Print High & Close

The table lists well known index ETF’s; along with most recent highs and current (Friday) close:

All the usual suspects are there:

S&P 500, SPY, The Dow 30, DIA, Nasdaq, QQQ, and on.

What’s also listed is how far each index (ETF) is from its most recent all time high or ‘recovery’ high (in percentage terms).

Obviously, one of these is completely out of bed: Biotech, IBB

We’ll be discussing the technical condition of biotech tomorrow. For now, the updated ‘project’ chart’s included below:

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.

All Markets Down

Pre-market action has all major indexes trading lower; SPY, DIA, QQQ, SOXX and IWM; all down.

Real estate, IYR has no real pre-market volume (20-shares) so its open is unknown. However, inverse fund DRV, does have volume (3,700 shares) and its action is up about 4%.

The daily close chart of IYR (above), has price action contacting an established axis line.

That was yesterday. Over the past two-weeks, as price ratcheted higher volume has declined (circled area enlarged).

That decline indicates lack of commitment at these levels.

Yesterday’s close also put IYR firmly in up-thrust position (ready for reversal).

Over the past week, short positions were opened using DRV (not advice, not a recommendation)

Average price of the short equates to DRV @ 9.92; not far from current pre-market trading.

If IYR posts a new daily low (below 86.62), it’s another data point the anticipated reversal may be at hand.

The rising action has changed the P&F forecast reported a few days back. Updates will be forthcoming.

If this is the start of a sustained reversal, the plan is to build the short position as price action dictates.

The downside of the entire market (S&P, Dow, etc.) is immense. Commercial real estate is especially vulnerable. Price action itself tells us that.

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.

Dow, S&P, Outside Down

So, this is it?

As this juncture (11:06 a.m. EST), both the Dow and S&P have key reversals; and now the QQQs, and Russell 2000, have just joined them.

If they hold and decline from here, reversing from all time highs, we can add that data to our empirical “Holiday Turns

Holiday turns … markets tend to reverse just before, during, or just after a holiday week.

In the biotech arena, this morning’s gap higher (IBB) closed the distance from price action to the stop for inverse funds BIS and LABD.

That closure opportunity was used to increase the short position (via BIS) in one of the managed accounts.  Not advice, not a recommendation.

The IBB bearish divergence is beginning to take shape.

Positions:

Note: “Close” prices as of 11:03 a.m. EST

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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.

Dow Forecast: 31,300

The Dow can either reverse right here or breakout higher from its wedge.

Since the trend is already up, a breakout to the upside is more likely.  Such a move brings in a forecast to around 31,300.

The daily chart below has the last part of the wedge expanded and posted at the bottom of the chart.

Important to note is the location of the Gold (GLD) bull trap. 

Recall, the firm went heavily short (via JDST) on that Friday and had to wait over the weekend to find out if the analysis was correct.

This excerpt (emphasis added) is from the November 7th, update.  It was a Saturday; we’re already short and waiting.

“No doubt, there are a lot of well respected traders, analysts, YouTuber’s that are on the bullish side of the market.  Here are just some examples, herehere, and here.

So, at this juncture, this firm is taking the opposite side of the trade with its re-established position in JDST.”

The following Monday in the early morning hours, gold prices collapsed.  The bulls were trapped.

As the market opened with gold down hard, the Dow and S&P both spiked up in what’s now a terminal wedge.

‘Terminal’, because this type of price action typically comes at the end of a sustained move … up or down.

At this juncture, the firm is positioned short gold (via DUST) with a tight stop (not advice, not a recommendation).

The stops (two trading accounts short) are not mental, out of the market but are actual open GTC stop orders. 

That way if there’s an internet upset or power grid problem, the in-the-market stops will provide some amount of protection.

All of the above may be an excellent analysis of current conditions. 

However, behind the scenes, the macro or the real agenda, is deadly serious.

The ‘plan’ all along is to destroy (and subjugate) the middle class.  That’s been in the works for decades. Neo Feudalism.

ShadowStats reports here, real unemployment spiked to 35% early in the year and has come down to just over 25% now.

That level is still above 1930s, depression-era numbers and we’re just at the first wave of middle class destruction.

Throw in more economic turmoil and a stock market crash.  Then we have ‘fait accompli’.  Only a tiny remnant could be left unscathed.  

Note the picture at the top:  The haves and have-nots.

From The Money GPS: ‘The chasm in-between the haves and the have-nots, grows every single day’

Self employment is the key.  It’s not a guarantee but it does offer flexibility and most importantly it may offer some extra time.

The above statements may seem harsh (possibly outlandish) to those not yet awake.

To help in that area, two links are provided here and here.  See for yourself whether or not we’re at a critical juncture.

Based on yesterday’s analysis, the expectation is for gold and the miners (GDX) to continue lower.

If they do and the markets (Dow, S&P) continue higher, it’s just one more indication the time for reversal is near.

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.

Before The Open

In the pre-market (8:52 a.m. EST) action continues to grind higher.  Both the Dow and S&P have posted new highs thus negating the Holiday Turns scenario … but not by much.

Important to note is each market continues to post on the underside of a long-term trend-line.  The Dow chart (DIA) is farther down this post.

Also added to the chart is the dashed trend-line underneath the recent price action.  A wedge is being formed; typically last stop before reversal.

In other markets, looks like Biotech may continue higher but along with the others, action appears labored.

The short position could be stopped out at the open. 

This area of price action is where cost of being wrong is least.  We’re at The Danger Point.

Update: 9:04 a.m. EST: Both AMGN and MRNA have now posted lower in pre-market.

Stopped out does not mean there’s no opportunity.  The bearish MACD divergence is still there.

If IBB continues higher, the original ‘150’ target is back in play.

The market extremes are still there:  Bonds and the Dollar are short the most in history.  Stretched all around.

It’s not unreasonable to expect several attempts to position short.

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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.

Was That The Top?

“If the market (S&P, Dow, NASDAQ) opens lower tomorrow, Friday and continues decisively lower, we might add Tuesday, November 24th, 2020, as another empirical data-point for Holiday Turns.”

The quote above was from last Thursday’s update.

Well, it looks like the market waited one additional day to make its turn.  For the Dow 30, last Tuesday the 24th, was indeed a high.

We’ll see how far this one goes.  It’s a high but whether or not it’s THE high is not known.

Given the market conditions being reported on this site, long positions look tenuous indeed (not advice, not a recommendation).

The ever helpful, knowledgeable financial media says ‘it’s the best month since 1987’.  No elaboration on that one is necessary.

The takeaway is, understanding that market pivots tend to occur during a holiday week … when no one is looking.

In other markets, gold (GLD) continues lower and is attempting to take the miners (GDX) down as well; currently oscillating near unchanged.

Biotech pushes into its breakout but at this juncture (11:53 a.m. EST), it looks weak and may not have energy to get to a new all time high.

It should be obvious the manipulators are hard at it … attempting to get the sector (IBB) to move high enough for gains on the long side, then turn around and establish low risk short positions.

Wyckoff noted that under such conditions (exit longs, enter shorts), daily volume will be two-to-three times greater than typical.

Chart of DIA is below … showing reversal since last Tuedsay, the 24th.

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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.

Empirical Evidence

Market tops and reversals tend to occur just before, during, or just after a holiday week.

Will this market be any different?

Empirical data collected over the years (linked here) shows a tendency of the markets to reverse during holidays.

The most famous reversal was September 3rd, 1929.  That was the day after the Labor Day Weekend.

Yesterday, the Dow 30, made a new all time high. Looking at the chart (expandable version here), it’s in a very narrow range and hitting the underside of a long-term trend line.

This is a low risk area. A DXD (2X inverse fund) push past 13.22, could be considered an entry signal; stop at DXD 12.96 (not advice, not a recommendation).

There’s bound to be a lot of chop if and when this market reverses; the firm is leaving this one alone … for now.

Reversal chop was clearly seen on the GDX.  It banged around for months before getting into position for a decisive move lower.

Trading inverse funds (for best profit) requires a steady, sustained directional move. 

Those moves typically do not appear right at a reversal transition.

If this is it … if this week is the high and reversal for the S&P, Dow and NASDAQ, then it’s likely the market will chop and set up conditions before a sustained move lower.

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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.

Bond Reversal

In the past three days, bonds (TLT) penetrated support and stopped dead.

Anytime a market penetrates support or resistance and halts, it’s an indication that something’s up.

Either the market‘s absorbing transactions at that level to continue on, or it’s a reversal about to happen.

With all that’s known on the short position by the speculators as well as another Van Metre report, bank lending standards, probabilities point toward bond reversal.

The dollar is already reversing higher.  Gold has been viciously slammed lower and the overall market’s hovering at all time highs.

The Dow edged lower at the last session. This session in the pre-market (9:01 a.m., EST) it’s lower again at -1.94 points or -0.66%.

If the Dow (DIA) gets below the 290- area, it’s below resistance and another move higher may be difficult indeed.

We’re short the sector via DXD (not advice, not a recommendation). A new daily low for DIA will allow our position’s stop to be moved to DXD 13.49.

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.

Mind The Gap

For the past past five years, the Dow 30 has filled every gap … except two.

The ‘election’ gap of 2016 and the ‘election’ gap of 2020.

Looking at the technical condition of the Dow, it’s at an extreme. 

Testing the underside of a trend break while at the same time in a reversal (Wyckoff up-thrust) condition.

A ‘reversal condition’ does not guarantee the market heads immediately lower.

It points out the probabilities that some type retrace may happen before a move higher.

In the current situation, a significant retrace would put the Dow well below resistance; adding to the bearish assessment.

Pulling out to the larger time-frame, the weekly chart puts the current pre-market moves (as of 8:51 a.m. EST), DIA up 0.51%, in perspective. 

The market may oscillate attempting to move higher.

At least three conditions are working against such a move: 

Underside trend line test

Up-thrust (reversal) condition

Lower gap area yet to be filled.

We’re short the Dow via DXD (not advice, not a recommendation) with hard stop, currently set at DXD: 13.13

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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.

Miners (GDXJ): What’s Next?

It’s possible during the last session gold (GLD) received a final mortal wound to the hyperinflation argument.

Price action in the December contract (GCZ20) dropped over 100 points in a matter of hours.

A retrace is expected … it’s just part of market behavior. 

However, even as gold edges higher, the Junior Miner’s, don’t seem too eager to follow suit. 

Price action in GDXJ has risen just slightly with JDST down 0.50% in pre-market.

The dollar (UUP) has reversed as expected.  It’s got a long way to go higher for any kind of test on wide, high volume action.  Dollar higher, gold typically, lower.

The short position in the Dow (DXD) has retraced somewhat in the early hours. 

As it stands now, the retrace is about 1/3rd of the overall gain thus far; perfectly acceptable.

The focus for the firm’s trading at this point is on the Dow and related markets.  If the position is increased at these levels (and the analysis proves to be incorrect), it could be stopped out the same day.

So we’ll wait to add … for now.

Separately, it should be noted that every single market assessment in the previous update was correct:

GDXJ in up-thrust reversal condition … check

GDXJ finished at high on Friday, Monday’s typically down … check

Gold retraced to 50%, lower price action expected … check

Dollar in its own reversal set-up … check

Dollar up, gold down … check

All that list means, is at this juncture the markets are being correctly interpreted. 

Those interpretations are being done intuitively and without indicators.

Intuition can be skewed by events unrelated to the markets.  For now, it’s operating correctly and we’re going to focus on the Dow.

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.