Weekly, Wrap-Up

The Usual Suspects

No. 1

Carvana Fires 2,500 Employees

We didn’t see that one coming. Or, did we?

Just a quick review of this report posted over six-months ago:

“If your biggest claim to fame is that you ‘invented’ a vending machine … you’ve got real problems.”

“As the economy (if you can call it that) falls off the cliff, one of these two (CMX, CVNA), is not likely to survive.”

Well, looks like we have the answer on that one.

From the date of the report above to last Friday’s close, CVNA, is down -87.8%.

Measured from all-time highs, CVNA, is down -91.1%.

As CVNA, swirls down the drain of ‘disruption’, looks like it was only a blip in the land of ‘status quo’.

No. 2

The ProLogis ‘Connection’

Is this a re-print of a prior report?

No, the update below, is essentially a confirmation of the analysis in that (above) report.

Turns out that Amazon (link here) is in negotiations with chief cook and warehouse bottle-washer, ProLogis (here) about terminating massive amounts of lease space.

The entire affair, is an irrefutable confirmation of the Wyckoff analysis method.

That is, ‘the market itself defines it’s next likely course’.

Those on the inside always know something; that ‘something’ (i.e., their actions) shows up on the tape.

After the initial ‘ProLogis Connection’, a follow-up was posted that identified the largest down-thrust energy in ProLogis history.

From that report was this quote:

“We’re using PLD, as the proxy for the real estate (IYR) sector as it’s the largest cap equity.”

“That’s true for now … but maybe not for long.”

How quickly things change.

ProLogis is now the number two in the IYR market cap and very close to being third.

No. 3

Wealth Confiscation Coming Soon

The first two bullets perceived events before they happened, so let’s make it three-in-a-row.

This one’s pretty much a no-brainer.

During the last meltdown in 2007 – 2009, IRA retirement accounts came within a hairs-width of being confiscated.

This time around, could be for sure.

The following’s a section of a report written years ago.

It’s even more relevant now.

Begin Report

4/7/19

Government To Confiscate IRAs?  It’s Easy

There has been enough time for the American working (and saving) public to take the lessons of the 2007- 2009 meltdown and act accordingly.

One of those lessons would have been to realize, just how close they came to having their IRAs confiscated.

Personally, I’m surprised that any of the following links below are still active.  Well, who’s looking at this stuff anyway?  Certainly, not the general public:

Dems Target

Fact Check

Congress considering

Government to Confiscate (no longer active)

Confiscation of Private Retirement

Even in the Wall St. Journal:  Targeting your 401K

After reading several of these reports in 2009 and later, it did not take long for me to set the plan in motion to cash out … completely.  I took the 10% penalty, while it’s still 10% and liquidated my accounts.

The rest of the population?  Not so much.

I think it was Prechter who laid out just how easy it is for the government to seize IRA accounts.  It’s basically a two step process.

Step 1.  The market drops 50% to 70%.  Remember, the drop from 2007 to the bottom in 2009 was 58%.

Step 2.  Declare a state of emergency (executive order) for the working population and move in to “save” the IRA accounts from more devastation.  The result would involve a stiff withdrawal penalty (say 50%) and to “protect” the accounts from further losses, IRAs can only invest in U.S. Treasuries or Bonds.

It’s that easy. 

As stated previously, wealth does not necessarily mean gold and silver.  That too can (and has been in the past) be confiscated.

In fact, I and my firm are already operating as if the next crisis is in full swing and asset confiscation is the norm.  That way, we don’t have to come up to speed quickly in what may be an extreme stress situation. 

End Report

One could propose that (IRA) legislation is already written.

Just like the CARES Act was already written and submitted to committee in January of 2019, nine months before there was any kind of outbreak.

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

Last Time … is not … This Time

The Rule of Alternation

That’s it in a nutshell. What happened last time, won’t happen this time.

The market reveals its own secrets; you just have to know where to look.

An entire industry has been (purposely) built to make sure the ‘average investor’ never finds the truth of the markets.

That industry is the financial analysis industry; the one with the P/E ratios, Debt-to-Equity, and so on.

Sure, it was a tongue-in-cheek post to use the fact that Carvana had no P/E (linked here).

I’m not certain if they ever had a P/E; probably not.

However, that financial, i.e., fundamental(s) fact, did not keep the stock from going up over 4,529%, in four years.

It should be noted, the Carvana analysis was done on a Saturday (as has this one). At the very next trading session, CVNA posted lower, started its decline in earnest and never looked back.

Not saying that exact thing (timing it to the day) will happen with our next candidate real estate; as said before, part of Wyckoff analysis (a lot of it, actually) is straight-up intuition.

The good part from a computer manipulated and controlled market perspective, intuition can’t be quantified.

So, that’s your edge.

Let’s move on to ‘last time is not this time’ and see what the real estate market IYR, is telling us.

Weekly Chart, IYR

We’ve got the weekly un-marked chart of IYR, below.

The ‘alternation’ is there.

Here it is, close-up.

The first leg lower had some initial smoothness but quickly became choppy and overlapping.

Not so, now.

We’re essentially heading straight down.

Fundamentals

From a fundamental standpoint, real estate is finished. However, it’s been finished for a long time.

The fundamentals won’t and can’t tell anyone what’s likely to happen at the next trading session … or any other session.

The market itself (shown above) is saying the probabilities are for a continued decline; posting smooth long bars until some meaningful demand is encountered.

As shown on the last post, if the trading channel is in-effect, that (chart) demand is a long way down.

Positioning

Shorting IYR via DRV, has been covered in previous posts (search for DRV-22-02).

The following weekly chart, is marked up with two arrows.

Arrow No. 1

Initial short position via DRV was opened late in the day on April 28th; the day before the market broke significantly lower (not advice, not a recommendation).

Arrow No. 2

As the market headed lower during the week just ended, the size of the DRV position was increased by 36%.

Currently, the gain on the total position is about +22%.

At this juncture, the DRV stop is located well in the green in the unlikely event we get a sharp IYR, upward move in the coming week.

Summary

Under ‘normal’ conditions one could expect some kind of upward bounce in the days ahead.

However, as shown already with big cap leader PLD, the situation’s anything but normal.

Highlighted in earlier posts, biotech is leading the way with SPBIO, currently down – 59.8%, from its highs.

Biotech IBB, with chief cook and (globalist) bottle washer Moderna (MRNA), is down – 36.2%.

As Dan from i-Allegedly has stated time and again, we’re already in a depression.

So, buckle your seatbelt Dorothy …

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

A Day To Remember

Was Today The Inflection Point?

There were so many comments on the ZeroHedge article (linked here) about the musings of a 78-year-old money manager (effectively saying he’s an idiot … a dolt), we’re going to use those comments for reference on a go-forward basis.

Everybody has an opinion but nobody’s actually looking at what the market is saying about itself.

That’s where the answers will be found … no matter one’s personal bias.

Looking at real estate IYR, we see that price attempted to get above the axis line shown but did not make it.

Before we go further, a correction: The last post said the stop on DRV-22-02 was located at DRV 32.71.

The stop is actually located at DRV 37.21. Numbers got swapped.

Real Estate IYR, Daily

It’s interesting to note, ProLogis (PLD), the largest cap in the sector did not close higher for the session.

If IYR, with other indices do not have a decisive follow-through (stopping out DRV-22-02, in the process) at tomorrow’s session, the Ponzi scheme’s in serious trouble.

As already stated, events may happen faster than anyone expects.

Summary

We’ll leave off with this just out from ice-age-farmer; linked here.

The collapse of the entire food supply has been building (sorry, in the planning stages) for years.

It’s intentional.

Does anyone think that ‘raising rates into weakness’ is not also intentional?

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

The ProLogis … ‘Push’

Shoved Off The Cliff

“Push” may not be the right word.

For ProLogis, it’s possibly the single largest downward thrust ever.

We’re using PLD, as the proxy for the real estate (IYR) sector as it’s the largest cap equity.

That’s true for now … but maybe not for long.

ProLogis PLD, Daily Chart

From the data available, it’s the largest single-day, down-thrust energy, going all the way back to May of 2016.

The daily close, shows a terminating wedge is in-effect.

So far, PLD is down about – 12.3%, from all-time highs and looks to be heading for the lower (wedge) trend-line.

PLD Behavior During a Market Rout

It’s straightforward.

Using 2008 – 2009, timeframe as the proxy, PLD was vaporized; straight down for two-months.

Hanging By A Thread

Getting in close to the action, we have the 4-Hour chart below.

It’s currently about 1:30 p.m., Eastern.

The first half of today’s session attempted to retrace the down-move. It did not even make it to the 23.6% level.

The low of that 4-Hour bar is marked … 151.85.

If the current 4-Hour bar penetrates 151.85, without moving higher, it may show PLD as ready to continue lower to the bottom wedge trendline.

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

The ProLogis ‘Connection’

Largest Cap, In The IYR

The French Connection

As with Newmont Mining in the Senor Miners Index GDX, ProLogis is the largest market cap in the Real Estate Index, IYR.

When markets ‘thin-out’, when they reach the end of a long sustained bull move, capital exits the lower caps, the lesser performers, and is thrown into the last man standing; the largest cap(s) in the sector.

In can be argued, that’s where we are now with IYR.

Friday’s Wipe-Out

As expected, because of the near thousand point drop in the Dow, YouTube’s abuzz with everyone attempting to figure out what’s going to happen this coming Monday.

The Maverick does an excellent job (linked here) of posing the question, ‘Where are we’?

He doesn’t even bother with are we in a market collapse; that’s pretty much a no-brainer. It’s the ‘where’ in the collapse, that’s the question.

Real Estate … What’s Next?

From this site’s perspective, we’ll let the market itself tell us what’s likely to happen next.

Since the focus over the past week has been real estate (IYR), let’s look at the largest cap ProLogis PLD, to get clues on the next potential action.

ProLogis PLD, Weekly Chart

First, we’ll look at the big picture.

PLD was vaporized in the last market collapse.

We should also note, it took about 12-years to get back to pre-crash levels; good ‘ol ‘buy and hold’ 🙂

Of course, a multi-year covered call strategy could have been implemented if maintaining long. With that approach, PLD could have potentially become a cash-cow.

Crash Clues

Note on the chart above, PLD didn’t just up and crash; it gave clues well beforehand.

We’ll go into those clues in a later update.

For now, let’s look at next week’s probable action.

ProLogis PLD, Daily Chart

First, the un-marked chart to show where action finished up on Friday.

Next, we see an upthrust, test and sharp reversal.

Price action finished at support and just below the lows set on Monday, the 18th and Monday the 25th.

Wide, high-volume bars tend to get tested.

So, we’re below the lows with a wide high-volume bar. That puts PLD, in spring position.

Summary

Because PLD and IYR (and the rest of the indices) finished at or near their lows, there may be some downside follow-through this coming Monday.

Price action’s the final arbiter but there’s potential for some kind of upside test in the coming week(s).

As a courtesy, the DRV chart below shows the entry location for DRV-22-02 (not advice, not a recommendation) and the current stop.

Note how liquidity has picked up over the last two weeks.

Friday’s volume of 309,800 shares, was the largest ever for the inverse fund.

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