For those who were there in 1987, and later in 2000, the market’s rise was relentless … until it wasn’t.
With the SOXX pushing through to new highs (all shorts closed), one gets the feeling, unless there’s a reversal soon, we’ve now entered a very dangerous stage a la 1987 (not advice, not a recommendation).
The bond market’s signaling that ‘something’s up’. The financials (XLF) have just topped and reversed. Banking (KRE) appears to be at some kind of top and on it goes.
Financial Sector XLF, Daily
If I was short this sector (FAZ-26-01), the stop would be today’s high (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.
For today’s session (as of 12:27 p.m., EST), all but one of the ten are trading lower.
Financial, XLF, Daily
When looking at the chart, the set-up is obvious (not advice, not a recommendation).
Similar to yesterday’s update with ProLogis, XLF, made two attempts to push past resistance … that so far have failed.
Today’s action has ‘ease of movement’ to the downside.
The sidebar notes and open (short) position in XLF, as FAZ-25-01 (not advice, not a recommendation).
Separately:
The short in IYR, via DRV, was closed early in this session as PLD, made a (very slight) new daily high, indicating possible hesitation to the downside (not advice, not a recommendation)..
It may still work out but the market that’s moving to the downside now, is XLF (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.
While the financial press (pictured at left) is fumbling around, trying to figure out if the market’s up or down, for this site it’s not about ‘up’ or ‘down’, but what the market itself is telling us.
Case in point, this past week.
Remember, at the beginning of the week, major brokers blew-up and locked up.
You couldn’t log-on whether long or short.
Surprising Speed
Posts on this site gave numerous clues (prior to last Monday), that we’re at risk of a downturn.
Two examples of potential downside were August 1st, Carvana’s ‘Interesting’ Numbers, posted here; the next day, Correction … or … Crash? posted here.
All released well before the Monday, August 5th, wipeout.
One thing to note as Ed Dowd points out (link here) is the speed of the downdraft.
Was this past Monday’s market action (and brokerage blow-ups) part of the new paradigm, the new normal?
With that, let’s take a look at what’s likely to happen (or set-up), next. The last post showed a potential short sale set-up (not advice, not a recommendation).
Finance Sector XLF, Daily
If price action continues higher, shown as the inserted back bar, the plan is to stand aside or exit, if short (not advice, not a recommendation).
Next, if we get downward action posting a new daily low, shown as the magenta bar, that’s a potential short entry (not advice, not a recommendation).
Of course, not shown is the scenario where the market does nothing and remains flat.
Based on last week’s hysteria and this additional update from Ed Dowd, link here, markets doing nothing seems to be the least likely outcome.
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.
Monday’s losses were (mostly) recovered by the close on Friday.
One might be inclined to think we can all get back to ‘normal’.
Normal, like rigged elections, poking the bear (expecting nothing bad to happen), attempted assassinations, fake data, falsifying employment records, more ‘visitors’ flooding in, you know, normal.
However, for anyone paying attention, the charts say we’re at The Danger Point® (not advice, not a recommendation).
The potential for biotech XBI, has been covered over the past few days (here and here), but we also have another potential set-up; the finance sector, XLF.
We’ll cut to the chase, with the chart.
Finacial Sector, XLF, Daily
It’s important to note: It was four days of retrace (upward) into the test; each day had less volume than the day prior.
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® 