Category Archives: Jerimiah Babe

Inflation or Deflation?

March 7, 2021 By in DRV, ice-age-farmer, IYR, Jerimiah Babe, Real Estate, The Speck 1 Comment

Is the latest stimulus bill inflationary or deflationary?

For those adhering to the tenets of Wyckoff analysis (as this site does), you already know it’s sort of a trick question.

The answer is: It doesn’t matter.

Maybe a better way to put it, it’s the wrong question.

The right question is: What’s the market saying about itself?

The market itself will decide (or reveal) the next probable direction.

Before we get to the charts; remember, one objective for the (U.S.) markets and political kabuki theater is, destroy the middle class.

Exactly how that’s going to happen in the final act is unknown.

Perhaps it’ll be illegal to go to the bullion dealer (or the grocer) without proof of protection (injection). Problem solved.

That destruction remains the backdrop; the macro for the analysis.

Moving on to the charts:

Real estate remains in a terminating wedge. Last week’s action had IYR contact the lower wedge boundary and then retrace into the close.

Weekly volume was the highest since the week of March 13th, 2020, almost exactly one year ago.

So, we see the ‘face ripping’ Friday rally, ‘plunge protection team‘ action, had no material effect on the chart’s technical message.

Looking at it a different way, there’s also an axis line in play.

Market oscillations about axis lines are completely normal.

We’ll see if Monday’s action is ‘buy the rumor, sell the news’. We’ve already had buy the rumor (stimulus) with Friday’s rally.

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.

Real Estate: Downside Targets

February 27, 2021 By in DRV, IYR, Jerimiah Babe, Positions, Real Estate, Van Metre

IYR has reversed with a decisive ‘outside-down’ week.

This sector has likely seen its highs for the year and probably its all-time (recovery) highs.

The latest news from Steven Van Metre does not paint a good picture for the economy or the markets (bonds excepted).

Jerimiah Babe (J.B.) has also posted an update on Los Angeles. It’s a human and economic tragedy. Unfortunately, this is where the Cadillac has gone off the cliff.

We’ve continually held to the stance, there’s no recovery.

The “recovery”, is a mainstream narrative intended to keep the herd focused in the wrong direction and on the wrong things.

Judging by the hysteria with small cap short squeezes, physical silver and bitcoin (kind of hard to access when the power goes out), the promulgator to the proletariat, the mainstream media, has done an excellent job.

In fact, that is their job.

Interest rates might only need to stay elevated for a short while (a few weeks) to completely choke off any semblance of economic activity.

After that, collapse is likely to feed on itself. Even if rates eventually go back lower, it’ll be too late. The juggernaut has been set in motion.

This week had IYR posting outside-down. That in turn, added a print to the P&F chart which helped to complete a downside forecast.

Reaching the target levels puts IYR below all recent support. That support would then become resistance for any upside counter-trend action.

Ultimately, we’re looking for IYR to go below 2009, lows.

If that happens, it could take months or years. P&F charts are independent of time. They only show potential.

As provided in earlier updates, my firm is positioned heavily short IYR via DRV (not advice, not a recommendation).

From here and depending on market action, the plan is to increase that short until volatility prevents further, low risk entries.

As always, anything can happen and next week could be a miracle reversal. If so, we’ll assess price action at that time.

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.