Miners, GDX Accelerates Lower

With GDX posting a new weekly low (below 33.23) early this session, it’s helping to confirm a pivot and acceleration to the downside.

Bullish or bearish, it’s a crowded trade that we’re avoiding (not advice, not a recommendation).

It took over a week of oscillating price action before GDX decided to post below the February 4th, low.

Even so, when an established low is penetrated, it puts the market in “Wyckoff Spring Position’.

That means there’ll (potentially) be some type of rally or rally attempt. If that happens, it’s just more oscillations that result in erosion of leveraged inverse funds.

Other areas of the market are performing better on the downside. Real estate IYR, looks like it may post a narrow range day (as of mid-session).

It’s typical action when at support. If there’s no break lower today, then IYR could make an attempt higher at the next session.

Based on previous analysis, that attempt (if it occurs) is expected to be short lived.

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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.

Hanging by a Thread

Semiconductor SOXX, is hanging by a thread.

Did SOXX just break away during the past week or is there going to be an attempt to close the gap?

When a market closes down for the week and near its lows, there’s usually follow-through action at the next open.

SOXX may never get the chance to fill the gap.

If we look at inverse fund SOXS, it’s showing a potential trend-line. Maintaining that line will double the price (at Friday’s close) sometime in early March.

The chart below also shows the firm’s entry point; not advice, not a recommendation.

In a way, semiconductors are similar to aviation; margins are razor thin.

When there’s an economic down-turn, both get hit especially hard.

At this juncture, I have positioned my firm short in both real estate (via DRV) as well as short the semi-industry (via SOXS). Not advice, not a recommendation.

The SOXS position finished in the green by the close. DRV is showing a loss but closing that gap quickly.

Separately, and in a report planned for tomorrow, we’ll cover the food supply. The ongoing (planned) shortage is proving correct, the approach it’s ‘corn first, then silver and gold’.

If Van Metre’s GDX forecast is on target (declining to 17, or even 14), gold bugs may find themselves liquidating their positions; just so they have enough money to pay for hyper-inflated food.

In effect, gold will be irrelevant; a very possible (short-term) event.

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.

Bear Flag … Bear Market

Bear flags post in a bear market

Bull flags post in a bull market

Right?

One would think.

It’s different though, if you’re a rabid ‘not-right-in-the-head’ gold bull.

The professional does not care which direction the market is heading. The only important thing is, and to paraphrase Livermore:

‘There’s only one side of the market to be on … and that’s the right side.’

GDX has posted and tested a bear flag.

At this juncture, it’s heading lower … possibly to test between 15 – 17, as was just mentioned yesterday, by Van Metre (time stamp 10:00).

Conversely, in the general equity markets, there’s reversal action with the S&P, Dow, Russell, all lower.

On top of that, bonds are in their own reversal (up again in the pre-market) as well as the dollar.

In the Van Metre link above, in addition to comments on gold, he also sates ‘the market is not prepared for a bond (and dollar) reversal.

When markets are sure of one thing and the other happens, it’s very ugly.

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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 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.

GDX Reversing, As We Speak

If GDX price action continues lower, it may have completed its test forecasted three-days ago.

The gold market is a very crowded trade. At this point, one to be avoided (not advice, not a recommendation).

If GDX posts a new daily low (below 35.40), it would give extra weight, the test is complete.

At the minimum, price action has recognized the bear flag by coming back up to test and then pulling away.

That alone, should give the gold bulls some pause.

In other markets, real estate IYR, did exactly as forecast. It opened below yesterday’s close and retreated from there.

The upward test, also discussed in this morning’s update may have already happened; there’s a 38% retrace present on 30-minute or shorter time-frames.

Correspondingly, the DRV position has been increased (not advice, not a recommendation). At this point we have an absolute hard stop: Yesterday’s DRV low, @ 9.67.

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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.

Real Estate Trend Test

Real estate (IYR) broke its nine-month trend; now testing the underside.

The break was on exceptionally heavy volume from January 4th through the 7th, and naturally lends itself to be tested. That’s where we are now.

Adding to the reversal premise, narrow thrust action preceding it.

When thrust distance narrows, it’s time to expect a trend change.

Up-side appears limited as IYR is contacting its trend while at the same time, approaching significant resistance in the 85 – 86 area.

Unless IYR penetrates that resistance, it’s still subdividing lower, indicating reversal in progress.

We’re still positioned short (via DRV, not advice, not a recommendation) with a bit more draw-down than desired.

The first hour of trading is likely to give a signal to stay in or step aside and wait.

Separately, in other markets, looks like GDX is going to test or start to test, underside (bear flag) resistance today.

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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.

GDX Upward Test Possible

Last week, Senior Miners GDX, broke out of a bear flag to the downside.

There could be a little more momentum lower before reaching support in the area of 33 – 34.

After that, expect a test to the underside of the flag. This is typical market behavior.

If that happens, we’ll have familiar gold bull hysteria ‘this is it!’ All the while, GDX and gold (GLD) grinding lower.

Recall gold (and related), is a very crowded trade. Eventually, there will be a sustained bull market … probably after all have grown weary hearing the rumor of it.

Anecdotally, remembering entries from a diary during the 1932 lows (the actual source has been lost), were to the effect:

‘Everybody knew that major stocks were a once-in-a- lifetime deal, but nobody had any money‘.

That lifetime deal, or deals may come. The objective is to survive, prosper and be ready when it gets here.

With that, there’re probably much better opportunities for a directional move to the downside.

Real estate, Oil & Gas Exploration sectors come to mind.

On the real estate side, it’s unfortunate, sad, but entirely possible a significant number of those to lose their homes through foreclosure, are somehow going to be housed in now-empty, or near empty commercial (mall) areas or office buildings.

If so, that relocation process will take a significant amount of time. The value of IYR’s components (SPG, EQR, etc.) may reach some type of bottom before it’s all straightened out.

We’re already past the beginning stages of a massive life-long depression.

Getting focused on it, is difficult but best if one is to come out the other side intact; or better yet, well positioned to re-build.

Next scheduled analysis: Real Estate, IYR

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.

Crowded Trades

Gold miner (GDX) bulls and bears have been fighting in a crowded trade since late November.

This morning’s GDX retrace up (and now down) from yesterday is a case in point. 

In such a choppy environment, inverse funds lose market value (downside bias) quickly and trades need to be avoided.

Meanwhile, on the other side of the market, biotech (IBB) has formed a top, reversed, and posted a new weekly low today.

An hourly trend-line has been formed as well (not shown). 

If it holds as (or if) IBB declines past current support (~152 area), that hourly trend is moving lower at just over -96%, annualized.

Maintaining negative trend, with declining momentum on both daily and weekly timeframes is what we’re looking for.

The objective (not advice, not a recommendation) is to move stops (shown below) and maintain the trade until stopped out or trend break.

As of this post (1:03 p.m. EST), the current price of LABD and BIS are listed in the ‘Close’ column. 

The “R-G/L” is from Dr. Van Tharp’s concept of Risk Gain/Loss.

Example:  If $1,000 of capital was “risked” (entry-to-stop) on the LABD, position, that position is now up by 6.83-R, or $6,830.

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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.

GDX, Higher Into Resistance

It’s pre-market and miners GDX, to open higher into resistance.

Doing so will cause exit of position established December 23rd.

There’s nothing wrong with getting stopped out and then re-entering if conditions still warrant a trade.

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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.

Gold Miners (GDX) Wave 3, Down

Senior Miner’s action, is counter-trend into resistance at ~ 36.20.

It was also, as the day prior, inside the bar from Tuesday, the 22nd.

Markets test wide, high volume areas.  It’s what they do and it’s happening now with GDX.

The other thing happening, is a possible completion of the ‘a-b-c’ counter trend action before heading lower in Wave 3.

Wave terminology is taken from “Elliott Wave” theory. 

From empirical observation, about the only time Elliott Wave is of any use, is when markets are highly emotional.

Emotional markets generate clear waves and we may be seeing that now with GDX.

As shown on the daily chart, Wave 3 projects to GDX ~ 17.35, which is a near -52% drop from current levels.

A significant upward push past the 36.20 resistance area would indicate a longer duration move to a 50% retrace.

With current GDX weakness, bonds reversing and dollar; with the ‘dumb money’ all-in, the most in history, probabilities favor downside action.

From a human interest standpoint, it’s unfortunate that so many are so ignorant about so many things.

However, the information is there to be had.  We have Steven Van Metre, Sajad, J. Bravo, this site, and many others with good analysis.

Of course, one has to pull themselves away from the propaganda and actually do some work and think … which seems to be a very foreign concept for the masses, the “retail investor.”

Soft-times are over. Hard-times ahead.

Those who have poured their heart out in attempts to wake up their relatives and friends, collectively, are tired of the process.

So, this site presses on, providing decades of experience having tens-of-thousands of hours of screen time, at no charge.

It’s not unreasonable to think, providing market truth may become illegal (or too expensive) at some point very soon.

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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.