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.
Those monitoring this site are witnessing the search (for the short entry) in real time.
As said in the prior update, just because Fibonacci lines up, both in time and distance, does not guarantee anything.
From a Wyckoff perspective, as a result of Wednesday’s XBI price action penetrating the prior days’ low, and then stopping dead, there was a probability of a (minor) spring … which we got the very next day.
By the way, that upward move (yesterday) carried the XBI, near another Fibonacci retrace level: 61.8%.
As a result, the LABD-24-17, was exited with about a 3.6% loss (not advice, not a recommendation).
Now, on to the action at hand.
Real Estate IYR, Daily
Depending how price action progresses, we’ll go into more detail on the technical condition.
Today printed a new daily low and we have an MACD (bearish) crossover still in effect.
Trade action was to go short via DRV with a representative stop (for DRV) one tick above the IYR high: 95.96 (not advice, not a recommendation).
Admittedly, it’s a tight stop and that’s the point.
If IYR turns and starts to exhibit buoyancy, we don’t want to hang around.
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.
Every day, the tape prints one more clue to the next probable direction.
The next probable direction.
Part of an experienced speculator’s pre-market prep is to know from the prior session, the ‘correct’ answer for the current session.
That is, if a set-up has materialized, then subsequent price action will have a specific or variation of a specific pattern.
If the pattern posts on the tape, we have the ‘right’ answer. If not, probabilities are saying ‘no’ at this point.
Of course, the hard part and according to Wyckoff, it laterally takes many years of observing and working with price action to know what to expect.
Real Estate, ‘Wrong’
This morning’s session in real estate, IYR did not post the ‘right’ answer from a short standpoint. A lower open and lower print was the expectation.
Therefore, DRV-24-02, was exited with just over a 2%, loss (not advice, not a recommendation).
However, oil and gas XOP, gave the ‘right’ answer.
Oil & Gas XOP, Daily
The circled price action is what we’re looking for (not advice, not a recommendation).
There’s a lot going on with this chart.
If XOP continues lower and short, DRIP-24-01, is not stopped out or exited, we’ll re-visit this action with further updates (not advice, not a recommendation).
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 herexop
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.
‘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).
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.
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.
Of all the major indices for today’s (Wednesday) session, biotech’s SPBIO, Leveraged Inverse Fund LABD, had one of, if not the largest gain @ +10.48%.
The last update identified two sectors to watch for short positioning: Real Estate IYR, and Biotech SPBIO; Short positioning via leveraged inverse funds DRV, and LABD, respectively (not advice, not a recommendation).
Since that post, DRV is up + 1.74%, and LABD is up + 8.58%, both measured on a close basis.
The ‘Big Reveal’
Remember: When price action turns south, that’s when the bad news comes out.
If this is the big reversal and biotech is the downside leader, unfortunately, that could mean a planned ‘reveal’ by the mainstream media.
Anyone going to alternative sites such as BitChute, ZeroHedge, Rumble, know full well what’s happening.
Maybe we’ll have another distraction like the 100-th (at last estimate) food processing plant fire or even something totally retro, like a balloon flying across … oh, wait. 🙂
Biotech SPBIO, Leveraged Inverse LABD
We’ll get straight to the point as prior updates have built a substantial case for a long term, significant reversal.
Recall, LABD is the leveraged inverse of SPBIO. The daily chart shows the current set-up.
This site does not provide investment advice.
With that said, one could infer from this prior post (at the bottom), a position in LABD had already been established and included a hard-stop.
That was indeed the case.
Next Steps
There’s no guarantee on how far or how long a directional move will go.
However, for SPBIO, one can observe since the February 2021, reversal from all-time highs, a sustained, directional move typically lasts 4 – 6 weeks.
The next update will show the best chart timeframe (multiple days) that resulted in capturing the majority of the directional moves since the February 2021-high.
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.
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.
According to this link, it’s not only higher taxes, but retirement accounts being hi-jacked through rule changes.
‘The bulk of the wealth of the American people.’
Not to be outdone, the IRS will increase penalties for under and overpayment of taxes as reported by Fox Business via Jerimiah Babe (time stamp 22:16).
At least it’s nice to know, implementation of the ‘$600’ rule will be saved until next year. 🙂
So, we have the context for the year 2023; i.e., wealth destruction, asset confiscation, fines and fees.
It’s a straightforward plan on ‘their’ part.
What’s also straightforward as reported by Babe, a large number of Americans don’t even know what’s going on let alone be willing to take action.
Then, The Elephant
Let’s not forget the ‘elephant’ that’s likely to be the biggest driver for 2023.
We see that elephant every day now and sometimes multiple times a day. It’s starting to reach the fringes of the mainstream with articles like this one.
Scroll down to The List … It’s No. 2
That elephant and its subsequent lack of demand (less population, fewer buyers) as a result, will likely affect real estate in a big way … for decades to come (not advice, not a recommendation).
The last update showed the weekly trading channels in IYR. The next chart goes further out to the monthly and identifies a Fibonacci sequence.
Real Estate IYR, Monthly
So far, we’ve had IYR on the daily (link here), the weekly (link here), and now the monthly, below.
Major inflection points on the monthly have occurred at Fibonacci timeframes.
Original Forecast, October
The analysis of the current set-up started way back in late October. Using a weekly chart, a potential Fibonacci sequence was identified that ultimately proved correct.
Real estate IYR, had its print high during Fibonacci Week 8, as shown below in the original forecast.
The next chart shows where we are now, again on the weekly timeframe.
Real Estate IYR, Weekly
Original Analysis & Forecast
The updated chart shows the subsequent price action.
Real estate IYR, has pivoted lower and posted tight price action over the past two weeks. Tight action typically precedes a breakout or directional move.
Summary
Anything can happen in the markets.
Even though a good analysis has been presented to indicate further downside for IYR, this Tuesday’s action will let us know for sure.
Typical vehicles to go short the sector are leveraged inverse funds DRV (-3X) and SRS (-2X) or to short the IYR directly (not advice, not a recommendation).
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.
Pick up almost any trading book like Reminiscences of a Stock Operator, and you’ll find, the big money was made on the downside.
In Livermore’s case from ‘Reminiscences’, he saw a big crash coming, went short in a big way, and was then squeezed out of his positions during market rallies in 1906.
The short trades were too early; he blew up his account.
Undaunted, he took drastic measures to raise capital (hawked his car), got back in, shorted, and cleared over $1-milllion in profits near the bottom on October 24th, 1907.
The Ukraine War & The Boer War
As spectacular as his profits were, for us that might not be the most important part.
Take a look at the list below, paraphrased from Livermore’s account of The Boer War and overall economic conditions; see if it doesn’t match up to today.
The British were just coming off the Boer war, having spent hundreds of billions (in today’s Pound-Sterling), and money was tight.
There was significant wealth destruction world-wide.
The San Fransico earthquake of 1906, was causing economic disruption and the need for even more cash.
Note: As reported here, seismic activity is picking up. We’ve just had a major quake (again) in California.
There were plenty of warnings of an impending collapse but as Livermore puts it, the masses paid no heed as they were more concerned with baseball.
Fabrication & Fact
There’s some scuttlebutt, The Panic of 1907, was a fabricated event, used to usher in fractional reserve banking.
Is this all starting to sound familiar?
Now, we have the potential of Neo Feudalism, going right along with Universal Basic Income and Digital Currency.
That should be enough intro to get us to the chart at hand, Real Estate IYR, but first, this just out, on MarketWatch:
Worst Year, Since 2008.
It’s already the worst since 2008, and as Jerimiah Babe puts it, ‘we haven’t even got started’.
Reference time stamp 12:07, in the link and see if it does not match exactly with Livermore’s observations.
All of which brings us to real estate.
Real Estate IYR Weekly, Close
The chart shows the most conservative (modestly declining) trading channel
The next chart, is where it gets scary.
The second (potential) channel is declining at approximately -62%, on an annualized basis.
Weekly timeframes are presented here on purpose.
Doing so, gets us away from the everyday, every blip, analysis and looks at things strategically. It’s obvious, barring some kind of intervention, real estate’s in trouble.
The January of No Effect
It’s well known, stocks tend to rise in the first weeks of January. Tax loss selling is over and there’s typically some type of ‘relief’.
Don’t count on it this time (not advice, not a recommendation).
Even as this post is being created, IYR, is pivoting lower and possibly confirming the more aggressive right-side trendline (second chart, above).
Summary
We’ll end with more paraphrase from Livermore’s account of the panic.
He describes being in Ed Harding’s office (his broker), telling him that ‘now is the time’, ‘today is the day’. All the while, stocks were drifting, everything was quiet.
Livermore said to Harding:
‘The longer that stocks delayed, the bigger the break will be when it comes.’
Let’s see if that applies to us, exactly 100-years later (Reminiscences, published in 1923).
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® 