Volatility Event: Newmont Mining

Alignment Of The Bears

“Volatility Is Good”

Volatility cauterizes the emotions. It reveals the market extremes and shows each player’s hand; bulls and bears.

With the market just opened we’re going to look at gold’s last man standing: Newmont Mining.

‘Last man standing’ because, except for two equities far down in Senior Miner’s GDX, no one is anywhere near their mid-November highs.

The take on this: The gold market’s thinning out and ready to reverse.

A really big move

It’s easy to get lost and hypnotized with the day-to-day action. However, by pulling back, one sees the potential for a massive short (the market) opportunity (not advice, not a recommendation).

Implosion Effects: Broker Platforms Go Inoperative

Over and again, nearly each time there’s a big down move in the markets, where the Dow may lose 1,000 points or more, brokerage platforms seize up.

It happens so often; it’s probably best to incorporate it into one’s trading approach.

That’s one of the reasons, if not the main reason to work the short side (not advice, not a recommendation).

Newmont’s Short Clues

The volatility has exposed everybody’s hand on both side of the trade. That’s the good part.

We’ll touch on each technical event separately, starting with the unmarked daily chart:

First off, markets that have wide, high-volume bars, tend to come back and test that bar. We see it below:

Next, price action’s got itself into a terminating wedge; a potential bearish reversal pattern:

Then, we have today as Fibonacci Day 34, from the December 2nd, reversal low.

As this post is being created, NEM just made a new daily high; potentially culminating its wedge terminating move.

Big Fish, Little Hook

As Dr. Elder has said concerning stop placement, ‘You can’t catch a big fish with a little hook’.

So, we have GLD, GDX and GDXJ, in a November bull trap (up-thrust), with what looks like two-months of price action to come back and test.

If that assessment’s correct and it took two months just for a test, whatever happens next, may be on the order of years to resolve itself.

From a trade standpoint, it looks like today’s low in JDST, current open position, JDST-22-01, may be a good place for a stop (not advice, not a recommendation).

Newmont, Reversing

After Newmont posted a new daily high, it’s currently trading below yesterday’s close.

Deflation Pivot-Point

We have the usual hysteria in the gold market but this time, deflationary forces may be overtaking the manic gold bulls.

Case in point:

Existing home sales look like they’re rolling over. All kinds of excuses being made about lack of inventory and the imaginary ‘Speck’ with its new variant.

The one thing not imaginary about The Speck, is this report about what’s really going on.

Massive ‘depopulation’, is deflationary.

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

The Chart Speaks …

Massive Trading Channel In GDX

The past week has been a frustrating one being short the gold market.

Is the current trade, DUST-21-01, in a correction or an outright reversal?

It’s in the green (not advice, not a recommendation) but seems like it’s taking forever to get moving.

Paraphrasing Dr. Elder; He says ‘when in doubt, pull out (or farther out).’

So, we’re going to do just that.

Senior Miners, GDX

The un-marked daily chart is below. The second one is the same but inverted (to approximate inverse fund DUST).

Inverted

From the blank charts, it’s not immediately obvious.

However, the chart below shows GDX in a massive trading channel.

On top of that, today (Friday) may have been contact and verification of the right-side channel line. We won’t know for sure, until next week.

There’re about nine-months of trading action which also includes the two months to create the up-thrust set-up.

Sitting Back

If you sit back and take it all in, one begins to realize the enormity of what’s going on.

The up-thrust set-up was formed in two months. The channel itself, the bigger picture is nearly a year of price action.

From the inverted chart, the spike (downward) December 15th to now, is when the market thinned-out.

That’s when based on the data, funds flowed out of the senior miners and (some of it) into the last man standing; Newmont (NEM).

The stage is set.

Summary

Trades can fail. Anything can happen. That’s a given in the markets.

However, it looks like GDX is at another critical juncture.

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

Talking Turkey

Lessons From Mr. Partridge

From Reminiscences of a Stock Operator, ‘Turkey’, aka Mr. Partridge, was much older than the rest.

The rumor in the broker’s office was that he was rich.

Even so, he was not contributing to heavy commissions (i.e. day and swing trading) as far as Livermore could tell.

The other thing was, that he never offered advice.

If a stock tip worked out, he would thank the tipster … if not, you never knew if he took a position or not.

Losing The Position & Psychological Impact

Turkey’s ‘losing the position’ remarks impacted Livermore the most. He recognized that Partridge wasn’t some old duffer; he was an astute speculator.

Losing the position: Not the same as holding a loser.

Maintaining a profitable position during a correction while at the same time, recognizing a big move could be in the works, requires (mental) strength; let the market itself say when to get in and out.

This link has Prechter’s ‘missing out’ story on big gains.

Continuing on with Turkey.

In the book, he said he ‘paid a high price for his tuition’ and does not want to incur a second fee.

Attempting to ‘play’ the market in and out then repeat, by definition, leaves one out of the big move.

It’s not the move itself; it’s the recognition that fiddling with the position and losing it, has resulted in a lost opportunity that will never come back.

The psychological damage is immense.

It’s worse than taking major loss. Watching a move take off without you when you had planned for months (or years) for the set-up, may have left no way to recover.

Which brings us to the market at hand.

Gold (GLD):

This site is not advice, and it does not make market ‘calls’.

Presented here, are posts documenting how Wyckoff analysis is being used to spot market set-ups.

Those set-ups have shown themselves over time to be potentially profitable (not advice, not a recommendation).

The weekly chart of gold (GLD) shows the up-thrust that was months in the making.

We’re going to invert the chart and so, the ‘up-thrust’ now becomes a ‘spring’.

Note:

Back in the day, when I wasted time posting on SeekingAlpha, I would get numerous complaints about ‘inverting the chart’.

They wanted it spoon-fed and did not have the mental plasticity to look at situations from the opposite perspective.

The ‘inverting the chart’ came from none other than Dr. Elder, himself … discussed in Trading For A Living or Come Into My Trading Room if memory serves.

The main interest on the ‘Alpha’ site seems to be pontificating about how sharp your pencil is; how close you can come to guess what earnings (or some other meaningless fundamental) will be at the next release.

I have not been back in years … they’re probably out there still arguing … only this time, the banter may be about which “masks” are most effective. 🙂

But I digress.

Months To ‘Spring’, Weeks To ‘Test’:

The inverted chart of GLD shows it took months for price action to penetrate support and create a spring condition.

Since then, we’ve had a move higher and now lower coming back near support.

Is this a test or a failure of the move?

It was a short week. However, it may still provide actionable data. For example, range of GLD, GDX and NEM, all narrowed. Volume contracted as well.

The inference is, thrust energy is weakening and thus weights the probabilities to a ‘test’ and not a ‘failure’.

Deflation Pivot:

Interestingly, we’re starting the see the consumer has finally reached the limit of their spending. Price are staring to edge lower as reported here and here by Economic Ninja.

Another data point, a bit esoteric, is ammunition. Pices are starting to taper off as well. Most notable is 22-LR.

A couple of months ago, 22-LR was about 0.10 per round (bullet). Looking at this site, we see the cheapest price has dropped to .080/round.

That does not look like much but it’s a 20% decline.

Summary:

Everyone has their own time frame and market approach.

Taking a cue from Turkey, referenced above, I would rather sit through a correction, incur the erosion of profit than exit and ‘click my heels’ as Prechter puts it; then watch the original position move for a huge gain without me aboard (not advice, not a recommendation).

We’re likely to find out very soon if this is a major pivot lower or if somehow, gold (GLD) bulls gain control and drive prices higher.

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

Gold Natives … Getting Restless

Latest Reversal … Exposes The ‘Experts’

When the tide goes out, that’s when you find out who’s been swimming naked.’

No fan, and no endorsement of Buffett but the quote is applicable.

If yesterday’s Newmont analysis holds, meaning, it’s the last stand before another leg-lower, gold bulls might start acting irrationally.

Is it even possible to be more irrational?

Remember their manic prediction of $3,000/oz, gold in months, not years?

Barring a major reversal, the tide’s going out.

From the comments section of this ZeroHedge article, some in the herd are figuring it out as well.

As one of them says … ‘another year to wait before the Great Pumpkin’ (i.e., gold moving higher).

As this post is created, comments continue to pour-in.

Gold bulls are frustrated, confused, pontificating, crypto loving/hating, central bank blaming, it’s all there.

Thus far, there’s not one comment on what price action is actually doing.

Public Service Announcement

This whole business with the financial media and its attendant hucksters (recent examples, here and here) is actually a fantastic public service.

For anyone who’s still able to think (an act of rebellion in itself), it’s clear, or should be, if you’re on TV, or the mainstream media, you’re a shill until proven otherwise.

The good part?

All of this media, podcast, carpetbagging and corruption, plays right into the hand of Wyckoff analysis.

Wyckoff focused on what is … not what should be.

Even back in the early 1930s, he was adamant about ignoring the financial press. ‘You’ll never be successful’, he said if you listen to the hype.

Mixed Messages

On cue to support that statement, is Dan, from i-Allegedly; he reports ‘we’re getting mixed messages‘ in the economy.

Proving the point.

The (Trade) Plan Forward

With the caveat, anything can happen; gold could rally in a couple hours when the futures open, the short via DUST (not advice, not a recommendation), is as follows:

  1. The Set-Up: Complete
  2. The ‘test’ or ‘gut-check’: Complete
  3. The first ‘correction’: On-going
  4. Continuation or Failure
    1. Trend identification
    2. Potential channel(s)
  5. Exit process
    1. Scale out
    2. Full exit
  6. Post trade evaluation

What’s In A Name ?

Even if the trade fails at the next session, it would still provide valuable information.

With that in mind, no matter what happens it’s likely to be referenced in the future; so, it needs a name (or number).

Taking a cue from prior engineering work (creating numbering schemes), the current trade will be identified now, and in future posts, as: DUST-21-01.

Seems straightforward.

The ‘First’ Correction

No. 3, above is titled ‘The first correction’.

This labeling is borrowed from a trade discussed by William Doane, in Dr. Elder’s book: Entries & Exits.

Price action permitting, we’ll discuss how this first correction may be a brief one as opposed to a drawn-out choppy affair.

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.

The Danger Point®, trade mark: No. 6,505,279

Gold … ‘Gut-Check’

To See If You Can Hang On

Gold’s upside test has failed.

Now, it gets interesting.

Over the past four trading days, the gold market got slow and boring.

On top of that, we had Thanksgiving; providing more opportunity to be asleep at the wheel.

As Dr. Elder has said, when the market gets slow, traders start ‘squinting’ at their screens and imagine set-ups that aren’t there.

They forget (in this case) we’re in the middle of a potentially significant, long-lasting downside reversal.

All of this provides the conditions we saw at today’s open. A swift upside ‘gut check’ as David Weis used to call it.

It terrifies the weak hands

They either close out shorts, go long, or both; confused as to the real direction of the market.

How do I know? I’ve done it myself

Such a move, is typically what happens just before a market gets underway in earnest.

Gold (GLD) and the Miners (GDX)

We’re looking at the daily GDX, inverse fund DUST.

The chart below zooms-in on the trend contact points.

There’s a caveat to more GLD and GDX downside.

While gold has made a new weekly low, the miners, GDX, have not.

That leaves the possibility for some kind of upside action; although at this point, it’s low probability.

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

Lowe’s … Re-Visited

Mid Session

Spring, To Up-Thrust, Completes

The daily chart of LOW (above), is how it looked one month ago. This report highlighted, certain market behaviors repeat.

Now, we have an apparent up-thrust completion.

There may be other equities in a similar (up-thrust) position as of this post … One such potential is Carmax (KMX).

Opinion:

Successful trading, is a game of attrition.

The LOW set-up, that looks to be complete (for a short position) has probably lost all market participant interest at this point.

The i-phone crowd, looking for the next fix, is not going to wait around and monitor for a month to see if price action follows a well tested set-up pattern.

After things get moving though … they’ll be back, as Dr. Elder states; ‘being both lazy, and late.’

Summary:

We’re not shorting LOW (not advice, not a recommendation) as there’re plenty of opportunities with leveraged inverse funds (again, not advice, not a recommendation).

The point of this update is to show, once again, the market, LOW in this case, has gone from ‘spring to up-thrust’; a repeating price action phenomena.

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.

Gold (GDX) Experiments

Before The Open

Looking At The 3-Day GDX, Chart

As Dr. Elder once said (paraphrasing): ‘There are many ways to make money in the markets … even more ways to lose it.’

The time required to master the basics like support, resistance, accumulation, distribution is up to the individual.

After that however, the experimentation starts: Fibonacci retrace, time sequences, technical forces, multiple time frames and on.

Experimenting with the chart of Senior Gold Miners GDX, shows at this time, a 3-Day chart reveals nuances not seen (so easily) in the daily or weekly.

We’re going to invert the chart to mimic the GDX inverse fund DUST (without the tracking errors) as shown below:

Then comes the mark-up:

All of a sudden, it becomes clear. Inverted GDX has been in a series of springs (up-thrust, non-inverted) and is now pivoting to the upside. That pivot is shown with the green arrows.

Each 3-Day period having a higher low than before.

As detailed in this prior update, GDX is potentially on the verge of ‘free fall’ (not advice, not a recommendation).

Pre-market trading has GDX, lower with DUST higher.

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.

Run fast … or, Not at all

3:48 p.m., EST

Biotech ‘Gut-Check’

One of Dr. Elder’s admonitions was: ‘Run fast or not at all’ when confronted with retracing price action.

The trade plan from months ago, concerning the biotech short (not advice not a recommendation), was that potential for collapse was so great, the trade was going to be maintained (and increased) until it either worked out for profit or the price action was so obvious that ‘now, was not the time’.

If there ever was a time in the past five-weeks for SPBIO bulls to take back control, this is it.

However, to prove they’ve got the upper hand, inverse fund LABD would have to make a new weekly low … at least.

That (low) has yet to happen.

The inverse LABD tape is a sea of red and purple; at the bid, below the bid, mass selling … having the look of capitulation by the bears.

It’s possible we’ll know more over the next few days.

At this juncture, LABD price action is testing a support-boundary area while also testing the right side weekly trend line.

Marked charts are below:

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.

Biotech Targets

12:34 p.m., EST

Upside Breakout Eroding

Potential Wyckoff Up-Thrust (reversal)

Measured Move Targets

Starting with the (unmarked) weekly chart of IBB below, we see the current upside breakout.

We’re going to invert the chart and label the ‘resistance’ as ‘support’.

Inverting charts is a technique discovered years ago in a long since forgotten trading text; possibly Dr. Elder’s

The ‘inverting exercise’ is to help eliminate chart bias.

For example: If you see bullish no matter which way you turn the chart … there’s a preconditioned bias that’s affecting decisions.

On to the inverted chart:

What we see above, is a typical Wyckoff spring set-up.

Price action has decisively penetrated support (resistance on the regular chart) and is now eroding.

The distance of the trading range is shown as the dashed line.

Look at the near perfect symmetry.

Putting the range bar at the top of the trading range gives a measured move … right into resistance (support) of the next range.

Price typically moves down, two or three times as fast, as it moves up.

That’s why the professional speculators (throughout trading history) prefer down markets. If there are profits, they show up a lot faster.

Fundamentals:

Enormous pressure continues to build against the sector. You have to wonder what’s it’s going to take for the big break.

Just out last night, was this report from ZeroHedge. The CDC is having an emergency meeting to discuss ‘heart inflammation’ problems with the injections.

Let’s start there with a ‘safe’ topic and not discuss things like ‘dead within 15-minutes’ of injection.

Or maybe this one: A bloke gets himself injected and nearly kills two people with his truck a few minutes later.

The date on the video is June 11th. People are still getting this thing even with so much adverse reaction (death) information available?

The two narrating have a good point. What happens when a pilot is on final approach in bad weather, when he suddenly goes into an ‘event’.

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

The usual suspects for the week.

No.1

During the 1918, Spanish Flu, only the speck injected died.

No. 2

Published numbers (if you can believe them) say 38%, of those in the U.S. have received speck injection.

It’s gets interesting when you crank the numbers for Russia.

Using population data from this source, only 3.7%, of them have received the same injection:

About 90%, less than U.S.

Guess who’s coming to dinner?

Meaning, guess who’s going to be in a better position from a military strength and health standpoint.

No. 3

Here’s a cheap, effective defensive tool. Looks bad but it works.

I had the former owner of Texas Tactical, tell me one time …

“Whatever the .45 hits, is coming off.”

Here’s a reminder of what the .45, can do: Time Stamp: 0:39.

Dead before you hit the ground.

No.4

“The best way to control the opposition is to lead it ourselves.” – Vladimir Lenin

No. 5

Legitimizing the lies

Just 17-seconds into this video and we have our answer whether this is news you can trust.

Useful idiots.

See No. 9, below for an update on what’s really going on.

No. 6

Working through comments on ZeroHedge, brings up this link, on mind control.

No. 7

Clouds on Mars. Really?

With atmosphere just 1% of Earth …. that’s one-percent; somehow we get clouds forming that have a strangely familiar ‘metallic sheen’ to them just like you see after a high level ‘spraying’ right here on Earth.

No. 8

“Virtue signaling little turds”

Time stamp 1:57, at this link lays it out.

The plus side; As we get closer to the fall (regular flu season) … just months away, everyone’s going to have a fantastic opportunity to find out what there’re really made of.

Bravery’s like a muscle. It needs to be exercised often.

Time to get the popcorn ready.

No. 9

‘Speck injection stakeholders are going to be disappointed with the success of the program’ (time stamp: 2:08).

Yes, indeed.

It’s possible the fundamental and technical conditions of the biotech sector are lining up.

As Dr. Elder said in his book years ago, when this type of alignment occurs, the resulting move can be extremely powerful.

We’ve just had a potential test and downside reversal of SPBIO at the 23.6%, level; an indication of severe weakness.

No. 10

Peer reviewed stupidity

This one’s a corollary to No. 8

In a way, it’s nice to see that mediocrity, stupidity and laziness may be set for a thorough house cleaning.

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.