Category Archives: Livermore

How To Use ‘Seasonality’

July 21, 2024 By in Livermore, Seasonality, SOXS, SOXS-24-12, SOXX, Trump, ZeroHedge

Three Months of Down

For the next three-months, until the end of October, the (net) seasonality of the markets is down.

That’s not all.

According to this link, we have a bevy of technical and fundamentals suggesting the overall direction of the markets is to lower levels (not advice, not a recommendation).

Lower is good … at least if one is positioned short.

With that, we’ll look at the semiconductors, SOXX, to see how seasonality might help on a (potential) short position.

Semiconductors SOXX, Daily

If the channel remains intact, we’re still at the beginning.

Of course, the very next session can completely blow this analysis apart. That’s the way of the markets.

For now, however, we do have a channel, we do have the above-mentioned seasonality; probability and pressure is to the downside (not advice, not a recommendation).

Turkey & Position

For those familiar with ‘Reminiscences‘, and ‘Turkey’, a.k.a. Mr. Partridge, we should all know the importance of maintaining position.

The objective, therefore, is to attempt to maintain a short position (via SOXS, or other short) as long as possible, given the trading channel and bearish bias (not advice, not a recommendation).

Simple But Not Easy

One of the very first things the Online Trading Academy (Dallas) told their class back in the day, working the markets with a profitable plan of action should be ‘simple’.

They also said, the problem is, it’s not easy.

Here’s just one unrelated example of a simple job (i.e. ‘protection’) that’s obviously, not easy.

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 Moderna Reversal

June 19, 2024 By in $SPSIBI, Biotech, Dr. John Campbell, Elliott Wave, IBB, Livermore, Loeb, MRNA, PFE, Prechter, SPBIO, Wyckoff, XBI, ZeroHedge 1 Comment

When Price Action Heads South …

Said many times;

‘When price action heads south, bad news comes out.’

That’s a slightly different take on Prechter’s (Elliott Wave) observation.

‘Price action leads the news; not the other way around’.

Going to BigCharts, typing in MRNA, shows they still have no P/E.

So, the ‘bad news’, can’t be they’re not making any money because they’re not doing it, now. 🙂

I wonder, who can it be now?

For a clue to the (potential) answer, we can look at what’s happening to Pfizer, link here and here.

However, let’s not get ourselves wrapped around the axle on events, forecast years ago.

Rather, let’s go straight to the truth, the price action and see what it’s telling us.

Moderna MRNA, Weekly

The entire move from low to highs is shown. Included on the chart, are two Fibonacci indicators.

One is the standard ‘retrace’ indicator; the other, is a ‘projection’ indicator.

The ‘projection’ is based off the ‘a-b-c’ move from the lows of November 2nd, 2023, to the highs on May 24, 2024.

The retrace and projections are hard to see, so the ‘Detail‘, arrow is where we’re headed next on the daily.

Moderna MRNA, Daily

If there ever was a chart to once-and-for-all, refute, dismiss, trash, the whole ‘Fundamentals’ argument, that earnings, interest rates or some other ‘Voodoo economics’, moves prices, this is it:

MRNA, price action hit the 23.6% retrace level (exactly) for two days before moving on to hit the 161.8%, projection (exactly) before reversing.

Note the ‘100%‘ level as well; price action confirmed this area (exactly) three times! Once on the way up and two times on the way down (third time, not shown).

A century ago, Livermore said, ‘It’s all about the numbers’.

Strategy, First

Just as Livermore was primary a strategist, so is this site’s method of analyzing the markets, i.e., Strategy, Tactics, Focus, in that order (not advice, not a recommendation).

The news has been replete with reports like this one and this one.

Another panic ahead?

Sounds like it but at least in the case of Moderna, the chart itself says (effectively):

‘There’s no money in it’.

That means, another wave like we saw several years ago, is not the most likely future event (not advice, not a recommendation).

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

Nat-Gas … Heading Lower?

March 20, 2024 By in BOIL, David Weis, Livermore, Natural Gas, UNG, Wyckoff 1 Comment

No Breakout, Yet

The upside breakout anticipated and discussed in the last update has not materialized.

Instead of UNG, moving higher to penetrate 16.08, it’s moving lower.

We’re already at multi-decade lows, in Wyckoff spring position.

So, let’s look at what’s going on, getting down to a more granular level, the hourly chart.

Nat-Gas, UNG, Hourly

Action on the hourly shows a breakdown from a wedge.

Standard ‘measured move’ shows potential for UNG to target 14.50 – 14.60, (not advice, not a recommendation).

We’re already at historic lows, so continued downside may just be splitting hairs.

Strategy First

From a strategic standpoint, already discussed, is our new-normal environment of ‘disruption‘.

Expecting uninterrupted access to our current infrastructure is not the reality.

If UNG, manages to post new lows, we’ll address the potential for a strategic, long position (not advice, not a recommendation).

My former mentor, the late David Weis had a penchant for looking at the very long term, even yearly charts.

This also maps into Jesse Livermore’s approach; identify what’s likely to happen in a ‘big way’.

Remember, we have the EIA Nat-Gas report coming up, typically released on Thursday.

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’s Massive Channel

November 11, 2023 By in IYR, Livermore, Positions, Real Estate, SRS, SRS-23-03

Trading Channel, A ‘Mile-Wide’

We all know something’s coming; we just don’t know what.

A century ago, Livermore said, ‘surprises typically come in the direction of trend’.

Back in August, this update said if certain conditions were met (trend breakdown), then real estate has ‘enormous downside potential’.

Since then, events have unfolded to increase the probability of downside for IYR (not advice, not a recommendation).

The weekly chart of IYR spells it out. We’re in a (potential) massive downside trading channel.

Real Estate IYR, Weekly

From the left side low (October 2022), to the right-side test two weeks ago, is Fibonacci 55 weeks, plus one week; well within an acceptable margin of error for timing.

Anything can happen and IYR could somehow power higher into more testing or a channel breakout.

Until then, positioning in this sector remains as follows (not advice, not a recommendation).

Positioning

The current short position via Leveraged Inverse Fund SRS, is identified as SRS-23-03.

The initial entry was documented here and here.

Hard Stop is SRS 19.25, with a Soft Stop (discretionary) at SRS 19.79 (not advice, not a recommendation).

As of Friday’s close, initial position profit is about + 5.7%.

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

Good News, Bad News … Biotech

September 19, 2023 By in $SPSIBI, 1907, Biotech, LABD, Livermore, Positions, SPBIO, The List, Wyckoff 4 Comments

When Price Action Heads South

One of the first things a professional (mentor) will teach aspiring traders, is:

‘Big money potential is on the downside’.

A famous example of this, was during the Panic of 1907,

Jesse Livermore raised capital by hawking his car for $5,000 (according to Wyckoff), then shorted the market.

Near the bottom on (or about) October 24th, 1907, he covered; netting over $1 million in profits.

That Was Then … Is That Now?

Well, conditions change, but human behavior does not.

Back in the day, it was newspapers, telephone, telegraph and ‘rumors’; today, we have Cramer 🙂

You’ll have to judge for yourself if the posts on this site are providing worthwhile insight.

Let’s move on to Biotech, SPBIO.

Since I am short this sector via LABD (not advice, not a recommendation), we’re going to look at that vehicle.

Biotech Leveraged Inverse LABD, Daily

After the entry on 9/14, at 16.99, price action has not looked back.

Note, the entry had a very tight stop as covered here.

The ‘risk’ is determined as the distance from entry to stop; in the case above, 16.99 – 16.66 = 0.33-pts.

For example, a ‘risk’ of $1,000 let’s say, equates to a position size just over 3,000 shares LABD (not advice, not a recommendation).

Trending

The chart shows LABD, is currently trending higher at an aggressive rate.

There’s no guarantee this will continue to hold.

However, at the same time, there’s been no ‘news generating’ breakout, either.

So, at this point, it’s all under the radar.

Bad News Comes Out

When price action heads south, bad news comes out.

On a daily basis now, with articles like this and this.

Positioning

The initial position has already been discussed.

Other minor ones have been opened but the more important part, is Stop placement.

The initial Stop has been moved from LABD 16.66 to yesterday’s low of LABD 17.59 (not advice, not a recommendation).

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

Has AI, Started To Crack?

September 9, 2023 By in Artificial Intelligence, Livermore, Positions, SOXS, SOXX

Quiet, At The Beginning

For those who may be new to the reversal, the SOXX, top was posted here; the pivot to the current downside identified here.

Probabilities point to more downside, but if AI, and specifically, the SOXX, manages to move higher from this point, the above two links at the minimum, highlighted tradeable pivot points (not advice, not a recommendation).

Go Big or Go Home

Way back, from Jesse Livermore’s book Reminiscences, he talks about establishing large (low risk) positions early, before a move has really had time to accelerate.

As price action gets farther away from the entry, risk increases (not advice, not a recommendation).

Positioning

This site seeks to emulate the strategies and techniques used by three masters, highlighted in the About section.

With that in mind, the chart shows how one trader has positioned in the leveraged inverse fund SOXS (not advice, not a recommendation).

It’s the ninth trading series for SOXS, this year, hence the identifier.

The first number column is the entry price, the second, the initial stop and then trailing stop.

Last column is the current close price.

Notes from the previous post on the trading channel remain unchanged. The SOXX is trending down, until it decides otherwise.

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

SOXX, Hits Downside Target

August 19, 2023 By in Artificial Intelligence, Livermore, NVDA, Prechter, Semiconductors, South Sea Bubble, SOXS, SOXX

First of Many?

At this point, market bulls have to be just a little bit nervous.

Is the reversal from Friday, going to hold into next week or was it just a blip on the way to much lower levels?

Can a ‘Once in 300-years mania’, affect us here and now. Is that knowledge useful for day-to-day decisions?

One way to answer is to place that fact in the ‘fundamentals’ category; knowing it’s there but stay absolutely focused on the immediate truth, that is, ‘price action’.

The SOXX, So Far

We can see the SOXX reversed as identified here.

Then it continued lower, formed a trend line, shown here (using inverse SOXS).

Fast forward to now.

The weekly chart (below) shows price action contacted the first Fibonacci projection ‘exactly’ and rebounded.

That ‘rebound’ was Friday’s reversal bar.

Semiconductor SOXX, Weekly Candle

We’re at a critical juncture.

Livermore said years ago, ‘surprises tend to come in the direction of trend’.

With that, Google may have just released the first of many AI, and specifically NVDA, market surprises.

That report is the for the mainstream and even it admits, ‘There was a lot of hype’.

When hype is exposed, the market typically exacts its own form of revenge.

That revenge usually falls on the ‘little guy’ who’s left holding the bag, unable to fathom, ‘the experts’ were only in it for 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

Gold At The ‘Wedge’

May 20, 2023 By in DUST, GDX, GDXJ, Genesis 41, GLD, JDST, Livermore, Michael Cowan, Neil McCoy-Ward, The Speck, Wyckoff 1 Comment

What Comes Next ?

Gold bulls could get cooked.

If gold does not go higher, it’s because of ‘manipulation’, right?

The typical YouTube gold grifter acts like manipulation is a new discovery.

It’s the ‘go-to’ excuse when their forecasts don’t work out.

Way back in the early 1900s, Wyckoff discovered the market has always been manipulated.

His insight was, it’s up to the speculator to figure out the objective of the manipulation and then act accordingly (not advice, not a recommendation).

Livermore knew about manipulation and even engaged in it himself. He looked at things in a slightly different way; meaning, what is, not, what should.

A very key difference.

So, let’s look at what is happening with gold (GLD), and where it may head from here.

Gold GLD, Weekly

First, the chart from the April 9th, update.

Now, the updated chart.

It took gold (GLD) several weeks to labor higher on ever shortened thrusts before finally exhausting itself and rolling over into a reversal … where we are now.

Is price action hesitating before heading higher or is this a significant downside move in the making?

It probably won’t be long before we have the answer.

Junior Mining Sector GDXJ, Weekly

The gold mining indices GDX, and GDXJ, have already made their decision, reversing to the downside.

Note: Each reversal from a gold peak in the Junior Sector GDXJ below, is at significantly lower levels. This is not gold miner ‘bull market‘ behavior (not advice, not a recommendation).

It’s clear, the Junior Miners are in a bear market …

The GDXJ, is completing or has completed what is an obvious bear flag or terminating wedge.

Unless price action shows us differently, this is the current assessment; lower prices ahead (not advice, not a recommendation).

Fundamentals

From a fundamental standpoint, where’s the demand for inedible (possibly fake) metal going to come from? The consumer’s already tapped-out and borrowing money just to buy the weekly groceries.

Maybe something else is going on.

Something else that’s causing precious metals miners to anticipate another huge (economic) move lower.

Possibly completely unrelated (in a way) to the mining sector … maybe yet another ‘Speck’ event, shown at time stamp 3:40, at this link.

At the same link, time stamp 5:25, we’re back to the food supply … yet again.

“And all countries came into Egypt to Joseph for to buy corn; because that the famine was so sore in all lands.”

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

Nat-Gas … Spike & Reversal

April 14, 2023 By in Food Supply, Livermore, Natural Gas, UNG, Wyckoff, ZeroHedge

Doing What It Does

Nat-Gas likes to spike at reversals.

In that sense, it’s similar to the silver futures market; it’s just what they do.

A spike does not guarantee reversal.

However, when we get one like today’s early morning (pre-market) session, it’s time to watch and position for what happens next (not advice, not a recommendation).

The futures chart link here, shows the early morning spike to 1.946. Now, we’re getting a recovery and test.

So, What’s Next?

The fundamentals say, nat-gas is lower on ‘over-supply’.

That may be true but here’s where it gets interesting; supply can be ‘destroyed‘ in an instant.

In the above article, the colloquial ‘ZeroHedge Guys’ with astute comments, shed light here and here.

Moving on to the chart of Nat-Gas we’re looking at UNG on a Fibonacci 8-Day, basis.

Natural Gas UNG, 8-Day

The chart shows a Wyckoff spring set-up in progress.

We’ve pushed below support.

Now, early in the session (11:20 a.m., EST), price action is inching its way back to test the resistance.

Positioning long at this juncture is potentially both strategic and tactical (not advice, not a recommendation).

Strategic in the sense, we’re operating in an environment of possible ‘shortage’ and ‘disruption’.

Tactical in the sense, nat-gas tends to reverse on a spike (either up or down).

Probabilities have put the odds to the upside.

Target Area(s)

If nat-gas gets to the target area shown, we can expect the requisite chaos to be part of the picture.

As Livermore frequently said, we’re looking at ‘what is’ and not what we want it to be.

If this is a medium to long-term move, we’re still in the very early stages.

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

Another ‘Data Point’, Collapse

January 5, 2023 By in 1907, AMZN, Baltic Dry Index, DRIP, DRIP-23-01, Livermore, Oil, Oil & Gas, Wyckoff, XOP, ZeroHedge 2 Comments

Baltic Dry Index

‘The longer the delay, the bigger the break.’

That was Jesse Livermore’s assessment of the market just before The Panic of 1907.

That Was, Then

Back then, it was money spent on The Boer War, tight financial conditions and extreme overvaluations.

Looks more and more, like today

It’s been this site’s opinion for about a year (now supported by data), that we’ve gone straight past recession, into economic collapse and depression.

And Now, This

Another data point confirming the ‘depression’ scenario is this, just out from ZeroHedge: The Baltic Dry Index had its largest one-day collapse on record.

As if to drive it home; demand is in free-fall as Amazon, just announced plans to fire 18,000 workers.

From a strategic standpoint, collapsing shipping demand means collapsing fuel demand.

Which brings us to the sector of the day, Oil & Gas

Oil & Gas Sector XOP, Weekly

The last update, showed the weekly chart has reversed down and stayed down.

XOP is penetrating support, now at The Danger Point®.

The daily chart has more detail; we’re hovering at support, testing the right side trendline (again).

Providing some (minor) upward bias for the day is this report on WTI (West Texas Intermediate).

Oil & Gas Sector XOP, Daily

It’s 1:31 p.m., EST and XOP, has not posted a new daily high (it’s very close).

Doing so, would weaken the downtrend case and point probabilities to a Wyckoff spring move higher.

Summary

Demand is rapidly collapsing on many fronts and the WTI report linked above uses the word ‘tepid’.

That may be completely inaccurate or misleading when considering the demand for shipping has seen its worst down-day, on record.

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