We’ve got the daily chart of LABD, leveraged inverse fund Biotech, SPBIO, above.
Next, we highlight the tight price action and note the failed push lower:
Scroll up and down between the two charts and you can see, this is an area where the market has firmed-up.
Tight action is usually (not always) a pre-cursor of an upcoming move. One side is taking control; about to take the market their direction.
Note: The last two days (including today) show a pivot of sorts … still very young.
Positioning:
The tight stop on the DRV position was hit early in the session. Exit was performed at DRV 4.4336 (not advice, not a recommendation).
That freed-up capital was then allocated to a position in LABD (again, not advice, not a recommendation).
The stop is tight at LABD 18.79.
Stay Tuned
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.
As is typical of Fed announcements, the market tends to go one way before the speech … then, the opposite way after the speech.
As real estate (IYR) pushed higher before the speech, it got just a little too far upward for comfort. The short position was closed out for one managed account.
As time progressed, price action was clearly setting up a spring condition; seen in the 30-minute leveraged inverse fund DRV, above.
The Project Stimulus Account closed its TZA position (for profit, table to follow) and the account then positioned long DRV, at about 4.49 (not advice, not a recommendation).
The stop is tight … the low of the day @ 4.42 (not advice, not a recommendation)
We’ll see what happens next
Stay Tuned
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.
If there’s a major volcanic eruption (Level VEI 5), the entire world dynamic will be changed instantly.
Not saying the La Palma eruption is another Black Swan … no, just that volcanic activity is picking up world wide and needs to be included in any ‘unforeseen’ event situation.
Real Estate (IYR)
Back at the markets, let’s see if everything’s ok in the bull camp for IYR.
The short answer is, it’s not decisive for either side as of this post
4-Hour Chart of IYR:
If we put in a Fibonacci retrace and then highlight the resistance area, it paints the picture more towards the bears:
Price action has reversed from a well defined resistance area … that just happens to be a 38.2%, retrace level.
So, we’ve got an excellent demarcation line.
If IYR price action gets significantly above the 38%, retrace, we’ll close out the DRV short (not advice, not a recommendation).
However, at this juncture, price action continues to retreat from the 38%, area. A good sign for the bears.
Stay Tuned
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.
From his 1923 book (Reminiscences), Livermore’s rules for going short were fairly blunt:
‘I’m not interested in shorting a stock until it goes down and stays down’
It’s possible that’s what we’ve got with real estate, IYR.
This past trading week was IYR’s opportunity to regain balance and attempt to move higher.
It didn’t happen.
Instead, we got a struggle for several days; ultimately breaking lower, late during the Friday session.
Note the volume increased markedly from the day prior.
Summary:
We’re short this sector (not advice, not a recommendation) via DRV. There are times were significant reversals start slow and take time to build … this could be one of those.
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.
The last update on real estate (IYR) was at the ‘abandon’ arrow. At that time, the assessment was, even though conditions appeared set for reversal, it just was not happening.
Something else was going on.
It came out weeks later, that ‘something’ was entire subdivisions were being purchased (above asking price) out from under qualified potential homeowners.
Well, has that trend finally exhausted itself?
Last week’s climactic price rise and volume, which is quickly being eroded suggests were at some type of transition.
An initial position in DRV (3X inverse IYR) was opened today as shown (not advice, not a recommendation).
Pushing below the support level around IYR 107, would help confirm there’s something more going on than just a breakout and test.
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 Russell 2000 (IWM as proxy) has been congesting sideways for about five months.
While the overall markets, S&P, Dow, SOXX, IYR and the QQQs, have been moving on to new highs … the Russell has stagnated.
Taking a cue from Steven Van Metre’s reports on ‘who goes first’ in a downturn, it’s the small caps.
At this juncture, it looks like the Russell’s ready.
The six month daily chart of IWM below, shows choppy action.
Pulling back somewhat and labeling the bearish wedge, puts it into perspective (second chart):
Pulling out and labeling the wedge:
One item of note (not shown) at the top of the wedge, where price action pivoted lower (August 6th), is a Fibonacci 62%, retrace level.
So, we have a bearish wedge retracing 62% … along with non-confirmation of the overall highs; S&P, Dow, SOXX, etc.
Major reversals take a long time to form. However, once they get underway, it’s like a juggernaut to the bottom.
Harkening back to the oil (USO) bear market of 2014, nearly all (if not all) the YouTuber’s at the time, completely missed the bearish set-up.
What they did instead, once the downdraft started, was pump out update after update about ‘catching the bottom and setting up for the new bull market in oil’.
It never happened.
Oil continued lower for a year and a half before getting into a sideways range.
The big money’s in the big move. Monitoring the Russell provides confirmation a significant reversal’s in the works (not advice, not a recommendation).
As with biotech (SPBIO), already in a bear market, the IWM could break lower while the overall markets continue to thin-out and even make new highs.
Recall, we’re getting close to an up-coming holiday: Labor Day
The 1929, high was on the Tuesday just after Labor Day weekend.
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.
First, let’s start with the July 29th analysis of GDX. That update showed price action about to ‘Up-Thrust’ into a reversal.
The update even gave a possible high for the top of the developing set-up.
That high was in the area of GDX 35.65, near the 38% retrace level.
GDX topped-out at 35.82; then reversed.
The set-up chart is shown below and followed with the price action result:
And the result …
Pulling out to look at the weekly time frame, it’s clear, GDX is in a down-channel.
The magenta arrows show channel contact points:
Summary:
Gold and the miners are not showing hyperinflation at this juncture. It’s just not there.
Something else is going on.
As with the real estate index (IYR) not reversing as expected from collapsing retail purchasing (within established malls and elsewhere), gold and the miners are not moving decisively higher.
With real estate, It came out months later (after abandoning shorts on IYR) that Black Rock and others had been buying up whole sub-divisions … specifically from D.R. Horton.
With gold, it may be something else.
As proposed several times, the ‘controllers’ may make it irrelevant.
If you can’t get to the bullion dealer to either buy or sell, does it really matter if the metal’s in your possession?
This is a long-term game and this site’s in it for the long haul.
Each side making its chess moves. With that, it’s probably a good idea to review the standard plan of those on the other side.
Anecdote:
From a personal standpoint, as this post is being generated, there’s a Leghorn Rooster in a dog kennel cage (in my office) that’s been crowing for about two hours.
The same one (only much larger now) seen in this brief video.
Roosters are absolutely verboten in this neighborhood.
He started to crow decisively (collar or not) about a week ago; starting around 6:30 a.m.
He was not part of the plan. The five chicks were all presumed to be hens and his appearance was sort of an accident.
Several iterations later, which included sound-proofing the garage, he’s got his own set-up in my office.
It’s been about two and a half hours now and it looks like he’s done crowing. Soon, he’ll be off to check out the hens and be on with his day.
As a result of his arrival, we’ve changed our thinking: It may not be long before sentiment (to the food supply) changes instantly. It’s possible everyone at that time will be clamoring for their own livestock … crowing or not.
They’re no guarantees we’ll be able to keep him a secret (but God willing).
However, if he can be kept on the down low and then food supplies are cut off or severly curtailed, we’ll be more than happy to offer “Stud” services … for ‘small’ fee 🙂
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 table lists well known index ETF’s; along with most recent highs and current (Friday) close:
All the usual suspects are there:
S&P 500, SPY, The Dow 30, DIA, Nasdaq, QQQ, and on.
What’s also listed is how far each index (ETF) is from its most recent all time high or ‘recovery’ high (in percentage terms).
Obviously, one of these is completely out of bed: Biotech, IBB
We’ll be discussing the technical condition of biotech tomorrow. For now, the updated ‘project’ chart’s included below:
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.
DRV pushed through our stop early in the session; position closed (not advice, not a recommendation).
1:50 p.m. EST:
Despite all the analysis, IYR is showing continued buoyancy.
Something else is going on; possibly related to Uneducated Economist’s link provided in the last update.
Taking his cue, a functioning mortgage market is all important to the financial narrative, it’s possible this market will be more heavily manipulated than others.
At this juncture it would make sense. All indications are for reversal … yet it’s not happening in any significant way.
Time for another trade.
We’re going back to a market that in retrospect, should’ve been the focus all along; Biotech.
This site’s coming from the perspective those reading, are well aware the ‘speck’ as we call it (to avoid censorship) was a fabricated event.
Just a reminder that we’re not some ‘Johnny come lately’, here’s the link from way back in May, last year.
That post proves the situation was figured out well before the May 17th publish date (interviews, observations conducted a month prior).
What’s not fabricated however, are the repercussions from the so-called cure for the speck.
Unfortunately, those are happening now and are quite real.
Moving on to the trade.
Despite the number of transactions shown in the Project Stimulus table (below), the objective is to minimize activity. We’re looking for a mid, to long term sustainable move; gain potential, 100% to 1,000%.
Monthly and weekly have reversed as well; both the monthly and weekly MACD indicators point down. Daily is essentially flat.
The hourly chart of LABD (3X inverse IBB) shows the entry location and subsequent price action. Stop is the session low @ 22.23 (not advice, not a recommendation).
It’s worth repeating, the false narrative on the speck and consequences of speck protection may blow up in the media (and biotech) at any time.
As J.P. says, getting people to do something they know is bad for them (or lethal) is the ultimate ‘elite’ high.
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® 