Exxon: Higher, Still ?

Major Resistance At XOM: 69 – 70

XOM’s the largest cap in the sector. We’ll use it as the proxy.

Last update has us exiting a short via DUG (not advice, not a recommendation) and standing aside for now.

It’s no secret the overall markets are insane … possibly in some kind of massive blow-off, FOMO top.

At the same time, they look like they’re ‘thinning-out’; that is, only a few are participating in the upward launch.

It’s a bearish warning

Thinning-out, tends to happen at the end or near the end of bull markets.

Looking For The Short

The big money’s made on the downside with down moves being two or three times faster.

The Daily closing chart of XOM above shows it’ still grinding itself higher.

Trend lines below say the upside may be reaching a limit:

If we zoom-in, it looks like there’s significant resistance at the 69 – 70 area for XOM … if it gets that far.

Looking For The News

With the current instabilities, world events, food supply, energy supply, earthquakes, volcanoes, we could get some kind of upset to launch the oil sector higher.

It may not happen.

If it does, that could be the time to re-enter short (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

Update: Exit DUG

DUG Pressing The Lows … Standing Aside

Although this site is not a ‘service’, it is in good taste to be forthcoming on our market moves.

As said yesterday, there’s a lot of froth at the top. We’re certainly not going to hold a losing position into the weekend.

Exit was performed on DUG as shown.

Analysis to follow

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

Oil: Froth At The Top

XOP Down, XOM Up

Oil sector proxy XOP, posted outside-down (key reversal) while Exxon (XOM) closed higher.

If we’re in the middle of a reversal, this is normal.

Parts of the sector are already heading lower while typically, the larger caps are the last to complete the change.

This interview with Carter Worth, even though it’s short at only two-minutes thirty seconds, paints not-so-good picture.

He says in a typical scenario that’s repeated twice since the late April ’20 lows, oil has declined by 16% – 20%.

When asked how the equities would do, he hesitates, then says ‘It’s not worth the risk [to be long]’.

It’s a polite way to say they’re likely to get whacked.

Moderna (MRNA)

By now, everybody’s heard the news on Moderna.

Trouble for Moderna was spotted a while back and discussed in this post … along with a prediction that class-action may be forthcoming.

Our stopwatch is still ticking.

Positions

The account positions are short Oil & Gas XOP, using DUG as the vehicle (not advice, not a recommendation).

So far, its been a lot of banging around without much progress either way. However, at this point, a new low for DUG, below today’s low would signal trouble for the short side.

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

Exxon Breaks Trendline

Sector Reversal Case Builds

While the overall markets move higher, XOP continues lower and Exxon (XOM) just broke its trend-line to the downside.

XOM is the largest cap in the Oil & Gas Exploration Sector.

We’re using XOP as the proxy and DUG for leveraged inverse.

Over the next day or so, we could get an underside test of the break. However, it was not really dramatic.

With all eyes on other markets like S&P, Dow, Q’s and so on, XOM may just decide to drift on lower …

Positioning:

At this point, there’s nothing that says to cover shorts by exiting DUG (not advice, not a recommendation).

The trade is progressing. So, we’re going to leave it alone.

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

‘Stealth’ Reversal, Oil

XOP Lower Open, Signals Weakness

Nobody’s Looking

A higher XOP open would have probably been a short set-up (DUG) failure.

However, that’s not what happened.

The open was lower but then price action went on to post a new daily high above yesterday’s.

At this juncture, the short set-up is still valid (not advice, not a recommendation).

How can a new daily high be acceptable for a short position?

Repeating Set-Up:

Back in August this post was created to help document a market behavior that’s probably been repeating since the beginning.

My former mentor, David Weis used to call it ‘Spring to Up-thrust’, using Wyckoff’s terminology.

The fact the set-up’s been repeating for decades, if not a century or more, is definitive proof traditional valuations and fundamentals have nothing to do with actual price movement.

That’s a topic for another time.

XOP Analysis:

We’ll start with an un-marked XOP daily chart:

It doesn’t look like much is going on. So, let’s zoom into the far right side using the 15-minute, below:

Ok, what am I supposed to see?

Marking up the chart, we have the following:

Once we have the correct annotations, it’s obvious XOP just posted a ‘Spring to Up-thrust’.

True, it’s on a minor time frame like the 15-minute; however, it does give a clue XOP, could be in for a more significant and longer-term reversal (not advice, not a recommendation).

Positioning:

If XOP is somehow able to post another new daily high during this session or subsequent, most likely it would be time to exit our short position (via DUG, not advice, not a recommendation).

For now, the expectation’s for continued oscillation below today’s high … while XOP figures out if that’s all there is for the up-side.

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

Oil Sector Tests Reversal

Deep Test For XOP

XOP is either in a deep test at the Fibonacci 76.4%, retrace level (distance between black lines), or it’s getting ready to post new recovery highs.

Volume was moderate with no overt indication either way.

A higher open at the next session would most likely indicate trouble for a short position (not advice, not a recommendation).

However, one has to realize we’re at extremes in price and most likely sentiment as well.

Looking at the weekly gives a better perspective:

Positioning:

We’re keeping the finger close to the sell button (for inverse DUG) but are not convinced the short set-up has been invalidated (not advice, not a recommendation).

Price action’s at a confluence of trend lines and resistance. Some type of trend confusion is to be expected.

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

Peak Oil ?

Will Demand Collapse Faster Than Supply Contracts ?

Is There A Biotech Connection ?

The Next Chess Move

Everyone’s good at telling you what the problem is; it’s a financial collapse !!!

No, Duh!

The hard part is, how to position for the unknown at least for those of us in the serfdom.

The so-called elites, the oligarchs know (or think they know) exactly what’s happening.

They move their chess players and we move ours. The goal is to position for (potential) profit with the caveat we all make it out on the other side.

Personal Anecdote (skip to XOP Analysis if not interested):

I have a close family member that’s been a school teacher for about twenty years. He/She is well known in the local town and has a significant number of connections.

Because the children being taught are typically small, ranging from kindergarten to fourth grade, those kids tend to reveal all that’s happening at home.

Their revelations include financial status (or lack of), political leanings as well as abuse that’s happening physically and sexually. It’s the real deal.

As an aside, any potential crimes are fully documented and reported.

The point here is, this contact has revealed that children, family members and extended family members are severely ill or dropping dead after receiving an ‘injection’.

However, the surviving family members are just too stupid (or afraid) to put it together; the injections are causing the deaths.

It’s some kind of mental block and/or mass hypnosis.

It’s wrenching and heartbreaking.

However, at the same time and this is where it gets harsh, for those of us in the faith, we know Biblical scripture tells us the Lord delights in hiding the truth.

One has to diligently seek out truth. It takes work and a prayerful form of neural plasticity; the ability to be mentally flexible.

Truth is not for the lazy, the incompetent, the coward.

Why should immutable truth come to a coward or idiot that does not diligently seek it?

New ‘Variant’:

The rapidly increasing deaths may be passed off by the mainstream media as some kind of new ‘variant’.

That ‘variant’ brings us to the market at hand; oil and oil exploration XOP and possible biotech connection.

XOP Analysis:

As with biotech SPBIO, and its leveraged inverse fund LABD, so too we have Oil & Gas Exploration XOP, and leveraged inverse fund DUG.

The long term un-marked, weekly chart of XOP:

Next, we have price action contacting a multi-year trendline:

Moving closer on the weekly, we have a terminating wedge:

Terminating wedge(s) typically result in price action moving opposite of wedge formation.

In the case above, that would be a reversal to the downside.

This past week’s bar was a reversal. It’s a potential signal the formation is complete and XOP is ready for the downside.

Of course, if XOP is about to head lower, inverse DUG is about to head higher (not advice, not a recommendation).

Daily chart of DUG.

The Biotech (SPBIO) Connection:

The weekly chart of SPBIO, shows momentum on downward thrusts has slowed. The black dashed arrow’s trajectory is becoming more shallow:

If biotech is going to retrace, the solid blue line is a Fibonacci 38%, as well as potential location for an up-thrust (downside reversal).

A new variant (which is likely injection injury) may be used by the media to drive biotech higher to the retrace level.

We’ll have to wait and see if there’s a reduction of the population as we head into the end of the year. It’s a known fact, the injection destroys the immune system … so far, permanently.

That would be a factor in the up-coming flu season.

Remember that?

We used to have a regular flu season … but that all disappeared (re-branded, actually) with our current situation.

Summary:

Nearly all recessions have started with rising oil prices.

However, we’re not in a recession but an all out collapse. The economy is contracting at the fastest rate in U.S. history.

Our current position is demand will collapse faster than supply restriction (not advice, not a recommendation).

Or, we could still have rising oil prices but it won’t be enough to offset the cost of drilling and production; lack of demand may be overwhelming.

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

Biotech: Technical Force

2:46 p.m., EST

LABD, Force Index Divergence

Sentiment, Volume, Price

Sentiment can’t be seen on the chart. One can guess but it can’t be measured directly.

Sentiment change comes first.

That change in turn, results in a change of volume, i.e. ‘commitment’.

Then, after commitment dissipates, price is next.

That looks like the current situation with biotech and specifically inverse fund, LABD.

In what may be an idiot or genius move (depending on outcome), the short in biotech SPBIO (via LABD) has been maintained throughout the current down thrust; not advice, not a recommendation.

The reasons for that decision have as many layers as the proverbial onion. Not the least of which, is a market break anywhere from 20% to 50% (in our view) can happen at any moment.

‘Never happened before’, one might say.

Oil futures in their entire history have never gone negative before, either.

Bonds, in their entire history have never been shorted by four-standard deviations before, either.

A world-wide coordinated push to euthanize the entire population has never happened before, either.

Margin debt and valuations have never been higher before, either.

Underlying liquidity has never before been removed to the current extent, either.

So, we each have our own reasons.

The firm’s main account (not the Project Stimulus account) has drawn down about – 13%, on the current short position.

A core position has been maintained but small amounts have been removed and added based on price action.

When the anticipated gain, is high hundreds of percent and maybe above 1,000%, the draw down above, looks acceptable considering the (potential) opportunity.

On to the chart:

The daily chart of LABD, shows both net downward price action and thrust energy are dissipating.

Note the ‘Force Index’ scale has been accentuated to better show the divergence.

We’re looking for price to move back higher to test support/resistance areas.

If or when it does, the plan (as has been from the beginning) is to continue to add LABD until volatility makes it prohibitive.

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.

Oil & Gas: Flaring Off?

9:47 a.m., EST

Wyckoff Up-Thrust, Reversal

Terminating Wedge

Upward Test

Oil & Gas Sector XOP, is posting an up-thrust, reversal condition in the weekly (above).

XOP is also in a terminating wedge:

Last Thursday and Friday were heavy volume days with Thursday posting a wide price bar (daily chart below):

We know that wide, high-volume bars, tend to get tested. XOP may attempt to post higher today or this week.

Doing so, narrows the range (to the highs) and reduces the risk for going short (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.