Category Archives: Dr. Elder

Neural Plasticity … Be Flexible

June 26, 2024 By in $SPSIBI, Biotech, Dr. Elder, LABD, LABD-24-13, SPBIO, Uneducated Economist, Wyckoff, XBI, ZeroHedge

Reviewing The Plan

From the outset, the premise for biotech XBI, was this:

We’re in a huge up-thrust, several years in the making (not advice, not a recommendation).

With a set-up that big, downside potential was projected to be just as big, link here.

Then came the hard part, validating the premise and getting into position.

Nural Plasticity

So, it’s been on again, off again; a total of seven short trades; LABD-24-06 – LABD-24-12, with an eighth, LABD-24-13 opened, as of today.

The entire (closed) series has been profitable.

However, during that time, assessment of (major) downside potential shifted from confidence to caution, and now back to confidence.

‘Sticking to one’s guns’, no matter what the market (the tape) is saying, is a sign of real trouble.

The market itself directed the entering/exiting.

With that, let’s move on.

The ‘New’ Paradigm

Reviewing the host of ‘experts’ in the press and YouTube alike, (except for UE), everybody has their reason on why nothing (bad) will happen until after the ‘election’.

The last go-round should have broken that paradigm completely; but no, we’re still hanging on.

The ‘new’ paradigm is probably, ‘no’ paradigm. 🙂

From a Wyckoff perspective, the financial press is to be ignored except for when data releases are scheduled.

What’s in the release is not important; it’s the time and date itself, warning of potential volatility.

Biotech XBI, Daily (inverted)

Once again, inverting the chart to show the short-side (LABD) potential (not advice, not a recommendation).

Note: The dashed blue lines, an extension of the support level shows we’re also in a potential spring set-up at one higher timeframe, the weekly; more background, link here.

Positioning

As noted above, a new short position was opened via LABD, during this session (not advice, not a recommendation).

Typically, discussion of open trades within the trading community is (or should be) taboo. As Elder said years ago, there’s the real risk of ‘ego’ causing errors in discernment.

With that said, I might exit this trade at any time, without notice, without explanation.

Veteran traders will agree with that statement; when something’s ‘off’ with a trade (only known to them), it’s time to get out.

Nonetheless, a hard stop for today’s position would be yesterday’s LABD, low of 6.97 (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

Biotech ‘Put’ … +160%, Overnight

June 9, 2024 By in $SPSIBI, Biotech, Dr. Elder, Heresy Financial, SPBIO, XBI, XBI-OPT-24-01 2 Comments

Details On The Trade

Options: A whole other level of risk/reward.

Buying an option, you have a ‘right’.

Selling (to open), you have an ‘obligation’.

There are plenty of horror stories selling options. A typical example, is this one.

However, when buying options (to open), as Dr. Elder has said, you have to jump through ‘three hoops at once‘; get it right on the stock, direction, and time.

He goes on to say, working the options market is counter intuitive. Traders naturally gravitate to long-dated, in-the-money options so the trade has time ‘work out’.

His method’s the opposite; short-dated, out-of-the-money.

So, what exactly does that look like?

The XBI, Short-Dated, Put

The situation on biotech, its reversal, first covered here, is a well-known topic on this site.

Using that information, especially this update and this one, probabilities were high for downside the next session.

With that, we have the following.

Biotech XBI, 1-minute

Time stamp on the entry from the broker states: 15:35:10, shown on the chart.

Time stamp on the exit is: 09:31:43, also shown.

Note: Entry was executed as the price of XBI was rising (for nine-minutes), with option value declining.

That rise does not look like much but we’re one day before expiration; option value is fluctuating significantly.

Perfection vs. Effectiveness

After the entry, we see later, there’s a 1-minute ‘blip’ higher before that blip was reversed.

Waiting for entry could have been better from a lower price standpoint.

That blip could have easily gone the other way, option value rising rapidly, low-risk (entry) opportunity gone.

Looking at the chart, one could say that ‘it’s not perfect’ and that’s true.

However, for being in the market just 29-trading minutes, gain of +160%, one could say, it was highly effective.

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

Silver Top … Part VI

June 1, 2024 By in Dr. Elder, Ed Dowd, Gold & Silver, NVDA, Semiconductors, SLV, SOXS, SOXS-24-07, SOXX

Top Or Channel?

The market itself, tells us where to look.

The past five ‘Silver Top’ updates have looked at recent action, as a potential top and downside reversal.

The ‘Part V’, update (link here), included a ‘measured move’ target.

In the markets, an infinite number of events can be true simultaneously. Dr. Elder covers this in his book, with individual traders working multiple timeframes.

All of which brings us to the chart below.

Silver SLV, Monthly

From previous updates, we’re hovering around the support resistance zone.

Now, we can see price action’s also hitting the top of a trading channel.

The question of course is, what’s the next likely outcome?

Even without considering what else is going on in other markets, a pause, sideways congestion, or downward testing seems to be the highest probability (not advice, not a recommendation).

Did The ‘Bubble’ Just Pop?

When we do take other events into account, wide swings in the SOXX on Friday, Nvidia posting a narrow range weekly bar, a potential top indicator, Ed Dowd said, when this all implodes, there’ll be margin calls aplenty.

The technical situation of the SOXX, is planned for tomorrow’s update.

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

Newmont’s Decision … Down

May 25, 2024 By in Dr. Elder, GDX, GDXJ, Gold & Silver, Gold Miners, NEM, Speck-Effect, The Speck

Now, It Gets Interesting

Is it about to become a dumpster fire?

As usual, we have the rabid gold and silver bulls, breathless; ‘This is it!’, ‘This is the big one!’, ‘Dollar collapse, imminent!’

All the while, nobody’s reporting the fact, that ever since ‘The Speck’ was introduced in 2019, and of course, Speck ‘protection‘, gold production has dropped to 2014 levels, and has not recovered (source, Statista).

Is it as simple as ‘supply and demand’? Is the ‘inflation’ narrative, just another ruse?

Even as gold and silver are rising (for now), the mining sector’s GDX, GDXJ, are far below their all-time highs.

As if to put icing on the cake, Newmont, appears to have reversed (not advice, not a recommendation).

Newmont Mining NEM, Daily (inverted)

Similar to recent biotech analysis, we’re inverting the chart to show the potential.

Note: This ‘inversion’ technique is a psychological exercise covered in one of Dr. Elder’s books (here and here).

It’s a basic fundamental for un-biased analysis.

Back in the day, while publishing on SeekingAlpha (a whole story in itself), users of that site would complain about charts being ‘upside down’. 🙂

Moving on, we have the following:

There’s a lot going on in this chart.

Price action has recoiled off the support (resistance non-inverted) and is now at a point where it may attempt to retrace for a test.

MACD has become successively bullish; now has a crossover signal.

As shown in prior updates here and here, the support level’s in the vicinity of the 23.6%, retrace.

That indicates bullishness on the chart above or weakness on non-inverted (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

Stretched … Squeeze … Over?

April 23, 2024 By in $SPSIBI, Biotech, Dr. Elder, LABD, SPBIO, XBI

Do We Have A Channel?

How do you know if it’s a countertrend move, or an outright reversal?

Do you stay with the trade or, as Dr. Elder said, ‘do you just take the money and run?’

For biotech XBI, it’s been a nasty two days of upside for any short positions, but the real question is, are we there yet?

Looking at the charts below, you’ll have to decide for yourself.

However, from my perspective, it’s possible that ‘today is the day’; meaning, we may be at the top of the correction (not advice, not a recommendation).

Biotech XBI, Daily

The chart is self-explanatory.

From the day a ‘change of character’ was identified to last Friday’s low, is a Fibonacci 21 days.

From that low to today, is a Fibonacci 3 Days.

We’ll compress the chart scale for a bigger picture view of the current action.

Also included is the grey centerline, showing the channel has a symmetrical ‘look’.

Also note, we’re at a 23.6%, retrace at the day’s high (thus far) and price action appears to be eroding downward.

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

After The Close … Biotech

April 16, 2024 By in $SPSIBI, Biotech, Dr. Elder, LABD, SPBIO, Wyckoff, XBI 1 Comment

Penetrates Support & Stops

The pre-market update had biotech XBI, at its Fibonacci projected move, ready to continue lower.

Indeed, there was a gap-lower open and price action attempted to move lower (below support), but then it stopped, closing the day with a narrow bar.

Anyone who’s a student of Wyckoff, would immediately recognize that description; we’re in spring position.

So, is XBI going to launch higher?

Well, anything can happen.

However, maybe a better description of potential, is that XBI, is in position to attempt to move higher.

Biotech XBI, Daily

Note: Elder’s Force Index for the past two trading days has lost downside energy (middle indicator panel).

This gives some probability of an attempted upside move (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

Biotech Breakdown … Is This It?

April 16, 2024 By in $SPSIBI, Dr. Elder, Ed Dowd, Greg Hunter, LABD, SPBIO, UNG, USO, XBI, ZeroHedge 1 Comment

‘Respecting’ Fibonacci … So Far

Before we get started, biotech may have decisively turned the corner to the downside with this, just out … maybe.

‘Zero Respect For Thieves’

Before we get started, with getting started, a brief mention on thievery.

Years ago, Dr. Elder stated he had ‘zero respect for thieves’; those who had stolen his book tile, ‘Trading For A Living’, in various forms.

When you have limited skills and even less insight, thievery is the only way to go … that is, until you’re found-out.

Turns out, the analysis of silver SLV, posted on this site (here and here) nearly two weeks ago, specifically the presence of SLV volume ‘spikes’ at inflection points, may have been ‘lifted’ without citation by a prominent YouTuber (who will not be named … yet).

It may have been just a coincidence. If so, all is well. However, a ‘second time’, not so much. So, let’s all play ‘nice’ shall we? 🙂

Now, on to biotech.

Biotech, XBI, Daily

This update is being released just before the open. It looks like XBI, is about gap-lower.

We see in the chart, XBI, is respecting the Fibonacci projections.

As with the recent oil market analysis and USO, (here and here) we let the market decide what areas are important.

In the case of XBI, and unless significant demand comes in, lower prices appear to be the most probable direction (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

Back In The Saddle … Biotech

October 11, 2023 By in $SPSIBI, Biotech, Dr. Elder, LABD, LABD-23-10, LABD-23-11, Positions, SPBIO 3 Comments

The ‘Perfection’ Mind-Trap

‘Once stopped out, the amateur will never re-enter the trade.’

That’s Dr. Alexander Elder, stating a typical psychological barrier for the new trader.

As if by design, as soon as the short trade LABD-23-10, was named, it was stopped out early this session.

About thirty minutes after the open, price action reversed its early session direction and re-confirmed the original bearish assessment of the sector.

Naming The Trade

From a personal standpoint, the psychological barrier of never getting back in a trade once stopped out, was addressed years ago.

It’s frustrating, but what’s worse, is watching one’s original premise turn into a ten-bagger and not being along for the ride.

With that said, the short in biotech has been re-established via LABD, at a far-from-perfect entry of 21.69, and a not-so good stop of 20.54 (not advice, not a recommendation)

We’ll name this one at the outset as LABD-23-11

Charts to follow.

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

If Real Estate Goes …

August 30, 2023 By in Dr. Elder, DRV, Federal Reserve, IYR, Positions, Real Estate, SRS

Then, Everything Goes

‘Professionals don’t look for the challenge, they look for the money’, Dr. Alexander Elder

Right now, the ‘challenge’ is AI; bull or bear, who’s right?

We even have a bearish article out on SeekingAlpha. That means, the sector will probability go higher from here. 🙂

I wrote for SeekingAlpha years ago; had tens-of-thousands of views on my work; was somehow, never paid a dime.

The editors eventually told me, identifying potential market turns to-the-day, was “not suitable” (that’s a real quote) for their readers … so, there’s that.

Follow The (Nat-Gas) Money

Meanwhile, a potential significant reversal was identified in Nat-Gas, link here. So far, it’s progressing under the radar.

Entries have been made in UNG, at 6.64, 6.75, 6.86, 6.89, with a hard stop moved up to UNG 6.71 (not advice, not a recommendation).

Next, we have a potential reversal in Real Estate.

Real Estate IYR, Daily

Price action’s now at Fibonacci Day 8, from the low on August 21st. In addition, it’s at the 50%, retrace level from the high on July 27, to the aforementioned low.

We’re in a high, potentially, soon to be much higher, interest rate environment.

The (Interest Rate) Black Swan

The general public and investing professionals alike, think as the economy tanks, the Fed will lower rates.

It’s a widely and strongly held belief. After all, it’s always worked that way.

What if it doesn’t happen this time.

The economy tanks and rates move even higher?

it’s a possibility to consider.

Positioning

As one might guess, I’m already short this sector via DRV (not advice, not a recommendation).

Entries were made yesterday and today at DRV 48.42, and 47.66 respectively.

Hard Stop, is at the session low of DRV 47.00 (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