Real Estate … Critical Mass

Struggling to Break Out of Wipeout

It’s still early in the session and it looks like real estate’s in serious trouble.

A change of events putting IYR declining at – 99%, annualized.

Several charts of real estate IYR, are presented below; not the least of which is the location of the first ‘DRV’ (3X inverse, IYR), entry.

Strategy, Tactics and Focus are the three tenets laid out by Livermore, Wyckoff and Loeb respectively.

Strategy: The real estate sector is ‘finished’ for this bubble go-round. Look for significant medium to long term trading (position) opportunities.

Tactics: Use Wyckoff analysis to identify the exact location where risk is least; The Danger Point

Focus: Significant trading opportunities are rare. When one is found, it must be used to its fullest extent.

This site presents the method above, in real-time.

The first chart of IYR shows the location of the initial DRV entry (not advice, not a recommendation).

Real Estate IYR, Daily

Positioning short this sector has been fully documented here and here.

As a result of yesterday’s action, also anticipated and documented here, the sector may have pivoted into a sharper trend; a trend declining at – 99%, annualized.

Is that a hyperbolic statement? Not if it happens.

As this post is being created, we’re going to look at the hourly chart of IYR (below) and show that price action is struggling to stay away from that -99%, trendline.

IYR: Hourly Chart

We’re at the top of the hour (11:00 a.m., EST) and the hourly candle may have just confirmed the new trend.

Summary

As said many times on this site, when or if, a major break occurs, there will be no getting in or out (not advice, not a recommendation).

At this juncture, now fifteen minutes past the top of the hour, price action is still struggling.

If it continues lower, does not break the trendline and prints below last week’s low of 92.89, it’s a serious event; more confirmation of the new down-trend.

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

Real Estate … Showdown !

Let The Lawsuits Begin

Let’s see …

We already have lawsuits for ‘The Speck’, injury and death.

Then we have the lawsuits because the stock price went down (always happens).

Now, we’ll have lawsuits for paying too much over asking price, because my real estate agent told me to.

Couple that with grocery store shelves going empty, power outages, fake wars (with real consequences), more corporate layoffs and voila!

The court case for any of the above, might be heard before 2030 … if you’re lucky, not homeless and we’re all still alive.

Was That, The Bounce ?

Yesterday, Wednesday was supposed to be the last chance for the bulls. The release of the CPI, being touted as a potential upward ‘catalyst’ for an already oversold market.

We even had helpful advice like this, saying ‘it’s so bearish, it’s bullish’.

Buried within that article was the caveat, extreme negative sentiment contrary indicators, only work in bull markets.

We’re not only in a bear market, it’s a full-blown collapse (so far). We’re on track for vaporization; all of which leads us to the market at hand: Real estate.

Real Estate, IYR, Daily Chart

The following chart contains a Fibonacci projection tool, showing levels from 23.6% to 100%.

Lower values such as 161.8%, are currently, off the screen.

It’s obvious, the market’s ‘respecting’ these levels as it hesitates (to confirm) before continuing lower.

However, the real story is on the hourly chart below.

Yesterday’s bounce is shown as well as a trendline.

The scary part, or good part depending on one’s perspective, that trendline’s declining at approximately 99%, annualized … effectively straight-down.

E.F. Hutton, Vice Chairman, Loeb

The late Chairman of E.F. Hutton said in his book ‘The Battle For Investment Survival’:

‘Real opportunities are rare. When you find one, it must be used to its fullest extent’.

This site adheres to tenets laid out by three masters: Livermore, Wyckoff and Loeb:

Strategy, Tactics, and Focus.

Shorting IYR via DRV (DRV-22-02) is our approach to what looks to be a significant opportunity (not advice, not a recommendation).

Summary

As long as IYR, price action continues to follow the trend lower, we’ll maintain short.

Anything can happen and the trend be violated … even at the next session about to start in 20-minutes.

However, at this juncture, probabilities for IYR, continue to point down.

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

Failure, Success: GLD & IYR

When A Spring Set-Up, Fails

The upside reversal (spring) set-up for gold, has failed.

When a high probability bullish scenario fails to materialize, it signals a market with potential to completely fall apart.

Nobody expects a major reversal in gold … nobody.

Yet … there it is

We’ve had the huge volume on March 8th, that looks more and more as changing of hands; from strong to weak.

Now, the apparent reversal has failed.

Anything can happen but at this juncture, the highs of March are getting farther and farther away.

Gold (GLD), Weekly Chart

Gold could always right itself and reverse from here.

We’ll keep an eye on it but let’s move on to a trade set-up that’s working; Real Estate, IYR and leveraged inverse, DRV.

Leveraged Inverse (-3X) Real Estate, DRV

The expectation for this morning’s session, was for IYR to retrace and test Friday’s breakdown.

It’s not happening … or at least, not at this point.

Wyckoff (along with Livermore) were obsessed with ‘what is’ and not what ‘should’ be.

The ‘what is’ at this point, IYR appears to be in a swift down move with minimal upside.

Trading actions have therefore been adjusted accordingly.

The chart of inverse DRV shows two entries marked as “1” and “2” (not advice, not a recommendation).

At this juncture, the short position in IYR via DRV (DRV-22-02), has been fully established.

The stop is now moved up to the session low @ DRV 37.21

Summary

At time stamp 8:10 at this link, The Maverick shows how far behind the curve interest rates are to what’s happened with Fed actions in the past.

If they repeat past behaviors, that of moving rates higher, it’s likely to be a massive shock.

The last place to be when interest rates rise sharply, is real estate; the most illiquid asset 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

BABA … Bull or Bear ?

The Level(s) To Watch

On one hand, BABA, has launched more than 60%, off its most recent lows.

On the other hand, that launch posted the highest daily, weekly monthly, and (about to be) quarterly volume, ever.

Markets tend to come back and test wide bar, high volume areas. Just that probability alone, coupled with the unprecedented volume behavior on four timeframes, points it to the bear side.

Shorting China FXI, via YANG, discussed yesterday (not advice, not a recommendation), is essentially a BABA short as that equity is weighted more than 10%, in the FXI.

So, let’s take a look at what BABA, is saying about itself.

BABA, Weekly Chart

The massive weekly volume highlighted below.

Next, we have a not-so good-looking picture (for the bulls).

BABA may be posting a long-term Head & Shoulders top.

Next, is the daily with its largest volume ever as well.

Getting closer-in on the daily, there are support levels to watch.

At this juncture, early in this session, we’re at support now. Breaking down puts the next, less defined support into play.

Positioning

The last post, showed what was then current positioning in FXI leveraged short vehicle, YANG (not advice, not a recommendation).

During the session yesterday, the YANG position was increased substantially. Essentially, the low-risk opportunity was used to its fullest advantage.

This method of trading goes way back to Livermore, Wyckoff and Loeb

Livermore:

Focus on the big picture and strategy. Look for the (potential) big move.

Wyckoff:

Use what the market is saying about itself to find the danger point. The point of least risk.

Loeb:

Real market opportunities are rare. When one is found, it must be used to its fullest extent.

Do NOT diversify. Focus positions and time the market.

Summary

As always, anything can happen.

BABA is currently at one of its support levels and holding for now … bulls still have a chance.

Obviously, the active trade, YANG-22-01, is taking the bearish stance. The plan is to have a tight, in-the-green stop, soon (possibly today’s low).

As this post stated at the outset, we’ve got all time high volume on four timeframes: Nearly a bearish case in itself.

The high-volume area may be tested.

That means BABA (and FXI) price action would need to move lower to perform that test.

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 Taiwan Connection

Eyes On The Prize

Huge truth bombs from a just released Stew Peters broadcast, linked here.

At time stamp 15:25, one of the major truths is Taiwan; specifically, Taiwan Semiconductor, TSM.

Why Taiwan?

Why focus on Taiwan Semi and its connection to the Emerging Markets, EEM, ETF?

We’re focused on it because that’s what the tape itself is telling us to do. The EEM, has already been in a sustained downtrend since mid-February, last year.

It’s been three successive (chart) quarters of lower lows and lower highs.

Looking at semiconductors in general, out of the top ten market cap equities in the SOXX, only TSM, is at or below its 23.6% retrace level. All others have rebounded much higher.

As Wyckoff said a hundred years ago … ‘somebody always knows something.’

Meaning, those really in charge (time stamp 2:53, above) already know the plan; their actions show up on the tape.

We’ll look at those tape actions with TSM below

Taiwan Semi TSM, Daily Bar

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

It’s clear, at this juncture, price action has stalled.

Two sessions ago (Wednesday, 23rd) there was an outside down (reversal) bar.

This session and yesterday’s, have been inside action so far.

There has been no new high or low, posted.

Although today’s action posted below yesterday’s low, it has not posted (currently, at mid-session) below the reversal low.

Summary

Anything can happen.

Price action, TSM could launch upward past the resistance and continue to a 38.2%, retrace.

At this point, it seems to be low probability; all the good news (i.e., the short squeeze), may be out.

We’re heading into the weekend and we’ve seen over and again, that’s when things go sideways.

As Livermore said, ‘surprises tend to happen in the direction of trend’.

TSM, is and has been, testing the underside of its breakdown; it now appears poised to continue lower.

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

Taiwan Semi … Reverses

The Market Leads The News

Price action leads the news, not the other way around.

The last update on TSM had this:

“A reversal away from this area confirms the channel and weights probability to more downside …”

As seen in the chart of TSM, a reversal is what we’ve got.

TSM, Daily Close

Note that volume increased on the reversal; helping to confirm the channel.

If this reversal ‘sticks’ and TSM continues lower, the downside potential is significant.

Summary

It’s a no-brainer to assess the world situation as unstable.

It’s exactly during these (once in several generation) events where international borders (for example) like Taiwan and China could potentially change.

Several links of interest on China/Taiwan are below.

China ‘There by tomorrow

Tencent shares plunge

Hong Kong … mandatory tests

China mandates ‘zero policy

China lockdowns to disrupt supply chains

What could go wrong ?

As Livermore said nearly a century ago … ‘surprises tend to happen in the direction of trend’.

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

TSM Collapse, Dead Ahead ?

Sell-Off, Has Been Orderly … So Far

Taiwan Semi (TSM) is the largest cap in the Emerging Markets, EEM (ETF) Index.

As we’ll see from a technical standpoint, TSM’s posted a massive bearish divergence.

That divergence is now being confirmed with price action breaking lower.

As shown below, price action’s launch from a low of 5.83, in November 2008, to a high of 145.00, on January 13th, this year, has been stratospheric; over 2,595%.

However, for about eleven months, the last part of that action was sideways. Then, a Wyckoff up-thrust during the middle of January and reversal lower.

That’s where we are now.

Taiwan Semi (TSM) Weekly Chart

Highlighting the divergence.

The problem or the benefit (depending on long/short), such reversals take much longer to play-out, than anyone expects.

Moving closer in, on the weekly.

At this juncture, TSM’s following a trendline lower that’s declining at approximately – 95%, annualized.

Volume for the week increased from the week prior, which increased from the week before that, also increasing from the week before.

Downward pressure continues; TSM’s down -30%, from its all-time highs.

Emerging Markets, EEM

When looking at the weekly chart of EEM, we can see the downward effect of TSM on this index.

Drilling down into the daily chart of leveraged inverse fund EDZ and compressing the vertical scale, one gets a sense for the potential of this move.

EDZ Daily (vert. scale compressed)

As a courtesy, entry dates, prices and current stop are listed (not advice, not a recommendation).

TSM & EEM, (EDZ-22-01) Targets

Coming up in another update, more specific (Fibonacci) targets for potential exit of the EEM short via EDZ.

At this juncture, an obvious (capital preservation) exit would be decisive penetration of the trendline shown or hitting the current stop; not advice, not a recommendation.

Summary

One of the hardest things to do for amateur and professional alike, is nothing.

That may be where we are with TSM, EEM and EDZ. The short position has been opened; stops and trend identified.

Now, the waiting.

As Livermore said nearly a century ago, it’s the waiting (not the thinking) that made him the money.

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 Usual Suspects

Special Edition … ‘The Dam Is About To Break’

We have a crescendo of events.

No. 1

Corruption At The Highest Levels

Hearings on Capitol Hill on what we call ‘The Speck’ (to avoid censorship) and “corruption at the highest levels”.

Those of us who are awake, already know about the corruption … it’s just nice to see it hitting the mainstream.

No. 2

Cowards, To Brave ? … Probably Not

Max Igan in this video seems to think those who have been brainwashed into murdering their own children, will all of a sudden become brave and wake-up.

No, an alternate (more likely) view is, those who have been duped, fooled, the cowards, or just plain stupid, will likely turn their anger, not to the perpetrators … but to those who are even now, being referred to as ‘purebloods’.

In his own video, at time stamp 10:30, he shows the type of behavior that may go to a whole new level.

Does anyone think these people are going to become more sane, when they find out the truth of the injections?

No. 3

Greedy Implosion ?

Another Stew Peters broadcast where the guest, Karen Kingston has sifted through legal contracts, patent application and patent abstract documents.

She may have found a chink in the armor.

Looks like in the haste for profits, one manufacturer of ‘Speck’ protection may have done so outside the umbrella of lawsuit ‘immunity’.

No. 4

Robinhood, Swimming Naked ?

It’s happening fast.

When the (economic) tide goes out, that’s when we see who’s left their swimsuit behind.

HOOD stock price may need to brace for impact … at zero.

No. 5

Bear Markets … The Great Equalizer

Everybody’s a genius in a bull market.

When the trend turns South, that’s the opportunity for one’s market skills to stand apart from the ‘genius’ crowd.

As this article says, ‘bear markets are tough’.

Indeed. We can see how tough (and profitable) they are from Livermore’s attempt to short the market during The Panic of 1907.

As stated in Reminiscences, the story goes that he recognized a huge market break coming but started shorting too early … in 1906, as the market continued to rally.

Eventually, those rallies completely depleted his capital. He went broke.

The book goes on to say he began trading again later on but does not say how he got another capital stake; just that his credit was good at the brokerage office of ‘Ed Harding’.

We have to go to Wyckoff’s text from 1910, to find out that Livermore hocked his car for $5,000 and may have used that to re-establish his trading account.

After that, his trading errors corrected, he eventually covered his short positions at the bottom of the panic, October 24th of 1907, with over one million in profits (around 30 million in today’s dollars).

No. 6

T-Mobile: Set To Implode By April

Is dumb going to get smart? Like in No. 2, above, the answer is probably not.

T-Mobile is set for implosion by April.

No. 7

What’s The Motive ?

If you ever watch ‘Forensic Files’ or similar broadcasts, the police and the lawyers are always looking for the motive to commit the crime.

Well, here it is.

No. 8

And Then, There’s This …

Activist Post in this article is naming names.

Data and artifacts are piling up to dam-break levels.

There’s a virtual army of citizen journalism working to discover and sift through databases and documents.

No. 9

The Parting Shot:

What does any of this have to do with the markets?

Well …

Get your popcorn ready, ’cause Kansas is going bye, bye ….

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.

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

Talking Turkey

Lessons From Mr. Partridge

From Reminiscences of a Stock Operator, ‘Turkey’, aka Mr. Partridge, was much older than the rest.

The rumor in the broker’s office was that he was rich.

Even so, he was not contributing to heavy commissions (i.e. day and swing trading) as far as Livermore could tell.

The other thing was, that he never offered advice.

If a stock tip worked out, he would thank the tipster … if not, you never knew if he took a position or not.

Losing The Position & Psychological Impact

Turkey’s ‘losing the position’ remarks impacted Livermore the most. He recognized that Partridge wasn’t some old duffer; he was an astute speculator.

Losing the position: Not the same as holding a loser.

Maintaining a profitable position during a correction while at the same time, recognizing a big move could be in the works, requires (mental) strength; let the market itself say when to get in and out.

This link has Prechter’s ‘missing out’ story on big gains.

Continuing on with Turkey.

In the book, he said he ‘paid a high price for his tuition’ and does not want to incur a second fee.

Attempting to ‘play’ the market in and out then repeat, by definition, leaves one out of the big move.

It’s not the move itself; it’s the recognition that fiddling with the position and losing it, has resulted in a lost opportunity that will never come back.

The psychological damage is immense.

It’s worse than taking major loss. Watching a move take off without you when you had planned for months (or years) for the set-up, may have left no way to recover.

Which brings us to the market at hand.

Gold (GLD):

This site is not advice, and it does not make market ‘calls’.

Presented here, are posts documenting how Wyckoff analysis is being used to spot market set-ups.

Those set-ups have shown themselves over time to be potentially profitable (not advice, not a recommendation).

The weekly chart of gold (GLD) shows the up-thrust that was months in the making.

We’re going to invert the chart and so, the ‘up-thrust’ now becomes a ‘spring’.

Note:

Back in the day, when I wasted time posting on SeekingAlpha, I would get numerous complaints about ‘inverting the chart’.

They wanted it spoon-fed and did not have the mental plasticity to look at situations from the opposite perspective.

The ‘inverting the chart’ came from none other than Dr. Elder, himself … discussed in Trading For A Living or Come Into My Trading Room if memory serves.

The main interest on the ‘Alpha’ site seems to be pontificating about how sharp your pencil is; how close you can come to guess what earnings (or some other meaningless fundamental) will be at the next release.

I have not been back in years … they’re probably out there still arguing … only this time, the banter may be about which “masks” are most effective. 🙂

But I digress.

Months To ‘Spring’, Weeks To ‘Test’:

The inverted chart of GLD shows it took months for price action to penetrate support and create a spring condition.

Since then, we’ve had a move higher and now lower coming back near support.

Is this a test or a failure of the move?

It was a short week. However, it may still provide actionable data. For example, range of GLD, GDX and NEM, all narrowed. Volume contracted as well.

The inference is, thrust energy is weakening and thus weights the probabilities to a ‘test’ and not a ‘failure’.

Deflation Pivot:

Interestingly, we’re starting the see the consumer has finally reached the limit of their spending. Price are staring to edge lower as reported here and here by Economic Ninja.

Another data point, a bit esoteric, is ammunition. Pices are starting to taper off as well. Most notable is 22-LR.

A couple of months ago, 22-LR was about 0.10 per round (bullet). Looking at this site, we see the cheapest price has dropped to .080/round.

That does not look like much but it’s a 20% decline.

Summary:

Everyone has their own time frame and market approach.

Taking a cue from Turkey, referenced above, I would rather sit through a correction, incur the erosion of profit than exit and ‘click my heels’ as Prechter puts it; then watch the original position move for a huge gain without me aboard (not advice, not a recommendation).

We’re likely to find out very soon if this is a major pivot lower or if somehow, gold (GLD) bulls gain control and drive prices higher.

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 Bulls … Trapped, Again ???

Turn The Screws

Thumbscrew

Having been on the wrong side of major moves numerous times, I have first-hand experience on what’s likely to happen next.

If the bulls are trapped for a second time, those in control, the bears, are going to put the screws to those on the wrong side (not advice, not a recommendation).

It could be a straightforward downward thrust or a slow capital draining grind.

We won’t know how bad it’s going to be (for them) until it’s over; Keeping in mind at all times, anything can happen.

Rule Of Alternation

Yesterday’s update said the following:

“Price action permitting, we’ll discuss how this first correction may be a brief one as opposed to a drawn-out choppy affair.”

Price action in GDX, has posted a new daily low (below last Friday’s low); a potential indication we could be starting the next leg lower.

The basis of that assessment is from a technical discussion published by Robert Prechter, Jr., in the early 2000s (’02, ’03, if memory serves) as ‘the rule of alternation’.

Basically, what happened last time, won’t happen this time.

Senior Miners, GDX

The daily chart shows the eight-day up-thrust, along with current action.

The mark-up makes it clear

It was eight days above resistance battling it out between bulls and bears.

Now, we’ve had one day above resistance (level posted on, 12/7) followed by a new daily low.

Correction Complete ?

The following (DUST-21-01), is the trade sequence currently being used.

Based on the above analysis, we’re going to tentatively call ‘The first correction’ as complete (not advice, not a recommendation).

Trade: DUST-21-01

  1. The Set-Up: Complete
  2. The ‘test’ or ‘gut-check’: Complete
  3. The first ‘correction’: Complete
  4. Continuation or Failure
    1. Trend identification
    2. Potential channel(s)
  5. Exit process
    1. Scale out
    2. Full exit
  6. Post trade evaluation

Looking For The Trend

Next up in the trade sequence, is identification of a trend or trends … if any.

For now, we have the potential channel shown below.

Now comes the part most traders/speculators find difficult; That is, wait.

As Livermore said in Reminiscences, (paraphrasing): ‘It wasn’t the thinking that made me money … it was the waiting’ (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