boys’, and not much else.

Wyckoff (from his autobiography) refused over and over the overtures of his wealthy clients to establish a more personal relationship.

The late David Weis was the same; managing his own account.

One difference with him; he provided a mentoring service that passed on his valuable insight.

It was a steal of a price (back in 2011) … just $1,500.

Personal Anecdote (being mentored by Weis):

It was April, of 2011:

As Weis interviewed me on the phone, asking all sorts of questions about my background (engineering), my parents (my late father, a Yugoslav national, shot by Germans in an attempted execution during WWII), and my trading objectives, it became clear to me, I would pay whatever price necessary to gain an audience with him.

This all took place before his website was complete and before his book was published. It was sort of a ‘golden time’.

Stretched Growth:

Weis traded the futures markets. If I was to be mentored by him, I would need to get up to speed and trade futures as well.

I knew almost nothing (except they were highly leveraged) about those markets. However, I was determined to learn very quickly.

During the phone interview, which lasted maybe forty minutes to an hour, he did not mention (and I did not ask) the cost of his services.

As the call progressed, I was literally getting sick with anticipation.

Coming to a close, almost absentmindedly, he said: ‘It’ll be $1,500’.

I fully expected him to say, and would have gladly paid $5,000 or more … which was the going rate for a typical trading course.

He then ‘suggested’ that I open a futures account; our mentoring sessions would start the next week.

Fast Track:

After that call, three things happened in quick succession.

First: A check (he was old-school) was mailed off to him in Boston so that it would clear before the next week.

Second: I contacted TradeStation and got their futures paperwork to open an account. That happened quickly and $15,000 (an amount suggested by Weis), was wired to the account.

Third: Buy the time of the first session, I already had the futures account set up and had determined what markets I would be trading: The LIFFE mini-futures (now part of ICE Futures Europe) for gold and silver.

On The Fly:

One last thing about trading futures and learning quickly.

I noticed about two weeks into trading silver, the volume on the contract I was in, started to drop off.

I did not understand why the liquidity was drying up … that is, until I checked my e-mails.

Turns out, I was about to ‘take delivery’, and pay $37,000 for a bar of silver if I did not exit the contract (that day).

The entire time with Weis was a growth experience. Very painful most of the time as knowledge had be acquired on the spot.

During our sessions, I would have the phone to my ear and be feverishly taking ‘screen shots’ of his computer (via gotomeeting,com) as he progressed through the session.

This link is probably as close as one will come to a typical mentoring session.

No Group Consensus:

Going to the link and watching for even a few minutes, it’s obvious this type of analysis is in a class of its own.

Nowhere in the video does he mention P/E ratios, Sales-to-Book or any number of useless metrics.

Deciding to pursue this type of trading, will of itself, separate you from the crowd.

The mainstream financial press will never present this level of detail. The general pubic does not have the intellectual capability or discipline to really get down and craft this skill.

Of course the financial media, YouTuber’s and the like, are all too happy to cater this (mediocre) crowd by showing their supposed prowess on dissecting financial reports and/or pontificating on the latest Fed speech.

Little does the public know, this type analysis (fundamental metrics) is just a ruse; a distraction promulgated over the life of the markets to distract and disable the masses.

The fact that ruse keeps going, is proof in itself of its effectiveness.

Which brings us, once again, to biotech.

SPBIO (LABD): Analysis

In this case, which could be one of a kind in history, the fundamentals are important.

Those in the biotech sector have intentionally (depending on whose data is used) fatally poisoned millions if not billions.

Their natural immune systems have been forever destroyed and their life expectancy drastically shortened.

Even so, this fundamental backdrop must not cloud interpreting the market behavior at hand and the Wyckoff analysis.

We’ll start as Weis does in the video link, with an un-marked chart. Daily close of inverse fund LABD:

Next we’ll show how the right side action is alternating its behavior:

At this juncture, the market is not able to retrace.

Price action from the last intermediate low in late June, has formed a double, then single, and then no bottom.

Adding in the repeating trendline study, LABD is currently near a contact point on the right side trend:

Price action itself points to more downside for SPBIO (LABD higher).

With the overall markets closing poorly on Friday, the implication is for lower action in the coming week.

Consumer All Done:

The post on Friday, showed how the consumer is literally spent.

About an hour later, Steven Van Metre came in with additional details.

Then, couple that with Dan’s (iAllegedly) assessment: “The Party’s Over”; the pressure continues to build.

We might take the example of lumber futures as a model for upcoming price action; essentially, straight down -66.3%, in 48 trading days.

Wistful Conclusion:

David Weis is now gone (passed away last year).

After listening to his voice once again, I have let it personally admonish me to remain focused and diligent.

Even a decade after our mentoring sessions, with focused effort, the search for mastery is never ending.

To borrow a quote from Oswald Chambers: “One must determine to be limited and focus their affinities.”

We’re at a critical time in world history and that’s not overstated.

Our conditions have brought so many cowards to the fore.

In a way, it’s a tremendous public service.

It’s clear to see who is leading and who is cowering in place.

If anyone has a hope of surviving (even prospering) in this environment, for some it will be taking control of their own market decisions; separating themselves from those who want them to remain ignorant.

Stepping out into the raw edge of life, has no guarantee of success.

However, what is guaranteed, is stretching of oneself into a new level of thinking, experience, and wisdom.

That, is its own reward.

Stay Tuned

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.

Economic Collapse … The Model

July 15, 2021 By in Biotech, BIS, Bonds, David Weis, IBB, Jerimiah Babe, LABD, SPBIO, TLT, ZeroHedge

1:44 p.m., EST

South Africa shows us how it’s done

‘Hey J.B., when’s the collapse?’

That’s a comment often seen on any number of Jerimiah Babe’s updates; openly mocking his doom and gloom assessment.

Whether he’s at the local homeless camp in Los Angeles, or in his home next to the golf course, the question remains the same;

‘J.B., When’s the collapse?’

Sometimes his response (if he’s at home) is to turn his head to the window and say “Have you looked outside?”

A good number of American’s have become so pathetically weak, ignorant, and just (to overuse the word) plain stupid, they expect to sit on their newly built patio deck (using last year’s stimmie check) and observe the fall of the U.S. from the comforts of their own back-yard.

Of course, there are some (including this author) who are first generation Americans. Their parents and grandparents emigrated (or escaped) from communist countries.

Those people do not have to ‘wake up’; they were never asleep.

Coming Attractions:

South Africa gives us the model for what’s in store … at least for sections of the U.S.; probably starting first with the blue sates (we’ll see).

You might say, it’s already happening in Portland.

One news item of note shown in this report from South Africa, is neighborhood patrols.

If that’s coming our way, then we’ll need to get outfitted (if not already). Here’s a good place to start.

All of which, brings us to the markets.

Bonds (TLT):

Yesterday’s update showed how the so-called ‘bloodbath‘ was actually a set-up to go long (not advice, not a recommendation).

It didn’t take long for bonds (TLT) to give a Weis method ‘buy signal’. That happened at the open today.

The bull move in bonds does not confirm the ‘re-opening’ hype. That in itself, should be all that’s needed to make decisions.

It is interesting to note; on sites like ZeroHedge, there’s no talk whatsoever that biotech has (already) reversed and is leading the way down.

As of this post, inverse biotech fund LABD, is up about 38%, from its lows of late June. It appears poised for yet another breakout; lower for SPBIO and higher for LABD.

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.

Garbage In … Garbage Out

July 14, 2021 By in Bonds, David Weis, TLT, TMF, Van Metre, ZeroHedge 1 Comment

10:49 a.m., EST

Another day spent digging in the trash

This morning’s perusal through the usual suspects of finance, leaves the feeling you’re sifting through garbage.

Every once in a while, like yesterday’s post, there’s something useful.

Most times, not.

Today is no different.

Here we have an article about the ‘bond bloodbath’ and how inflation is not transitory.

Instead of falling into the trap of contesting the current false narrative, we’ll take a different approach.

How can the constant stream of financial nonsense, lies and miss-direction, be put to use?

Since the article linked above is about bonds, we’ll use that for our example.

The Bond Market (TLT):

First, the David Weis training video (linked here) has been discussed many times over the years.

We can’t make recommendations but we will make a suggestion; that is, whatever the video costs at this point is well worth it.

Our TLT market entry technique (below), is taken from that video (not advice, not a recommendation).

We’ll start with an unmarked chart of TLT. The ‘bloodbath’ referred to in the link above, is yesterday’s down-draft.

Steven Van Metre has already laid the fundamental groundwork (for about a year) on why bonds will rally.

We’re there now but the market’s not going to let anyone get positioned long easily.

The next chart shows how the Weis technique can be used to get aboard the rally.

Yesterday’s so-called bloodbath, is really a trade entry set-up.

Notice how the market does not come back to the ‘entry’ levels. This chart fits the Weis example to perfection.

The bond market’s signaling there’s something very wrong with the ‘reflation’ or ‘re-opening’ trade.

The reflation, re-opening does not exist.

The economy is not coming back.

Summary:

It took over twenty years of searching to stumble across the Weis video. As with a lot of things in life, it was almost by accident.

After watching him dissect the ‘Apache Spring’ (APA) trade, it was obvious the search for ‘truth’ had ended; the education was about to begin.

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.

SOXX: Signs of a Top

July 1, 2021 By in AA, David Weis, Holiday Turns, SOXS, SOXX, UAL 2 Comments

10:56 a.m., EST

Semiconductor SOXX, at Danger Point

‘Spring-to-Up thrust’ is a common price action phenomenon.

Credit goes to the late David Weis for noting this behavior in one of his daily market updates from years past.

Now, we see it in action with SOXX.

As with airlines, semiconductors are highly susceptible to economic changes. Both operate on thin margins and have high capital costs.

Airlines (at least UAL and AA) have never recovered to new all-time highs. Maybe the semis went higher because of all the contract tracing that’s being projected.

However, noted in yesterday’s update, there’s a chance there won’t be much to ‘trace’; we’ll find out very soon.

SOXX is at the danger point; risk of a short position (not advice not a recommendation) is at minimum.

As an extra reminder, we’ll add a frequently discussed theme for market tops: ‘Holiday Turns‘

Emperical data shows that markets tend to reverse before, during, or just after a holiday week.

This week could be one of those.

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.

Random Notes

June 6, 2021 By in David Weis, ice-age-farmer, Random Notes, The Speck

The usual suspects for the week.

No. 1

“Intermittent reinforcement, is a hook.”

That’s what the late David Weis told me during a mentoring session years ago.

Being told a half truth, fools the easily fooled into thinking that maybe someday, they’ll be told the whole truth.

It’s a psychological hook that never ends.

The so-called news organization at this link, likes to act like it’s part of the opposition; It feigns surprise as it ‘reports’ on carefully crafted, selected, intermittent reinforcement topics.

Nothing happens at this level that’s not planned.

Nothing.

No. 2

Cyber attack at largest meat packer.

Just one of many hits taking place in the cattle industry.

The cattle livestock/ranching sector continues to be under increasing (planned, intentional) attack.

As Ice Age Farmer reports, both Colorado and Oregon are working to outlaw cattle ranching; making it too expensive to raise beef and thus eliminating the practice.

Meanwhile, back at the ranch … literally, there’s an independent meat processor near Fort Worth.

Personal anecdote below (skip to No. 3, if desired)

There’s a ‘hole in the wall’ meat processor in a town near Fort Worth.

It’s located well off a main road and next to several nursing homes. Vacant, weed-overgrown lots, surround the building.

You have to navigate a giant pot-hole in the dirt parking lot to get to the metal barn-like entrance.

Once inside, you’re standing on a cement floor and facing a long refrigerated display case … probably, 20ft – 25ft, long.

It’s at that point, you realize you’re not ‘inside’ but actually underneath a metal overhang that was attached to the outside of the main building.

From the amount of rust visible and the worn paths in the concrete, it looks like this ‘addition’ took place at least twenty years ago.

While I was there, a man who had driven from Sachse (pronounced Sacks-see) was there to pick up his order.

Sachse is on the other side of the Dallas-Fort Worth metroplex. It’s over 60-miles away. Not far in Texas, but still.

This is the type of place that will process your typical deer or other game kill for the ‘Bubba’ type hunters.

That is, until now.

There’s a sign at the entrance that says because of the overwhelming increase in business, game processing will no longer be available.

That sign is right next to the “Help Wanted” sign.

So, that’s how it’s mapping out … at least on that day in this town next to Ft. Worth.

The infrastructure is fragmenting.

Extrapolating the example above, it looks like small independent ranchers and processors will attempt to pick up the slack … but it’s not likely to be enough.

The real constrictions to the food supply have not even started. This small hole in the wall, is already overwhelmed.

No. 3

One reported effect of speck injection is being termed “Jab Freeze“.

The link shows what that may look like. Source has not been vetted.

You be the judge.

No. 4

Nurse calls out her corrupt and cowardly co-workers.

At time stamp 6:53, she calls them “The Devil’s Little Helper”.

Taking money to knowingly inject people (and now, children) with a lethal concoction is betrayal.

I wonder if that extra pay amounts to ‘thirty pieces of sliver’.

No. 5

Don’t drink the Kool-Aide

Remember that?

Late Saturday night, an episode of “Corrupt Crimes” was aired that covered the Jim Jones massacre.

Did you know there were survivors? Want to know how many?

There were 33 survivors.

That puts the whole event in a different light doesn’t it?

Stay Tuned

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.

Biotech: Now, It Gets Interesting

May 28, 2021 By in Biotech, David Weis, LABD, SPBIO 5 Comments

1:39 p.m., EST

Retrace to 23.6%, rejected.

Shallow retrace indicates severe weakness.

Sustained downside potential.

The inverted chart of SPBIO above, shows price action has touched the 23.6%, level and is reversing.

The next chart has yet another Wyckoff spring set-up … equivalent to a Wyckoff ‘up-thrust’ on the regular, non-inverted chart.

Inverse fund LABD, is current trading at 22.77 – 22.83; far away from the session low at 21.77.

On a 4-Hour basis, the current bar has posted a new high.

The high for the morning session came at the open; 23.05

That high was exceeded when the next 4-hour bar posted at 23.10.

Why is that important?

It weights the probability to the upside for LABD.

That in turn weights probability we’ve seen the last of the downward corrective moves for LABD.

If so, we’re positioned for a major decline in biotech SPBIO.

If not, we’ve got an absolute hard-stop @ LABD 21.77 (not advice, not a recommendation)

At this point, it’s time to “Set the stop and walk away” as David Weis put it in his video.

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 ‘Gut Check’

May 12, 2021 By in Biotech, David Weis, LABD, Project Stimulus, SPBIO 1 Comment

9:09 a.m., EST

If there’s going to be a big move, the market will make sure you’re not along for the ride.

The proverbial ‘gut check’, as David Weis used to call it.

It’s an adverse move that’s intended to shake any (all, if possible) weak hands out of their positions.

How will we know if that’s what’s going on with biotech’s, SPBIO?

Yesterday, was an upside reversal bar on the daily SPBIO, chart. Will the market go higher (LABD, lower) from here?

The first clue will be the open.

If SPBIO opens lower, with inverse LABD opening higher, we’re on the right track for more biotech downside.

If LABD makes a new daily high … above yesterday’s LABD, 30.42, high, we have confirmation of a shake-out.

Right now, we’re still in the pre-market.

However, LABD is already trading up between +3.5% – +4.7%, which weighs probability to more upside … downside for SPBIO.

If SPBIO somehow makes a new daily high (LABD, new low), the bulls are gaining a foothold.

At this point, the Project Stimulus account remains unchanged (not advice, not a recommendation):

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.

Fear and Greed

April 30, 2021 By in Biotech, David Weis, IBB, LABD, SPBIO, Wyckoff

12:31 p.m. EST

Of the two emotions, fear is easier to trade.

Trading professionals prefer down markets.

Even in his trading video, the late David Weis remarks … ‘I have a preference for down markets …’

Profits come nearly twice as fast and the bottom is easier to detect.

With that in mind, the daily chart of inverse biotech fund LABD, has been noted showing both emotions:

Extreme fear shows up as spikes at the trend line. Also noticeable, the spikes are widely spaced.

Greed on the other hand, is spaced closer and harder to detect. Remember, we’re looking at the inverse (LABD); fear and greed locations are swapped.

Moving on to the set-up, the Wyckoff spring:

Considering the current situation … i.e. valuations, margin debt, retail participation extremes, the above forecast is a modest one.

A potential doubling in value (measured move).

The expectation is for LABD to contact the upper trading range somewhere around 27.50 (not advice, not a recommendation).

If it does and then breaks to the upside, a standard measured move (trading range distance, magenta lines) would target the 40-area.

At this juncture, the market (SPBIO) is giving no overt indication of imminent collapse.

This is how markets work.

If we do get the expected wipeout, be prepared for the usual suspects to come out and say ‘No one saw it coming.’

Stay Tuned

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.

More & Less

April 6, 2021 By in David Weis, DRV, IYR, Real Estate, SRS, ZeroHedge 1 Comment

Volume increases on IYR; range contracts even further.

In what’s beginning to look like its been taken straight out of David Weis’ training video on ‘trend reversals’, volume has surged and range has contracted drastically.

The last update had range contracting down to 1.83% (from 9.77%).

Now we’ve got yesterday’s range down to 0.60%; volume up to 18-million shares … the highest since October 2nd, last year.

One of two things is happening.

It could be absorption for a new leg upward to ever higher, highs.

Or

It could be distribution and ultimate reversal.

There’s certainly enough fundamental evidence to show commercial and residential real estate, may have gone off the cliff.

Still, we have headlines like this, from ZeroHedge.

The key is the “hottest real estate market since 2007”, part. Remember this magazine cover?

We’ve got what appears to be conflicting data. ‘Over the cliff’ on one side and ‘red-hot market’ on the other.

The answer’s in the price action. We’re at a potential (major) inflection point. The market leads the news and not the other way around.

If we’re at the pivot, about to head lower, bad news will be forthcoming after the reversal’s in place.

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.

Early or Late?

March 27, 2021 By in David Weis, DRV, IYR, Prechter, Project Stimulus, Real Estate, Van Metre 1 Comment

It may have been Robert Prechter Jr. that said years ago;

‘You’re either going to be early, or late’

He then went on to say his trading method usually puts him in a little early on the move.

That means there are times when the anticipated direction does not materialize.

So, your either suffering through the pain of anticipated reversal (for seconds, minutes, or days), or you’re chasing the market.

You make the call.

There really is no other choice.

Both methods involve psychological pain.

Referring back to Prechter, he also said some of the best traders he knew were former Marines. By definition, they are well trained to deal with pain.

My former mentor, the late David Weis would say after hit on a set-up, if conditions warranted, he would enter again; as he told me, he would ‘stick his chin out’ and effectively tell the market to ‘prove him wrong’.

It was an interesting choice of words for him as one can see from his training video …. he had a distinctive chin.

Trading Style:

The trading style presented on this site is a combination of Wyckoff tape reading coupled with anticipating price action.

As inferred above, that means there may (and will ) be times of draw-down while working to enter a market reversal.

That’s where we are now.

Trade Actions:

Yesterday’s upward action in basic materials forced the ‘project’ out of its short (SMN) position. That sector may attempt to make a new 52-week recovery high before it’s ready for reversal.

Analysis: Real Estate, IYR

One market that did make a new 52-week high, setting up technically for a short, is real estate:

The weekly close of IYR has been inverted (turned upside down) to show the unique technical condition.

IYR has created a large terminating wedge that’s in the process of a ‘throw-under’. At times a market will attempt to breakout of a wedge in the opposite direction of eventual reversal.

This type of breakout tends to fail. Based on the dashed line contacting a prior congestion, there’s’ potential to at least hesitate in this area.

The daily chart below provides additional nuance:

It’s clear price action has contacted two prior areas of support – resistance during ‘throw-under’.

Anything can happen but it seems that IYR’s at maximum extension.

On Friday, IYR price action closed just 0.05-points off its high for the day. That high was also a 52-week high.

We’re now in a support-resistance zone.

If IYR is to move significantly higher, it might need additional fuel (a retrace lower) to break through.

Positioning:

The action then (not advice, not a recommendation) was to short the market via DRV.

Once again, the market itself is telling us where to go for opportunity.

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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.