The Market Set-Up … This Week

What To Watch … Crypto Collapse, Biotech, Gold, Telsa

JPMorgan … says sell

Goldman … says buy.

Wyckoff says … Don’t listen to either.

In fact, Wyckoff’s stock market training course, first published in 1934, (still available), says that until you can ignore the financial press completely, ‘You will never be successful in the markets’.

Price action itself, properly interpreted, will tell you where to look for the opportunity.

The Ponzi Implosion, Cometh

The market is littered with Ponzi schemes. Some have already imploded, CVNA, HOOD, Crypto; some have not.

Concerning Crypto, here’s an excellent update from Michael Cowan. Buried in that update, at time stamp 4:58, looks like HOOD, may be in even more trouble.

Biotech is in a class of its own and was discussed in yesterday’s update.

For gold, we’re going to look at the Junior Miners GDXJ, and last week’s action.

Junior Miners GDXJ, Daily Close

The Junior’s are the weakest in the sector; therefore, that’s where we look for a short opportunity (not advice, not a recommendation).

To move higher, above resistance, normal market behavior, is to come back to the lower blue line (i.e., support) to gain enough energy to move higher for a breakout.

To move lower, normal market behavior, is to come down to the lower blue line as a test which subsequently fails; the move continues lower.

Either way, normal behavior at this juncture, is to move lower. We’ll see.

Now on to the chief cook and bottle washer … Tesla.

Tesla (TSLA), At The Edge

For starters, let’s recognize there’re a lot of moving parts; U.S. ‘parts’ and China ‘parts’.

If one’s going short, another task is to forecast under what conditions a short would have enough risk removed.

For that answer, oddly enough, we go to gold, GLD.

Gold GLD, Weekly: 2015 – 2017

GLD posted a massive upthrust above the blue line lasting over fourteen weeks before breaking decisively lower.

Then, it labored four weeks to come back up for a test.

After that, collapse; lower weekly closes for seven consecutive weeks.

In the chart above, the area identified as ‘Short’, has as much upside risk removed as possible, right at resistance.

Now on to Tesla.

Tesla TLSA, Weekly

Two scenarios are presented where risk may be reduced.

Chart 1

Chart 2

One of these may happen or neither of them.

Either way, for risk to be reduced, a short entry is needed to be at a known resistance level (not advice, not a recommendation).

Let’s move on to the current positioning.

Positions: (courtesy only, not advice).

One of three events will happen at the next session.

1: Both positions stopped out

2: One position stopped out

3: No positions stopped out

Each outcome will provide a data-point where to focus (or not) in the current environment.

LABD-22-10:

Entry @ 18.1398: Stop @ 16.83

JDST-22-05

Entry @ 9.1666: Stop @ 8.79

Note: Positions may be increased, decreased, entered, or exited at any time.

***, Indicates change

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 Largest ‘Squeeze’, Ever

A Market Of Extremes

So, this is how it’s going to be.

The market itself is telling us it’s not going to be ‘well behaved’, possibly for years to come.

According to Goldman, link here, we’ve just had the largest short squeeze on record.

Friday, must have pushed it over the edge from the previously reported, ‘third largest‘.

The ‘Pontificators’

Everybody think’s they’ve got it figured out; We’re going to have stagflation, no wait, hyperinflation, no wait, inflation/deflation simultaneously, no wait, dollar collapse, no wait, gold to the moon, no wait, and on it goes.

What we really have, which is obvious to those ‘awake‘, is something that’s never happened before.

That ‘something‘ is here every day, multiple times a day.

Flash Crash, 2010

Every so often just as a reminder, this event is posted as an example; until that day, it never happened before either.

“Paper comes in, a big seller!!!”

 ‘Paper’ is essentially anyone (banks, hedge-funds, institutions, and/or retail) outside the pit.  Those in the pit are called ‘locals’.

Positioned At The Extreme

The largest short squeeze in history has actually performed a public service; the markets are at extremes.

With that, the short position in Junior Miners GDXJ, has already been discussed, link here.

We’re going to move on and talk about the elephant; more specifically, biotech SPBIO.

Biotech SPBIO

The table shows last week’s action when compared to the week prior. All major sectors had solid gains but it’s the right-most column that’s of interest.

The right-side column shows how far price action closed above the prior week’s high.

Once again, biotech shows overall weakness. It gets more interesting when looking at the weekly chart.

Biotech SPBIO, Weekly

It’s been three successive weeks of apparent up-thrust reversals that were negated each time.

Looking at the weekly below, what we have, is a huge bear flag that just so happens to be, Fibonacci 8-Weeks wide.

It’s possible, this congestion area is the mid-point of the overall move from the highs set during the week of February, 2021.

Compressing the chart and putting in a measured move target gives us the following.

If we have an actual Head & Shoulders top, that target is shown as well.

Either way, the downside potential is enormous; thus, requiring intense focus from a Wyckoff standpoint, i.e., during a bear market, identify the weakest sector for short opportunities (not advice, not a recommendation).

All of which brings us to positioning.

Positioning

On Friday, a discretionary exit was made from the entire LABD-22-09 position as (LABD) price action continued to decline with no end in sight.

Loss on the LABD-22-09, series was a drubbing of -12.2%

Then again, last week was the largest squeeze in history; taking that into account, the loss wasn’t -30% or -50%.

As the trading day progressed, LABD price action continued lower until low-and-behold, it reversed.

Once again, a position was entered (not advice, not a recommendation) but this time was different. Frist off, initial position size is smaller; about 60% smaller.

Secondly, the stop is an actual order that’s in the market (shown below).

Sounds obvious but we’re dealing with unprecedented times and market disruptions. Recall during the Flash-Crash of 2010, Kimberly Clark, or Colgate (if memory serves) went ‘no-bid’ and printed i.e., sold for 0.01.

That low print remained on the charts for years until it was ultimately removed.

If it can happen on the downside (i.e. when long), it can happen on the upside as well (when short).

Positions: (courtesy only, not advice).

LABD-22-10***:

Entry @ 18.1398***: Stop @ 16.83***

JDST-22-05***

Entry @ 9.1666***: Stop @ 8.79***

Note: Positions may be increased, decreased, entered, or exited at any time.

***, Indicates change

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

GDX, Down 5-Months, & Counting

Way Back, To 2012

We have to go all the way back nearly ten-years, to find five consecutive down-months.

The bear market in the miners GDX, and GDXJ, is not any news to those accessing (or following) this site over the long-haul.

Nearly two years ago, this report pegged the bear market before it was even a blip in anyone else’s pineal gland. 🙂

That fact’s proven-out by the listing of no fewer than ten links to other analyst’s super-bullish posts on gold and gold miners.

It’s safe to say at that time, everybody else was pointed in one (bullish) direction.

So, what’s happened to GDX (and GDXJ) since that October 25th, 2020, report?

GDX, is down approximately – 38.2%, and GDXJ, has declined – 47.6%.

Not exactly a bull market.

Senior Miners, GDX, Monthly Bar

Looking at the chart, it’s obvious; the prior ‘five-months’, distance traveled, was much less than our current situation.

Add to that, there’s no real support until lower levels. The decline’s free to continue, unabated.

Summary

This site’s primary focus is strategy. The longer term, the better.

Including the October 25th, 2020, report on the gold miners, we’re coming up on several other significant two-year anniversaries:

Bitcoin to Replace Gold?

Dollar Reversal; Ready

Corn Goes Vertical

Let’s not forget, ‘The Speck’, as we call it, was identified as a hoax well over two years ago; documented with this post.

The intuitive assessment of only partial data (at best) was, and probably will remain, the most important post of all.

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

Newmont Mining’s Collapse

Where’s The ‘Inflation’?

As if on cue to support the prior post highlighting silver’s ‘mysterious’ decline, we have this just out, on Newmont Mining.

Newmont’s in free-fall.

For long-time visitors to this site, today’s events should be no surprise.

These reports, here and here, posted back in April, identified reversals in gold miners GDXJ, and implicitly GDX, to the day.

We’ll include a quote from the first linked report below:

“It’s a fairly safe assessment, nobody expects a downside reversal … nobody”.

And yet, here we are.

As the administration and the financial press, becomes ever more confused and bipolar; even now, re-defining the long-held definition of ‘recession’, we have Wyckoff analysis time and again, cutting through the media trash to determine the highest probability for the market.

Newmont Mining (NEM) Weekly

The chart below has current conditions for Newmont.

Also shown is the location of the first post linked above, released before Newmont began its decline.

At this juncture, NEM has penetrated long established support; technically it’s in ‘spring position’.

The expectation is for some kind of (weak) rally attempt. We’ll see if it’s able to get back above support.

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

Seabridge Gold … Strategy Update

Lying In Wait … For Opportunity

As the ‘About‘ section says, this site provides one leader’s view on the market; what can best be termed as ‘Strategic Leadership’.

So, just what is that, exactly.

A good example is the current biotech analysis and action.

Biotech strategy, thus far.

No. 1:

Recognize biotech (SPBIO), as bear market leader.

No. 2:

Wait for opportunity to position short via LABD, on an upside reversal; A Wyckoff, up-thrust.

No. 3:

Monitor and increase the short position as the market allows. Continue until targets are met or stopped out (not advice, not a recommendation).

As can be seen, hereherehere, and here, the trade LABD-22-03, is progressing well.

It should be noted, this trade could be over in minutes, or go on for months. The price action itself, will decide when it’s complete (not advice, not a recommendation).

Now, on to gold in general and Seabridge, specifically.

The Gold Reversal

We’ve had several updates that show gold (GLD) has changed hands; from strong to weak.

Quite obviously, this assessment is completely opposite the narrative and the crowd consensus.

However, price action itself, has told us there’s been a reversal.

Recent posts here, here, here, here and here, successively build on themselves showing at this juncture, the gold direction, is down.

Leading Edge Chaos

Evidence continues to build, we’re just on the leading edge of chaos; likely to last for years, if not decades.

Go to time stamp 1:12 at this link and observe one of many efforts already in place to take down the current system.

Chaos, Opportunity, and Seabridge

All of the above brings us to Seabridge Gold (SA).

Going way back, 20-months, to the first post on SA, and taking the following from that report:

“If and when the markets (S&P, Dow, NASDAQ) reverse in earnest, there’s likely to be widespread panic. Just like last time [2007 – 2008] and probably worse.

As a side note: If and when we get there (panic selling), and if SA pushes below well-established support (6-area), the initial plan is to open a major long position … but with a significant caveat.

That caveat is:  We’ll take possession of the actual physical shares (not advice, not a recommendation).  The broker could put up a fuss and charge a fee.  So be it.”

Now, that’s a strategy.

Back then, nearly two years ago, it was not so obvious why having the physical shares was important. I think the reasons for doing so now, are clear.

Let’s move on to the actual chart of SA and look at probabilities.

Seabridge Gold (SA), Quarterly Chart

One thing is obvious just looking at the un-marked chart:

The bull market for SA, ended years ago; October of 2007, to be exact.

The actual price of gold (GLD) went on higher for over three-more years. Yet, SA languished.

Now, gold (GLD) has potentially reversed and there’s possibility for significant downside.

How significant? Well, somewhere in the range of $1,300/oz, or even lower.

Which brings us to the same chart of SA but adding Fibonacci projections.

SA, Quarterly Chart, Fibonacci Projection(s)

Getting closer-in with the zoom, we see the market itself has already validated those projections; especially the 38.2, level.

The 50% projection is near 5.00, and the 61.8%, is all the way down to 0.49 – 0.51.

Seabridge down to 50-cents, is that possible?

The Great Depression, 2.0

Those attempting to equate current events with the Great Depression, are at least doing the good work of recognizing the similarities and possibilities.

In the case of Neil McCoy-Ward, (linked above), he recognizes this time, is a whole other animal.

So, the answer is yes … SA could go to 50-cents. If and when it does, nobody will want to buy.

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

Gold is Down … What ?

Supposed ‘Safe-Haven’, Goes South

With this morning’s turmoil, gold “should” be higher, right?

Before we even get started, everyone needs to know or be reminded, the word “should” is a ruse; it’s a trap.

Just like there’s no crying in baseball, there’s no “should” in the markets.

Instead, we replace that word with any of the following: Expectation, probability, empirical, set-up, and not the least of which is, ‘price action’.

Case In Point

Gold is down hard but it should be higher.

Coming from that perspective, then leaves you scratching your head, attempting to figure out ‘why’ gold has not moved higher.

With that, off we go on a never-ending rabbit trail having full encouragement of the financial press; making sure you never find the answer.

On the flip side, coming from a Wyckoff perspective, we look at gold (GLD) and ask the following:

What is the market saying about itself?

That brings us to Friday’s action and the chart of gold (GLD), below.

Gold (GLD), Daily

Long-time users of this site may instantly recognize the set-up.

To help make it more clear, we’ll go down to the hourly chart and mark it up.

Gold (GLD) Hourly

There we have it.

The repeating pattern of “Spring-to-Up-Thrust.

Let’s go back to the daily and put in the same notations.

Gold (GLD), Daily

Following on with this morning’s action we have this.

Price action has already posted a new daily low; adding confirmation, the trend remains down.

The fact there was heavy volume this past Friday, sets the hook even deeper into the bulls.

This action, up-thrust plus volume, may result in yet another sustained pivot to the downside.

Summary

It took me twenty-years of diligent search to eventually find the answers to market behavior.

That answer came in 2007, in the form of Wyckoff analysis and the late David Weis, with his video, linked here.

I was fortunate to be mentored by him before he became somewhat of a star … having a waiting list a mile long.

After that, was the constant study of his daily market updates for more nuggets of wisdom.

In a nutshell:

Gold (GLD) reversed today, because price action got itself into an up-thrust condition after launching from a spring set-up.

That’s it.

There’s no CNBC, no Fed, no Fast Money, no Russians, no Hyper-Inflation; just the market, itself.

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

Miner Reversal … 7-Weeks Later

Strategy Update … GDXJ

Wyckoff and Fibonacci analysis allowed the reversal of gold miners GDXJ, to be identified to the week and then, to the day.

A quick review of this post, is the reversal on a weekly basis and this one is a follow-up, showing Fibonacci correlation on a daily basis.

If we want to go way-back, this report, shows the miners were not in a bull market and have not been for some time; for years, actually.

That does not mean there were no trades for upside or downside; there were.

However, from a strategy standpoint, gold miners are not bullish.

So, let’s look at the Junior Miners GDXJ, as it’s the weakest in the sector.

Junior Miners GDXJ, Weekly Chart

Un-marked

First Mark-up

The reversal is at Fibonacci 89-weeks, plus one day.

However, it’s the next chart that’s more disconcerting for the bulls.

Price action reversed right at a Fibonacci 23.6%, retrace; indicating severe weakness (if it holds).

The two black lines above the 23.6%, are 38.2%, and 50%, respectively.

The next chart zooms into the reversal area.

This week has already posted a new weekly low, providing additional confirmation of the reversal.

As gold, silver and the associated miners reverse lower, we have news reports of precious metals purchases going off the charts.

Where was everybody in 2001, as gold was bottoming?

That’s, 2001 – to – 2022, a Fibonacci, 21-years.

Which brings us to the next point.

The YouTube “Herd”, is Forming

Several YouTube sites that have been monitored for years, have recently blown-up, passing 100,000 subscribers; more than a few are past 200,000 or higher.

Recently, they have started giving each other ‘shout-outs’, to indicate their approval of that particular site’s ‘content’.

Viewer, Beware

By definition, the ‘herd’, does not have the right answer.

Each one is now monitoring what the other one is doing; they are all, influencing themselves.

The only way to have a hope of getting unique insight is to remain aloof. Wyckoff described this exact phenomenon in his autobiography.

He had very wealthy clients that wanted to get closer (unlimited) access to him. To this overture, he refused.

He isolated himself and remained cloistered.

Summary

Thus far, the analysis of gold ‘changing hands‘ remains intact. Gold continues to be well off its highs; silver is not anywhere close.

Strategy, Tactics, and Focus.

The Junior Miner’s reversal can’t be disputed … there it is.

If precious metals and the miners are not responding to all the ‘money printing;’, then something else’s afoot that’s not being revealed to us in the proletariat.

That ‘something’, is probably starvation … which gets us back to Genesis 41; corn and grain come first, then gold and silver (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

Gold … After The Reversal

Changing of Hands’

It’s a significant, if not major event, when one market participant (collectively) hands off the trading vehicle to another.

In a decline, that usually means the ‘average investor’, the least disciplined, least knowledgeable, gives up and hands off to the professionals; the ‘strong hands’.

In a blow-off top, the reverse is true.

The professionals lead the ignorant along with whatever narrative is necessary so that enough volume is created to successfully exit positions.

The changing of hands for gold and gold miners, was identified on this site, here, here, here, here, here, here, and here, starting over two-and-a-half months ago.

The analysis was consistent throughout; we are not in a long-term, sustainable, bull market. That stance applied most specifically to gold miners GDX, and GDXJ.

For that assessment to change, price action itself would have to change character; not the lagging momentum indicators, moving averages, price oscillators and so on that are themselves, defined by price action.

So, let’s take a look at what gold (GLD) is saying about itself.

Gold (GLD), Weekly Chart

First, the un-marked chart.

Next, we see a medium to long term trendline that’s been decisively broken and tested.

Getting closer-in, we can see the oscillation about the line, the break and subsequent test (with reversal).

What’s Next?

Well, that brings us to Harry Dent.

Love him or hate him. Here he is, offering up a perspective that’s not going to be popular.

How can gold (GLD) decline from here?

Let’s take a look.

If the wedge above is in-effect, if it’s the dominant factor at this point, then a break depending on location would take GLD down to about 130-ish.

If that happens, it will be a big event … down to approximately $1,300/oz.

However, it’s what may come next, that will be totally unexpected.

It’s interesting, the wedge in blue has a measured move target right to the bottom of the larger wedge in magenta.

To get below $900/oz, will be a very different place.

With that in mind, this site has presented time and again, we’re in an unprecedented world-event.

‘Normal’ is not coming back … ever.

Awake, or Not

Jerimiah Babe, in one of his latest videos hints there’s a strange vibe to what’s happening: Time stamp 5:20,

‘There’s something going on here …’

The Fed may actually be telling us the truth … just not in the way we expect.

You have to be awake to read between the lines.

Inflation may indeed be ‘transitory’ as they say because consumer demand is going to evaporate.

Evaporate not because the consumer can’t afford it, but because there are, or will be, no consumers.

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 ProLogis ‘Connection’

Largest Cap, In The IYR

The French Connection

As with Newmont Mining in the Senor Miners Index GDX, ProLogis is the largest market cap in the Real Estate Index, IYR.

When markets ‘thin-out’, when they reach the end of a long sustained bull move, capital exits the lower caps, the lesser performers, and is thrown into the last man standing; the largest cap(s) in the sector.

In can be argued, that’s where we are now with IYR.

Friday’s Wipe-Out

As expected, because of the near thousand point drop in the Dow, YouTube’s abuzz with everyone attempting to figure out what’s going to happen this coming Monday.

The Maverick does an excellent job (linked here) of posing the question, ‘Where are we’?

He doesn’t even bother with are we in a market collapse; that’s pretty much a no-brainer. It’s the ‘where’ in the collapse, that’s the question.

Real Estate … What’s Next?

From this site’s perspective, we’ll let the market itself tell us what’s likely to happen next.

Since the focus over the past week has been real estate (IYR), let’s look at the largest cap ProLogis PLD, to get clues on the next potential action.

ProLogis PLD, Weekly Chart

First, we’ll look at the big picture.

PLD was vaporized in the last market collapse.

We should also note, it took about 12-years to get back to pre-crash levels; good ‘ol ‘buy and hold’ 🙂

Of course, a multi-year covered call strategy could have been implemented if maintaining long. With that approach, PLD could have potentially become a cash-cow.

Crash Clues

Note on the chart above, PLD didn’t just up and crash; it gave clues well beforehand.

We’ll go into those clues in a later update.

For now, let’s look at next week’s probable action.

ProLogis PLD, Daily Chart

First, the un-marked chart to show where action finished up on Friday.

Next, we see an upthrust, test and sharp reversal.

Price action finished at support and just below the lows set on Monday, the 18th and Monday the 25th.

Wide, high-volume bars tend to get tested.

So, we’re below the lows with a wide high-volume bar. That puts PLD, in spring position.

Summary

Because PLD and IYR (and the rest of the indices) finished at or near their lows, there may be some downside follow-through this coming Monday.

Price action’s the final arbiter but there’s potential for some kind of upside test in the coming week(s).

As a courtesy, the DRV chart below shows the entry location for DRV-22-02 (not advice, not a recommendation) and the current stop.

Note how liquidity has picked up over the last two weeks.

Friday’s volume of 309,800 shares, was the largest ever for the inverse fund.

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

Gold To Rally ?

In Position For Upside Test

As long as almost no-one catches on to the Fibonacci time correlations playing out in real time, they’ll continue to have validity.

First, some housekeeping.

The downside action in Junior Miners GDXJ, was a vicious move; from top to bottom (thus far) it dropped over – 17.5%, in just six trading days.

This type of collapse was not really expected as YouTube and ZeroHedge are still filled with the manic bulls.

The short position, JDST-22-04, launched higher as a result.

Taking advantage of the hysteria, that position was closed out today (not advice, not a recommendation).

The expectation is for some type of relief rally in gold and the miners.

Gain on the whole event, which included three entries and three exits was around +24.1%

Moving on to the chart.

Gold (GLD) Daily

We’re at Fibonacci Day 34 and have just slightly penetrated support (blue line).

That puts GLD, in Wyckoff Spring position … although the push below support was not really enough to expect a rally (if it occurs) to go very far.

Today’s action opened up a significant gap and it just so happens, the close of Friday’s bar (April 22nd) is right at 23.6%, retrace.

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