Oil … Gas … Gold & Newmont

Markets, At Critical Juncture

Nemont Mining (NEM), Gold, and the Oil & Gas Sector are at a critical juncture.

The rest of the major indices, Dow, S&P, QQQs, real estate (IYR), and so on, are in a similar position.

For this update, we’ll focus on Newmont (NEM), as it’s the largest cap in the Senior Mining Sector GDX, and a general representative of the commodities markets.

Financial collapse is a process, not an event.

Newmont topped-out in April, of last year. Exxon, the proxy for the Oil & Gas sector, may have reached its highs this past November.

Where’s The Inflation?

As Michael Cowan has just reported, banks are absconding with depositor’s money under the guise of ‘bail-in’.

If the fiat cash is so worthless, why are banks seizing it?

As Robert Prechter Jr., said years ago, ‘all fiat cash ultimately goes to zero’; the end game (most likely) for the dollar. However, it could be months, years, or even a decade before that happens.

For right now, today, this minute, the data is showing us, the banks want the money; ‘Show me the money‘.

With that, let’s look at the non-existent ‘inflation’ in the mining sector.

Newmont Mining NEM, Weekly

The first chart identifies the heavy volume and then test of wide price bars. This behavior is common in the markets; they tend to come back and test wide high-volume areas.

Next, we see there’s a terminating wedge developing as volume declines; the inference, is lack of significant commitment at these price levels.

We’ll get close-in on the wedge; last week printed a lower weekly low and closed lower for the week.

There’s no breakdown of the wedge … yet.

At this juncture, it’s up to the bulls to show they’re still in control.

Inflation vs. Scarcity

We have without a doubt, the effects of the event from the past three years gaining momentum. Whether or not those effects reach a peak this year, is unknown.

A lot of the mainstream and YouTuber’s alike talk about the upward move in gold as the result of ‘inflation’.

Here’s a little bit of insight you’ll not find anywhere else; how about gold rising because the above mentioned ‘effects‘ are causing production volumes to decline?

Maybe it’s because of scarcity (along with nearly everything else) that’s causing the increase in price.

Just to drive that idea home, the latest total gold production numbers, listed here.

Gold production for 2020 dropped -8.2%, from the year prior. Year 2021 was down -1%, from 2020.

From 2010 to 1019, gold production increased or was flat year over year … that is, until 2020.

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.

The Danger Point®, trade mark: No. 6,505,279

Gold … Repeating (Short) Set-Up

At The Extreme

Gold is at the extreme … again.

It’s also posting a repeating pattern; indicating a short set-up (not advice, not a recommendation).

As presented over a year ago, that set-up is defined as what’s called (in Wyckoff terms), a spring-to-up-thrust.

Meaning, price action has a repeating tendency to go from one trade set-up to another.

We’ll go to the daily chart.

Gold GLD, Daily

The Changing of Hands, is included because as of yet, that (downside) reversal has not been decisively negated.

There’s no downside capitulation volume; indicating we’re on the other side (bullish side) of the current downtrend.

Now gold is at The Danger Point®. The ephemeral place where risk is least; price action can (easily) go either way.

So The Question Is, Which Way?

Here’s one perspective that’s reasonably balanced.

The theory is all about Central Banks … ok, if it works.

From a personal (trading) standpoint, the fundamental approach was abandoned years, if not decades ago.

Moving closer-in on the daily, we have the following.

Price action is struggling at resistance (upper blue line).

As stated in a prior update, if GLD, can’t hold and move above this level, it’s an indicator of potential serious trouble to the downside.

Of course, it goes without saying, the miners, GDX, GDXJ, are at similar danger points.

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.

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

The Day After

Marginal New Highs

The day after the third largest short squeeze in market history, we have marginal new daily highs.

Gold was one of the markets that made news this week with it ‘leaving the station’. 🙂

Let’s take a look at gold (GLD) and how I used its message to position short (not advice, not a recommendation).

Gold (GLD) Daily

First, we’re going to re-print the original analysis below from November 4th.

And now, the result

We’re right at the edge. Any higher and it could be bona fide breakout.

The miners rallied in kind.

Senior Miners, GDX, is in an up-thrust of its own (not shown) along with the Juniors GDXJ; being a weaker sector it’s extended but not able to push as high as GDX.

Junior Miners GDXJ, Daily

Note the black line and arrow.

Seniors, GDX, was able to penetrate this area on its own chart but GDXJ, has not (so far).

This gives us an extra layer of resistance for a short position (not advice, not a recommendation).

We can add to that as noted, it was the third largest squeeze in history and today was slightly higher … so what else is there? Risk has (nearly) been squeezed out.

About an hour after the open, a short was opened using GDXJ leveraged inverse fund JDST; JDST-22-05.

Position details and stop locations are to be provided in the next update.

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.

The Danger Point®, trade mark: No. 6,505,279

Gold Leaves The Station … Again

How Many Times?

How many times does gold need to ‘leave the station‘, before it’s actually left?

That’s probably a better question to ask rather than freaking out every time there’s a blip higher.

Was the recent ‘blip’ tradeable? Yes.

Is the move sustainable to the upside … probably not but only price action will tell.

Did Wyckoff analysis give advance notice that gold (GLD), could move higher?

Yes, it did … link here and here.

That first link even shows how far GLD, is likely to go, which at this point, is just ticks away.

Gold GLD, Daily

We’ll start first with the original forecast.

And the result (as of 1:20 p.m., EST).

We can see price action nearing the up-thrust (reversal) location.

Note: Penetration to the upside above resistance, does not necessarily mean it’s a short opportunity.

Any opportunity will be determined by price action itself.

Summary

Wyckoff analysis not only can provide potentials for price movement; when that move happens, it can also be a stabilizing factor so that one is not caught up in the usual media hysteria.

Meanwhile, back at the ranch, biotech sector (SPBIO) is still on track (ever so slowly) for a potential sustained move to the downside (not advice, not a recommendation).

Positions, Market Stance (courtesy only, not advice).

LABD-22-09:

Special Note:

This sector and leveraged inverse LABD are highly volatile. Character of the market can change at any time.

LABD may be exited without notice.

Entry @ 19.88, 19.71, 21.23, 21.65, 22.16, 22.75*** Stop @ 20.21

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

***, Indicates change

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.

The Danger Point®, trade mark: No. 6,505,279

The Market Set-Up … This Week

What To Watch … Biotech, Gold, Real Estate, Tesla

Biotech:

There’re a lot of moving parts to biotech and it’s like a game of chicken.

Is there going to be another ‘planned’ event pulled out of the bag that requires ‘protection’ or will this side (and this one) win-out before that happens?

Price action’s always the final arbiter and right now, it’s positing lower.

Gold:

Gold (GLD) ‘blipped’ higher on Friday and the usual suspects are out touting the hyperinflation narrative.

Owning (some) precious metals seems to be a good thing.

However, the public constantly knee-jerks into this sector and is absolutely rabid in their behavior (i.e., silver stockpiles are running out!!!).

It suggests at least, there’s something else afoot.

Prechter published in the early 2000’s, Central Banks, are followers, not leaders. The fact they are buying gold at this point, may be a contrary indicator.

Talk about going against the herd. 🙂

Over and again, it’s the boring (does not generate ‘clicks’) food supply first, then gold and silver (not advice, not a recommendation).

Real Estate:

What can be said?

It’s the largest manufactured bubble in world history and it has already popped.

Thinking it’s all going to sort itself out in a year or two is delusional. We’ve probably got decades of bear market.

Tesla:

Anyone with an anode of research capability, knows the whole EV premise, is based on a falsehood.

However, that fact is probably not what’s going to bring Tesla (and the rest of the market) down.

Let’s stop for a moment and consider the above link which has been available for nearly four-years.

How many views? Just 9,824 (as of this post)

That equates to only 0.003% of the U.S. population.

As the global supply chains implode, getting parts and having stable infrastructure (i.e., electricity) will probably be the defining factor.

Now, on to the charts.

Biotech SPBIO, Daily Close

The following sessions will let us know if we’re at the right edge of the downtrend line.

We’ve already had an up-thrust reversal and a test of that reversal. last Friday was lower … probabilities point down.

Gold GLD, Daily

Looking at the chart on the strategic, longer term, Friday’s blip is hardly noticeable. We’ve already presented how this could be a minor up-thrust (reversal) in itself.

To keep the upside intact, price action must remain and continue above current levels.

Real Estate IYR, Daily

Real estate may be working its way into an up-thrust condition. As shown, Fibonacci Day 21 from the October 13th, low is this coming Thursday, the 10th.

According to the Economic Calendar there are several potential catalysts that may push the price above resistance (temporarily).

Tesla TSLA, Weekly

The short-term look has been presented here.

Longer term downside potential is disconcerting.

Major support near the 25-level.

Summary

When we look at last Friday’s action (table below), it’s clear SPBIO, was not part of the upside party.

Of course, we won’t know if it’s’ the downside leader until subsequent sessions.

In the meantime, the market positioning remains unchanged.

Positions, Market Stance (courtesy only, not advice).

LABD-22-09:

Special Note:

This sector and leveraged inverse LABD are highly volatile. Character of the market can change at any time.

LABD may be exited without notice.

Entry @ 19.88, 19.71, 21.23, 21.65 Stop @ 19.41

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 Market Set-Up … This Week

What To Watch … Bonds, Gold, Real Estate, Tesla

Bonds:

Last Friday, the bond reversal posted a shallow retrace.

We’re looking for upside follow-through at the next session.

Gold:

If gold (GLD) closes below 154.67, on Monday, it will be seven consecutive down months.

Momentum has slowed to a potential inflection point.

Real Estate:

If bonds move higher, real estate may follow. We have potential targets and Fibonacci timeframes.

Tesla:

This update, said to watch if/when TLSA, broke below support.

It did just that during the following week but now, it’s hesitating.

As a result, we have a Wyckoff ‘spring’ set-up.

Now, on to the charts.

Long Bond TLT, 30-minute

We’re drilling down to the 30-minute.

The blue line is Fibonacci 23.6%. Price action (at this point) shows the beginning of a move higher from that level.

Moving decisively higher at the next session, puts the terminating wedge into play, shown here.

If we get a wedge breakout, then we have a measured move target in the vicinity of TLT, 115.00.

Gold (GLD) Weekly Chart

A close below 154.67, on Monday, would put GLD, at seven consecutive down months.

GLD, has never closed lower seven consecutive months; not since inception, on 11/18/04.

Gold remains in a down-channel that’s a Fibonacci 13-Weeks wide.

Last week’s move helped to re-confirm the channel.

That action is itself, a Fibonacci 34-Weeks from the ‘changing of hands‘ high, during week-ending, 3/11/22.

However, momentum of price action has slowed.

If there’s going to be a break to the upside, this would be the place; otherwise, watch for continued GLD downside.

Real Estate IYR, Weekly

If bonds continue their upside reversal with rates lower, we can expect real estate IYR, to have some type of ‘dead cat’ bounce.

If so, how long and how high.

An infinite number of scenarios are possible. However, the chart of IYR, shows what to expect for two of those possibilities.

Real Estate IYR, Weekly

The uptrend (blue line) has been decisively broken. What has not yet happened, is a ‘test’ of that break.

Shown are potential tests; Week 8 (from 10/14/22, lows), at Fibonacci 38%, and Week 13, at 50%.

Between ‘Week 8’ and ‘Week 13’, is the December Fed meeting … a possible catalyst.

Tesla (TSLA) Weekly

This one seems a bit far-fetched but here it is, anyway.

If bonds rally, the rest of the market may also rally; that could include our chief cook and bottle washer, Tesla.

Price action bounced at support and penetrated it several times before printing outside-up on the weekly (twice).

By definition, it’s a Wyckoff spring set-up.

A spring tends to go straight into an up-thrust; a repeating pattern, shown on the chart at around TSLA, 315.

Set-ups can also fail … so, we’ll be watching this one closely.

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.

The Danger Point®, trade mark: No. 6,505,279

No ‘Soft Landing’ or ‘Hard Landing’

There’s Only, ‘Collapse’

The ‘narratives’ are false.

There’s no ‘recovery’, no ‘soft landing’, no ‘hard landing’.

There’s no ‘housing boom’, no ‘inflation’, and maybe most of all, no (sustainable) ‘Electrical Vehicle’ market.

What there is …. is ‘collapse’.

Collapsing food supply, collapsing economy, collapsing real estate, collapsing employment and collapsing (electrical grid) infrastructure.

How do we know that?

The price action (the market) itself, says so.

Wyckoff, The Rest, and Gold

As stated in the last update, unlike other analysis methods, Wyckoff looks at what the market is saying about itself.

The market itself, defines the next likely course of action.

Two days ago, gold was used as the example.

Contrary to the ZeroHedge report linked in the prior update, Wyckoff analysis revealed the most probable direction for gold, was down.

The Gold (GLD) Market

The Fed announcement late Wednesday, resulted in a ‘blip’ higher for gold that stalled-out, the next day.

However, that announcement, may have confirmed a trend change in GLD.

Looking at the chart below, it’s possible that Wednesday identified a more aggressive trendline, lower.

Gold (GLD), Daily

It’s about an hour after the open.

This is how it looks for GLD.

The new trendline and trading channel are clear; trending lower at approximately -60%, annualized.

The next chart is a zoom of the pivot area.

If there ever was going to be a Fed ‘Pivot’, this was it. 🙂

The price increases being touted as ‘inflation’ are clearly the result of supply destruction.

You can’t have 90+ ‘food processing plant fires’ in the past year or so and not have it affect prices at the supermarket.

Same goes for crop failures or lack of harvest world-wide.

Summary

As always, anything can happen. Gold could reverse and mount some kind of rally.

If somehow, there’s a change of demand, it will show up on the tape (the chart) as a change of character.

So far, there is none.

Most likely direction remains to lower levels.

Parting Shot

Just to illustrate the point of ‘collapse’, we’ll leave off with this recent report from Scott Walters.

The real estate example shown is the River Oaks area of Houston … Highly affluent.

There’s no debate.

It’s a collapse, when a house has to drop $20 million, from $26.5-mil to $6.5-mil, and Still Not Sell!

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.

The Danger Point®, trade mark: No. 6,505,279

‘Tipping Point’ For Gold ?

“Sentiment Is Negative” … So What?

No sooner had the bearish report on silver been released, than we have a bullish report on gold at ZeroHedge; linked here.

We’re going to address the bullish view briefly but succinctly, with the weekly chart of gold (GLD) below … but first.

When ‘Sentiment’ Works

One little trading nugget that took about 25-years to find out (your mileage may vary), was that in a sustained up or downtrend, sentiment is largely, irrelevant.

In the ZeroHedge report linked above, the ‘little guy’ (i.e. sentiment) is bearish or negative. We all know the little guy is nearly always wrong.

Not to worry.

If gold and silver move decidedly lower from here, our ‘little guy’ will think he’s a genius.

He’ll begin (or continue) to post all kinds of philosophical memes on twitter and Facebook; then set himself up for the big whammy farther down the road. 🙂

The pros will get their money no doubt; they’re patient.

Now, on to the weekly chart for gold (GLD).

Gold (GLD), Weekly Close

We’ve already discussed how penetrating support will put gold (GLD) in Wyckoff spring position.

It’s clear we are there now.

As it says in the chart, support penetration was preceded by a very weak bounce.

The difference between Wyckoff analysis and others is that Wyckoff focuses on what the market’s saying about itself.

At this juncture, price action to the upside (the bounce) is weak; suggesting that momentum remains to lower levels.

The following chart is a zoom of that bounce area.

Summary

This update’s several hours before the 2:00 p.m., EST, Fed announcement … likely to be a non-event, anyway.

Nonetheless, if there’s a significant change in price action, we’ll review it at that time.

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.

The Danger Point®, trade mark: No. 6,505,279

Silver … Cue The Hype

What If Europe Abandons ‘Green Energy?’

The ‘Texas Freeze‘ laid bare the farce that is ‘renewable’ energy.

Will this coming winter do the same for Europe?

Like a limpet on an ocean liner, the ‘silver squeeze’ idea won’t go away.

Here we have yet another report; linked here.

The data in the report’s not in dispute. If that data is to be believed (no reason not to), silver stockpiles are shrinking.

Even so, the major trend-change (down) in silver was identified way back in February of 2021; reports are linked here and here.

The second report stated silver had ‘changed hands’ from strong to weak.

It’s been nearly 20 months since then; silver remains below that February 1st, 2021, level and is down -35.7%, as of Friday’s close.

I like silver as much as the next guy but what we’re discussing here, is strategy.

Silver To Single Digits?

Is that even possible?

Well, was oil going negative possible?

Not until it happened.

The monthly chart of SLV below, has a standard Fibonacci projection shown. Note how at 23.6%, the projection shows price action tapped and reversed down.

Next up is 38.2% at around 13.75, and then 50%, below the 10-area.

Silver SLV, Monthly Chart

Zoom version

And then, a trading channel.

Both silver and gold, are at The Danger Point.

Gold has pushed below support and is currently in Wyckoff spring position.

Silver is below the 20-area, which is established support.

If a rally is in the cards, this is the place to start.

A failure to move decisively higher at this point signals the potential for much lower prices ahead.

Summary

The next update will discuss various tactics that could be used if/when there’s a major downdraft.

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.

The Danger Point®, trade mark: No. 6,505,279