The Plan

The image below may be the best descriptor of the (economic) plan going forward. Full (forced) compliance won’t be achieved until every vestige of small-business (Mom & Pop) is destroyed.

On the bright side, at least we know what’s coming.

The near instant, within hours fracking about face, could be used as the economic model; destroy everything and do it quickly.

Self employment (S-Corp of one) may or may not be the ultimate answer. One thing it might do, is offer more time for maneuvering. That’s critical when ‘speck’ injectors show up at large firms and force everyone into line.

With that in mind, two sectors have been the focus as opportunities for short positions.

Oil & Gas, XOP and real estate, IYR.

There are others like gold with GDX down again in the pre-market … thus confirming a bearish trend.

It could wind up that shorting GDX was the best option.

However, since there’s such rabid indoctrination into the hyper-inflation theme, it could be a bumpy road to the bottom … the exact worst thing for an inverse ETF.

Those trading vehicles prefer straight down action. Otherwise, they erode (value) quickly.

Analysis of the Oil & Gas sector was covered just recently, right along with identifying a reversal. XOP is down again in the pre-market with DUG up.

The short position in DUG is being maintained (not advice, not a recommendation) with chart analysis to come over the weekend.

Real estate, IYR shows a lower open as well.

Going short this one (via DRV) has been more time consuming. As IYR heads lower after an apparent false breakout (Wyckoff up-thrust), increasing the line (position size) is the objective; not advice, not a recommendation.

Depending on today’s price action, chart analysis on IYR and DRV will be forthcoming.

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.

Edge of The Lake

The late David Weis, instructed his students during a 2007, trader’s camp sponsored by Dr. Elder, that ‘trades are found at the edge of the lake’.

Most of the training session was recorded and reproduced on DVD. That video is still available, linked here and is a wealth of knowledge.

Within the video, Weis analyzes what he calls ‘The Apache Spring’.

No, it’s not a history lesson of Chato’s raids in New Mexico Territory during the spring of 1882; it’s an analysis of Apache Oil, ticker APA.

That analysis alone, should be enough to convince any rational person, price action has absolutely nothing to do with any fundamentals.

Wyckoff repeated this assessment in his autobiography; ‘prices have an energy of their own.’

Prices are manipulated. They always have been; but it’s not important to know who’s doing the manipulating.

What’s important, is to discern (within probability) the objective of the manipulation.

Which brings us to Oil & Gas, XOP.

We’re at the edge of the lake.

Up-volume is declining and momentum (MACD) has bearishly diverged. If there’s to be a sustained reversal, this location is high probability.

Price action in XOP, is attempting to close the reversal gap. This morning’s pre-market shows it might do that in today’s session.

We’re already short the sector via DUG (not advice, not a recommendation) and watching carefully for gap closure with subsequent continuation of the nascent reversal.

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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 Day After: XOP Reversal

Last Thursday, the day the XOP report was posted, it topped.

The day after, Friday, it reversed.

XOP opened gap-lower and inverse fund DUG opened gap-higher.

Sometimes, it’s that simple. Went short the the sector (not advice, not a recommendation) at DUG 21.5899

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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.

Removing The Risk: Oil & Gas

The dollar and bonds have reversed.

Yesterday, oil futures posted a downward reversal bar. This morning’s (pre-market) session is lower again by about 1.00%.

Longer term perspective (above), Oil & Gas Sector, XOP is at resistance.

Shorter term, the daily (below) posted a measured move off the wedge formation.

There’s not ever ‘no risk’ in the markets … but there is ‘low risk’.

That’s where we are now with XOP. Risk is low the up-trend will continue unabated.

To get past long-term resistance, (if it’s going to do so), XOP may have to come back and retrace for fuel.

With unemployment claims just out at 965,000 does anyone really think the economy’s going to bounce back?

Back in the day during a real (not contrived) recession, it was bad when unemployment claims hit around 385,000. Those were the days.

One of the Inverse funds for XOP that’s fairly liquid (not advice, not a recommendation) is DUG.

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.

Dollar Reversal

If the dollar (UUP) keeps going, its trend-line’s rising at a stiff 65%, annualized.

Sectors like Oil & Gas, which have essentially been a ‘dollar-short’ theme are at risk of significant reversal.

That’s in addition to anecdotal data from Van Metre’s updates, the oil patch is awash with inventory.

XOP is a good proxy for the long side and DUG for going short (not advice, not a recommendation).

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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.

Failed Moves

There’s nothing more dramatic and profitable than a failed move.

The controlling party, bulls or bears push the market in their direction; only to find out, there’re out of fuel.

The opposing side has been gathering forces to mount an offensive.

Perhaps the most famous ‘gathering of forces’ was the failure of Long Term Capital Management.

If memory serves correctly, it was Goldman Sachs that found out LTCM was over leveraged and overextended.

They used that data for their benefit.

That’s not to say the failed move in the Oil & Gas Exploration (XOP) market is anywhere near the LTCM level.  Just saying, markets are fractal and failed moves occur on all time frames.

The daily chart of XOP shows the failed attempt to break above resistance. 

Price action was swift in the early session; then stalled at mid-day and retreated quickly into the close.

That retreat brought price below resistance … indicating significant weakness.

The short position in biotech (via BIS) was profitable but it did not have the potential for swift action like shorting XOP.

Since the firm follows the tenets of Gerald M. Loeb (late Vice Chairman of E.F. Hutton), we do not diversify.

Trades are focused on specific price action; therefore, tend to be concentrated only in one or two markets at any time.

We know from a fundamental standpoint, there’s no (or very little) demand for oil and the by-products.  Steven Van Metre has contacts in the field that are feeding him information on what’s really going on.

While some of the minions that watch his updates complain about the colors of his moving averages, we’re more interested in the anecdotal data such as ‘oil inventories are piling up’.

Even better was the comment (a few weeks back) that EIA data is not telling the whole story.  There’s even more oil than what’s in the report.

That’s our backdrop for shorting the XOP by using DUG.  Not advice, not a recommendation.

Recall that DUG, with regards to the firm’s broker, has stated “not marginable” indicating especially high volatility.

Open positions are below:

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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.

Trade Actions, Early Session

A brief list of changes:

Exit as planned on DUST. Stop was hit

Trader’s discretionary exit on DUG:  Gain ~ 4.80%

Entered short IBB via LABD (3X inverse) and BIS (2X inverse). Not advice, not a recommendation.

The biotech sector has lost momentum. 

Weekly MACD has diverged and is now flat. Additional analysis to come.

Position table is shown below:

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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.

Dollar Reversal; Ready

The downward thrusts in the dollar have run their course. 

The weekly chart of UUP, shows successive narrowing of distance traveled to the downside.

The bears may have reached exhaustion at the same time MACD shows a bullish divergence.

Couple that with extreme shorting from the speculators; the trap is set, ready to close.

From a technical perspective, note last week’s price action was inside and at the top of the price range from the week prior. 

Looking at the week before that, we see price action was inside but at the bottom of the range of the week prior.

These are subtle clues; there’s a change in character.

As mentioned in previous updates, it’s all happening during holiday weeks when everyone (almost everyone) is distracted.

No matter what happens on the political side, it’s likely to be chaos.  February, is setting up to be very different from now.

We’re using Livermore’s strategic approach to the markets.  That is, figure out what’s going to happen in a big way … then get in position.

Built into that approach is recognition there will be market outages, trading halts, communication interruptions and natural disasters.

The one thing that may separate this site from others, these (potential) events are taken into account.

Seismic activity is picking up in a big way right along with volcanic eruptions.  A major eruption that will block the sun and kill-off global harvests or planting, may be in the works

The “Christmas Bomb” cut communication lines … which by the way is the very first objective during any battle; cut the enemy’s communications.

Matter of fact; that could be the ‘reason’. A test to see how badly communications were disrupted; how quickly they recovered.

Continuing on with potential disruptive events; There were broker outages on November 9th, when the market opened sharply higher. 

If it happens on the way up, it will happen on the way down.

Cyber attack has already been stated as the next gala event the elite have planned. 

There’s not one market analysis site known to this firm addressing those potentials or any others. 

In that sense, The Danger Point, is unique.

Obviously, there are no guarantees.  Anything can happen.  If one wants to day-trade, go ahead but we’re not interested.

When or if all this (or a variant of it) happens simultaneously, the general pubic is going to be stunned.

It’s possible they will see their investment accounts wiped out in a matter of weeks.

The positions remain unchanged and listed below.  The look is different as it’s taken from the firm’s own trade spreadsheet. Absolutely not advice and not a recommendation.

Note the initial stop followed by the current stop.

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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.

Danger Point Short, GDX (DUST)

As expected, this morning’s GDX action is testing yesterday’s wide price bars (shown on hourly chart).

The daily chart of inverse fund DUST is below:

The last report was posted a few hours before close. Afterward, GDX pushed slightly lower towards the bottom range of support.

That push lower in turn, lowered the retrace targets accordingly.

This morning’s upward GDX spike was a gift (as of 10:51 a.m EST) and a signal to go short via DUST (not advice, not a recommendation).

It’s important to note that all of this action is taking place during Christmas week; no one is looking.

The firm went short GDX at DUST:  20.09, early in the session.  Hard stop for DUST @ 19.69; not advice, not a recommendation.

Price action pushed slightly lower (to DUST 19.91, so far), before reversing.

This is the danger point. If the hyper-inflationists are right, it won’t take much of a move in GDX, to find out.

If we are in a deflation scenario, expectations are for today’s test levels to hold and for GDX to continue lower (DUST higher).

Separately, XOP is testing and filling the gap left from Monday’s open. 

If XOP reverses from here, the DUG stop could be moved up to today’s low (thus far) at DUG:  27.75.

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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.