Category Archives: Federal Reserve

‘Adverse Moves’ … Action Plan

June 12, 2024 By in $SPSIBI, Biotech, Federal Reserve, Interest Rates, LABD, LABD-24-12, SOXS, SOXX, SPBIO, Uneducated Economist

What To Do When ‘Whacked’

The day started out with a bang; market’s up sharply on CPI print.

One could think, months of biotech (short) analysis, has been blown apart with this morning’s sharp move (not advice, not a recommendation).

Remember, this update said watch out for ‘French’ guys:

“However, just like the video snippet in the link above, what looks to be a dramatic conclusion to weeks if not months of work, could be completely derailed by a bunch of ‘French’ guys hanging out in a British castle.” 

Well, here they are. 🙂

From a trading, positioning perspective, is it really that bad, what’s going on?

For that answer, we’re going straight to the hourly chart of 3X Inverse Leveraged Fund LABD.

Biotech 3X Leveraged Inverse LABD, Hourly

Early morning price action penetrated the stop level given in this update.

However, as can be seen, price action behavior of LABD was different than (inverse fund) SOXS, under similar conditions; it did not keep going lower but stopped dead.

It’s clear, action at this point, is pulling away from the lows.

Rate Cuts Not

Way back in January of 2023, this site proposed the ‘rate cut’ discussion was nothing more than a ruse; keeping everybody (the press, especially) busy acting like Pavlov’s Dogs, while the big rug-pull was being set-up.

With that in mind, here’s the real story of what’s going on (not advice, not a recommendation).

Positioning

In a little bit of a market ‘cheat’, LABD is currently trading above the prior stop level.

At the risk of making a gross trading error, the short position in biotech (via LABD) is being maintained (not advice, definitely not a recommendation).

However, even as this post is being created (3:15 p.m., EST), biotech XBI continues to erode back into the trading range with LABD, continuing to rise.

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

The Nvidia (Split) Top

June 8, 2024 By in 1987, 1998, 2000 - 2001, 2007 - 2008, Artificial Intelligence, Federal Reserve, NVDA, SOXX 3 Comments

Top of The Tops?

Here … ‘Hold this bag’.

Having been through the crash of ’87, ’98, ’01, ’08, and now, the feeling is similar.

Each time the vehicle (stock) is different but also the same, at the same time.

In case anyone wants to review, here’s the definition of ‘bag holder‘.

Is Now, The Time?

Previous analysis and potential top identification for NVDA, has been premature.

With that in mind, presented below are two charts.

One has the Fibonacci count from the October ’22 lows; the other, shows a trading channel overlay.

The inference is, we’re close to some kind of ‘event’ whether it be sideways congestion or reversal (not advice, not a recommendation).

Nvidia NVDA, Weekly

It appears, since the October ’22 lows, NVDA is being influenced by a Fibonacci sequence.

The ”close’ chart has the same Fibonacci count as well as the current trading channel.

Next week is ‘Week 88’, stock-split (10 to 1), as well as the Fed meeting.

Week 88, is within the margin of error for a precise Fibonacci count, Week 89.

With NVDA, at the top of its trading range, one needs to be on the lookout for some type of Fed/Stock-Split ‘overshoot’ or other indicator of potential upside limit (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

SOXX Action … Tight & Tighter

May 13, 2024 By in Federal Reserve, Semiconductors, SOXS, SOXX


Was Today, The ‘Tightest’?

The last update on the SOXX (using inverse SOXS), said we closed out the day, last Friday, with five-hourly bars of tight price action.

Tight action implies a directional, breakout move of some sort; expecting downward, for the SOXX (not advice, not a recommendation).

It didn’t happen.

What we got instead, shown below, is price action that’s even tighter.

Since the last update used the 3X Leveraged Inverse Fund SOXS, we’ll continue with that, but move to a 30-minute timeframe.

Semiconductors 3X Leveraged Inverse SOXS, 30-minute

The boxes outline price action that has become increasingly more and more constricted.

Obviously, something’s about to happen … but what?

Data Release

Tomorrow’s the release of PPI data along with a couple of Fed speeches.

Not that the ‘data’ really matters. Anyone with two basis points rubbing together should already know about accuracy of ‘the data’.

Even so, it can be used as an excuse for market manipulation.

So, let’s see what happens next.

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

Miners … Struggle At The Top

May 1, 2024 By in DUST, Federal Reserve, GDX, GDXJ, Gold & Silver, Gold Miners, Interest Rates, JDST, Wyckoff 1 Comment

Looking Behind The Curtain

Did rates get lowered? … No? … Not Yet?

Well, maybe next time.

Good thing we’re not wasting time, talking about the circus rolling into town every two months or so.

It’s hard enough ignoring the ‘experts’ to remain focused on price action and the truth.

This update will be brief, self-explanatory.

Junior Miners, GDXJ, Weekly Close

Gold is near all-time highs but Silver along with Platinum and Palladium are far below their respective highs.

This is not what you would expect to see in a hyper-inflation scenario.

The Juniors have been struggling at the axis line, now resistance line, for several weeks.

Today’s non-event, may be the catalyst, taking the punch bowl away from the six-week rally (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 … Beat Up & Down

April 10, 2024 By in $SPSIBI, Biotech, Federal Reserve, Interest Rates, LABD, SPBIO, XBI, ZeroHedge

Fibonacci Day 13

Biotech’s been beat up and down so much, you can lose track of what’s really happening.

Include the financial media side-show, and it’s a recipe for confusion and delay.

In the case of biotech XBI, it had a ‘change of character’ on March 21st, then morphed into a trading channel.

Now, it looks like it has a Fibonacci time correlation.

It all sounds complicated, so let’s take a look.

Biotech XBI, Daily

The original change of character, identified in this post.

Yesterday, Tuesday, was Fibonacci Day 13, from the point where the ‘change’ was noted.

It appears, the market used Tuesday, to post the right side (supply side) of the current trading channel.

Of course, there have been no ‘confirming’ hits on that right side so far; we just have one data point.

As the action unfolds, the key is to look for the market to adhere to the channel or tell us that something else is happening (not advice, not a recommendation).

Sorry, No Rate Cuts

That’s news to some.

On this site, it’s been a working premise for over a year.

Remember, back then, it was called ‘The Pivot’:

“Like ‘bread and circuses’, the ‘pivot’ discussion is a distraction … keeping the proletariat placated.”

Now, the man behind the curtain has been exposed, here and here, it may get very dangerous … as if it’s not already.

This post is being released (12:52 p.m., EST) before the Fed minutes. No telling what kind of volatility may, or may not, ensue from there.

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

Bad News For Biotech

April 5, 2024 By in $SPSIBI, Federal Reserve, Interest Rates, LABD, SPBIO, XBI 1 Comment

Good News, If You’re Short

Yesterday, biotech (XBI) had the chance to reverse off Wednesday’s lows, continue higher into an upside move, a Wyckoff spring.

It didn’t happen.

The move failed spectacularly.

The ‘Street’ pays attention to such failed moves. Thus far, unless there’s some kind of massive demand, biotech XBI, has penetrated and tested support, now resistance, and is moving lower.

Strategy First

Recall, the work was done (three weeks ago) indicating high probability of a long-term reversal in this sector.

Adding some entertainment with the Fed is, or the Fed isn’t (going to cut rates). How about the Fed never was. 🙂

Until proven otherwise, we’re in a high, and higher, interest rate environment.

Biotech XBI, 4-Hour

Moving closer-in on the chart, the 4-Hour.

As we can see, on March 21st, XBI had a change of character.

Price action was relatively ordered and well behaved but then became more volatile on the 21st; it all fell apart, declining sharply on April 2nd.

At the point where the ‘change’ is noted, it also looks like XBI, began to form its (current) trading channel.

P&F Projection

If XBI, continues its decline, where’s it going?

What’s a likely target?

There are several methods that can be used; Fibonacci projection, measured move, and P&F to name a few.

A basic P&F projection is shown below:

What’s shown is the maximum projection range (not advice, not a recommendation).

As this post is being created (11:52 a.m., EST), XBI continues to grind its way higher in what’s likely a move to test resistance in the 90.50 – 90.60, area.

For the breakdown to be negated, we would need to see a decisive upside penetration of the right-side channel line.

It’s close but so far, price action is within ‘normal’ correction boundaries.

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

Fed Leader … or … Fed Follower

March 24, 2024 By in Bonds, CVNA, David Weis, Federal Reserve, Interest Rates, IYR, KMX, Prechter, Uneducated Economist, Wyckoff

Which Is It?

Right along with the current narrative, ‘The Fed’s going to cut rates’, is another narrative, ‘The Fed’s in charge, a leader, and sets rates’.

Is either one, actually true?

Years ago, Robert Prechter Jr. pointed out very convincingly, the Fed’s a follower, not a leader.

His research showed, over many years, the Fed consistently follows the market.

Along with that, was his premise, ‘The market leads the news, not the other way around’.

Using that, we’ll look at what the Fed’s likely to do next; let’s use the long-term view, the 10-Year Treasury.

What’s it telling us?

Macrotrends Historical Chart: Ten Year Treasury

As posted in the prior update, the 40-yr bond bull market, i.e., lower rates, is over (not advice, not a recommendation).

We see the upside reversal in rates (downside for bonds) took over 10-years to set up.

Rates pushed below established support into a Wyckoff spring condition, then reversed higher, then into an outright breakout.

Currently, we’re hovering around in ‘no-man’s land’.

Could rates dip lower (bonds higher) and we get a token rate cut in response from the Fed?

Well, as David Weis used to say, ‘Anything can happen’.

Strategy First

However, from a strategic standpoint and for the long-term, higher rates are more probable.

The market has already responded with interest rate sensitive sectors and stocks (IYR, KMX, CVNA, etc.), having peaked long ago, in 2021.

A Dangerous Game

Depending on one’s perspective, what’s going on here with interest rates, is a dangerous game of ‘chicken’.

As Uneducated Economist puts it, the Fed’s a ‘credible threat’; all they have to do is ‘talk’ and propose (i.e., threaten) to move rates and the market responds without the Fed actually doing anything.

It’s working, for now.

The Emperor Has No Clothes

The problem is, as Prechter has already shown with research done years ago, ‘the emperor has no clothes’.

The Fed does not control rates at all; it’s a follower, only doing what the bond market’s telling it to do.

For some reading this, it’s old news.

For others, it’s a shock to find out, yet another institution is not what you thought it was.

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

There Are No ‘Rate Cuts’

March 22, 2024 By in $SPSIBI, Appalachia's Homestead, Biotech, Dr. John Campbell, Ed Dowd, Federal Reserve, Greg Hunter, Interest Rates, LABD, Michael Bordenaro, SPBIO, Speck-Effect, The Speck, Uneducated Economist, Wyckoff, XBI 2 Comments

‘There Is No Spoon’

We’re in the surreal; like The Matrix.

YouTube content creators have noticed the public’s inability, refusal, and denial to recognize (or accept) the truth:

Michael Bordenaro; ‘everybody’s so weak, so sensitive, they can’t handle the facts.’

Patera, Appalachia’s Homestead; discussing her lineage (Cherokee) and history, seeing the similarities of today, applying the lessons; some are more concerned about her hair and makeup.

Then, Uneducated Economist; ‘no amount of wishing is going to bring events back to the way it was. It’s effectively a new construct.’

Interest Rate Ruse

The 40-year bull market in bonds is over; rates are not going lower, they’re going higher (not advice, not a recommendation).

Ignoring or refusing to recognize this (highly probable) truth when analyzing markets, is a potential strategic error.

The longer the ruse goes on, the more violent the reaction may be when the masses (finally) ‘awake’.

All of which brings us to biotech, XBI, SPBIO, $SPSIBI.

Biotech Truth

Truth about biotech is brutal; described here, here and here.

Exactly how this will all hit the mainstream in force, is unknown. However, let’s not forget, ‘when price action goes south, bad news comes out’.

Biotech XBI, Daily

Heading south at this point, is biotech XBI.

Market test of the Wyckoff up-thrust (reversal) appears complete; previously discussed here, here and here.

As of 1:40 p.m., EST, XBI is trading back into congestion (92 – 96) and looks to have formed a trading channel.

Left channel contact line shown as No. 1, is supported by this post, potential long-term reversal.

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

The Concept of ‘Test’

March 20, 2024 By in $SPSIBI, Biotech, Federal Reserve, Interest Rates, LABD, Monty Python, SPBIO, XBI 1 Comment

… Or, Natural Market Behavior

The financial press will always come up with some kind of ‘reason’ why the markets went up or down.

However, getting to the truth of price action is sometimes boring and also requires a focused amount of thinking.

That thinking requirement, puts it ‘right out‘ (as the Brits would say) for any kind of media consideration. 🙂

Therein lies the opportunity; case in point, biotech, XBI.

The sector did not move higher today as a result of any type of ‘good news’ for potential rate cuts; cuts that so far have yet to materialize (waiting now, for over a year).

No, XBI went higher today to ‘test’ the underside of resistance after its own break through that resistance.

Biotech XBI, 3-Day

As stated in the prior update, it’s going to take some kind of extra demand to get the sector back to bullish.

For now, it’s right below resistance and testing.

Obviously, what happens tomorrow, is important.

If we’re in a test, and not a new leg higher, the expectation is for very limited upside price action … if any.

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

Odds Stacked Against Biotech

March 19, 2024 By in $SPSIBI, Biotech, Federal Reserve, Interest Rates, LABD, SPBIO, XBI 4 Comments

Below Resistance & Trendline Break

Tomorrow’s the Fed interest rate announcement; anything can happen.

The way it stands now for biotech XBI (the day prior), an upside rally is against the odds.

The chart below for the sector is a busy one.

Biotech XBI, 3-Day

Price action’s below resistance (possible false breakout), has broken an upside trend to the downside (grey dashed line) and today, has come back for a test of both.

Breaking below resistance was accompanied by increased volume; bearish.

A significant amount of demand will need to show, to get this market back to the bullish side (not advice, not a recommendation).

The Fed interest rate announcement is scheduled for Wednesday, 2:00 p.m., EST.

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