Dominoes … Begin To Fall

Juggernaut Set In Motion


This just out from Activist Post, shows we’re in yet another ‘never before seen’ event.

One of the references in the article can be found at this link.

Many times on this site, the ‘reduction in size’ has been discussed.

Now, the official numbers are starting to show-up. The bottom line? Retail demand is going to evaporate.

As a side note, it’s interesting that YouTube now has videos on how to spot Myocarditis …. something we’ve (in the serfdom) have never heard of … until now.

While everyone seems to be focused on the overall markets, S&P, Dow, and QQQ, underneath the radar, gold and the miners continue to rachet themselves lower.

Senior Miners, GDX & Inverse DUST

The 2-Hour chart of inverse fund DUST shows we’re still at the danger point discussed yesterday.

The zoom chart (below) has an interesting distinction.

The distance between the blue-line trading range and the magenta-line trading range, is the same. The black-dashed arrow is equal length.

This implies that yesterday’s move, along with today’s may be an ‘a-b-c’ correction. A counter-trend move.

If so, the main direction has changed from down to up (for DUST).

Summary:

Still at the danger point, we remain short this sector (not advice, not a recommendation).

The good part, if price action reverses in DUST and begins to pressure the most recent lows, it’s an indication something else is afoot and the trade is failing.

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

Gold’s ‘Last Chance Saloon’

If This Move Fails, It’s Over

Gold bulls are doing everything they can to re-establish the up-trend.

This morning’s action was a deep upward test of miners GDX, and not as deep for gold itself (GLD).

The bulls were able to open higher in both GLD and GDX; then driving action upward into an early morning test.

At this juncture (mid-session) that test is wavering.

We’re going to inverse fund DUST, on the 2-Hour basis to show the fight that’s taking place.

GDX Leveraged Inverse DUST:

Un-marked 2-Hour chart

Adding the notes.

With Zoom.

As this update is being posted, it’s still unknown which direction DUST is headed; currently trading at DUST 19.35.

Summary:

We’re at the danger point where action can go either way.

If the gold bulls can’t hold and DUST makes a new daily high (GDX, new low), we have a decent confirmation, we’re at the end of ‘the first correction.’

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

Gold Bulls … What Happened ?

Last Week, It All Looked So Good

Dazed and confused has got to be the current state of the gold bulls.

Just when things look like they’re getting underway to the upside, there’s another whack lower.

This morning’s action was no exception.

Before anyone starts screaming “manipulation”, the potential for this reversal (i.e., ‘the first correction’) has been discussed on this site for weeks.

Just yesterday was this:

However, the most likely outcome at this point, is the market pivots straightaway or hesitates for several days; just long enough for both sides (bulls/bears) to start scratching their heads.

Well, “straightaway”, it is.

Yesterday’s update, also ended with this:

“Next up, scheduled for tomorrow and depending on price action, we’ll discuss how the upward retrace in GLD, may actually be a test of the mid-November up-thrust“.

And a test it is … bringing us to the chart at hand, GLD

Gold, (GLD) Daily Chart

The un-marked chart.

We’re going to keep the chart ‘as-is’ this time and not invert.

Mark-ups are added showing the extent of the set-up; that last Friday, including Sunday’s overnight futures, were a test of the up-thrust:

It’s A Big Move

We’re looking at price action that took over four months to create a set-up (mid-November up-thrust).

Then, price action posted for nearly two weeks within the set-up before collapsing on November 22nd, last year.

Remember there was absolutely insane gold bull hysteria during that time … a very important nuance.

Now, we’ve got what looks to be nearly six weeks of testing that culminated last Friday (and Sunday, overnight).

If that weren’t enough, over those six weeks, the Senior Miners, GDX, has thinned-out. Thinning-out typically occurs at the very last stages of a directional move.

Summary:

As stated yesterday, if we got a downside pivot in GDX (DUST moving higher), the market may allow an opportunity to re-establish the original position size … maybe more.

At this juncture (mid-session), it’s doing just that.

Early this session, the DUST position was increased by about 3.2% (not advice, not a recommendation).

Channels & Trendlines:

Scheduled for tomorrow, is a discussion on what to expect on a go forward basis.

Will action confirm a potential right-side trend or begin to move deeper into the trading channel identified in a previous post.

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

Fibonacci Fingerprint

Senior Miners GDX

With mixed signals, confusion in the economy and markets, one has to wonder if anybody’s noticed the Fibonacci sequence in Senior Miners, GDX?

As soon as such things get ‘figured out’, time correlations diffuse and evaporate; just long enough to throw off attention and re-emerge at some distant date.

However, as yesterday’s update inferred, along with a compelling trading channel, it begs the question; is this juggernaut so big that even if it’s ‘discovered’, it won’t make a difference?

Of course, the market itself is the final arbiter.

However, the coming week may prove to be interesting. If the time correlation remains intact, expectations (shown below) are for GDX to pivot lower early in the week.

Senior Miners: GDX

We’ll start with the un-market daily chart of GDX and then invert (to approximate DUST) for the subsequent analysis.

Now, inverted

The first Fibonacci sequence, ‘Day 1 – Day 34’, defines the channel width (shown in this update) and the subsequent retrace to the December 15th, apex/reversal; Day 55.

The next chart shows that embedded within the sequence above, is another sequence; from the November 16th low, (inverted chart) to the same December 15th, top.

Putting both together, we have the following.

However, that’s not all.

The time to retrace from December 15th to Friday’s close is/was 12-days … just one day short of a Fibonacci 13.

Is the market going to ‘blip’ this Monday, print a new low (on the inverted) just to make it absolutely perfect or is the whole set-up going to fall apart?

Either one can happen.

However, the most likely outcome at this point, is the market pivots straightaway or hesitates for several days; just long enough for both sides (bulls/bears) to start scratching their heads.

Summary

We’re still short this sector, identified as trade number DUST-21-01, (not advice not a recommendation) but the actual position size has been reduced.

‘Reduced’ is not the same as ‘closed’.

The reduction in size, which was about 8.8%, of the total position, was entirely the result of maintaining margin requirements.

If the trade falls apart, obviously the correct action would be to close.

However, if GDX pivots to the downside (as expected), there may be a window of time allowing position size to be increased back to the original or more if the market allows (not advice, not a recommendation).

Gold (GLD): Testing The Up-Thrust

Next up, scheduled for tomorrow and depending on price action, we’ll discuss how the upward retrace in GLD, may actually be a test of the mid-November up-thrust.

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


And Then, There Was One …

Newmont Pushes To Extreme

When a profitable position begins to erode, the questions begin.

Is it just a correction or a full-blown reversal; how do you know?

Of course, nothing is ever known for absolute sure.

However, in the case of the current trade DUST-21-01, which is a short position on GDX (not advice not a recommendation), the market’s exhibiting what looks like terminal (reversal) behavior.

Of all the thirty-one equities in the Senior Miners GDX, only one is above its mid-November highs: Newmont Mining.

Newmont, NEM

With Newmont getting all the attention, the view is the entire market is ‘thinning-out’.

In addition, price action in Newmont tends to suggest it’s exhibiting terminal behavior.

Daily chart below.

It looks like NEM has just ‘thrown-over’ its wedge pattern. Typically, the last gasp before reversal.

Zooming-in

Summary

With markets reaching new all-time highs yet again, the gold miners are showing they’re not invited to the party.

From a Wyckoff standpoint and for bear markets, the focus is on the laggards … not the ones at the top (not advice, not a recommendation).

Unless the dynamic of GDX changes, and others in the index push past their mid-November highs, this market continues to look ready for reversal.

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

Gold Bulls … Whacked Again !

Hit During The Early Hours

It was a nasty mess for the gold bulls during the futures, pre-market session.

As price action pushed upward past the (GCG22) 1,820 area, volume increased significantly.

Good or bad, it means something’s about to happen.

Happen, it did.

Price action was only above 1,820 for about fifteen-minutes; then eroded back into the range.

In total, GCG22, dropped 12-points in just 25-minutes, going well below the established trading range.

If we look at the un-marked daily chart of gold (GLD), it does not look like much is happening.

Gold (GLD), Daily

Marking it up, gives a better perspective.

Now, it does not look so good for the bulls.

The chart below, zooms-in

While all this is going on in the gold market, the GDX miners (below) are posting their own (potential) reversal.

It’s potential at this point as we’re about mid-session.

Trade Model Review

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

** To verify the completion, we’ll need a daily reversal (today) as well as a new daily GDX low in the following session(s); not advice, not a recommendation.

Summary:

From the trade model, the ‘first correction’ may be completing during this session.

If that’s the case and gold bulls are trapped yet again, this time around, price action’s not likely to be so tenuous.

The bears may be ready to ‘slice and dice’. 🙂

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

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

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

Gold Natives … Getting Restless

Latest Reversal … Exposes The ‘Experts’

When the tide goes out, that’s when you find out who’s been swimming naked.’

No fan, and no endorsement of Buffett but the quote is applicable.

If yesterday’s Newmont analysis holds, meaning, it’s the last stand before another leg-lower, gold bulls might start acting irrationally.

Is it even possible to be more irrational?

Remember their manic prediction of $3,000/oz, gold in months, not years?

Barring a major reversal, the tide’s going out.

From the comments section of this ZeroHedge article, some in the herd are figuring it out as well.

As one of them says … ‘another year to wait before the Great Pumpkin’ (i.e., gold moving higher).

As this post is created, comments continue to pour-in.

Gold bulls are frustrated, confused, pontificating, crypto loving/hating, central bank blaming, it’s all there.

Thus far, there’s not one comment on what price action is actually doing.

Public Service Announcement

This whole business with the financial media and its attendant hucksters (recent examples, here and here) is actually a fantastic public service.

For anyone who’s still able to think (an act of rebellion in itself), it’s clear, or should be, if you’re on TV, or the mainstream media, you’re a shill until proven otherwise.

The good part?

All of this media, podcast, carpetbagging and corruption, plays right into the hand of Wyckoff analysis.

Wyckoff focused on what is … not what should be.

Even back in the early 1930s, he was adamant about ignoring the financial press. ‘You’ll never be successful’, he said if you listen to the hype.

Mixed Messages

On cue to support that statement, is Dan, from i-Allegedly; he reports ‘we’re getting mixed messages‘ in the economy.

Proving the point.

The (Trade) Plan Forward

With the caveat, anything can happen; gold could rally in a couple hours when the futures open, the short via DUST (not advice, not a recommendation), is as follows:

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

What’s In A Name ?

Even if the trade fails at the next session, it would still provide valuable information.

With that in mind, no matter what happens it’s likely to be referenced in the future; so, it needs a name (or number).

Taking a cue from prior engineering work (creating numbering schemes), the current trade will be identified now, and in future posts, as: DUST-21-01.

Seems straightforward.

The ‘First’ Correction

No. 3, above is titled ‘The first correction’.

This labeling is borrowed from a trade discussed by William Doane, in Dr. Elder’s book: Entries & Exits.

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

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

Newmont Holds The Key

‘Last Man Standing’

Founded by William Boyce Thompson in 1916, Newmont (NEM) was around over a century ago during Livermore and Wyckoff’s day.

Thompson is center in the photo with President, Warren G. Harding at left.

Wyckoff and Thompson were interconnected.

In Wyckoff’s autobiography, he writes about working for Thompson’s firm (Thompson, Towle & Co.) in 1910.

During that time, he describes no fewer than two stock ‘manipulation’ schemes; one by renowned James R. Keene and the other by Thompson himself during a deal-gone-bad with the Guggenheims.

Also in 1910, Wyckoff published his seminal work: Studies In Tape Reading. If there’s any one book to read concerning how markets work, ‘Studies ..’ is that book.

Wyckoff had first-hand exposure into market operations by the wealthy and super wealthy. More importantly, he saw how those transactions showed themselves on the tape.

Last check, a first edition ‘Studies’ went for around $3,500. A quick search as of this post, turns up nothing currently available.

For those who complain ‘it’s rigged’, to that we can say, ‘it’s always been rigged’.

Determine what those ‘rigging’, are trying to accomplish and you may have a trade.

Now, to the market at hand: Newmont Mining.

It’s the key; the largest cap equity in the Senior Mining Index (GDX).

Newmont, NEM

The daily chart:

For those who have been with this site for a while, you may instantly see the set-up: Spring to Up-Thrust.

The marked-up chart makes it clear.

Moving in a little closer for additional clues:

We can see from the volume itself, there were a huge number of transactions this past Friday.

NEM penetrated long established resistance.

In so doing, it set off a massive number of orders: Buy orders, sell orders, sell-short.

Senior Mining Index: GDX

The other part of the story and the one that weights it to the bears:

While NEM, is at multi-month highs, senior miners GDX, is nowhere near its highs.

Daily chart, GDX:

What does that mean?

It means the market is ‘thinning-out’

The professionals and maybe some investors alike, are abandoning the non-performing lesser cap equities; pouring funds into the last man standing NEM, in hopes that it will keep moving higher.

It’s desperation and signals market weakness.

As always, anything can happen and bulls may somehow take control.

However, from the charts themselves, hyper-stretched major indices coupled with insiders bailing out the most in history, uneducated ‘retail’ willingly stepping up to hold the bag, it does not look good for any bulls … gold or otherwise.

Summary:

We could find ourselves in a situation similar to the oil market in mid-2014 where it spontaneously deflated for eighteen months … nary a blip higher all the way down.

With that, we’re maintaining short via DUST (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

Gold … Before The Open

Is Today The Day ?

Is today the day we find out who’s really in control?

The day where it’s either inflation or deflation?

It’s about 30-minutes before the open.

Pre-market action has gold (GLD), right at the Fibonacci 50% retrace level shown in the 4-Hour chart.

Gold (GLD) 4-Hour

Looking at the chart we see the following:

The up-thrust from November, was an island gap reversal (bearish).

During the Fed announcement (Wednesday, the 15th), price action penetrated weekly lows and set up a spring condition (bullish).

We’re at Fibonacci Day 3, of the spring and current trading at 50% retrace in the pre-market (neutral).

Pre-market trading is at an axis line which also indicated prior resistance on November 30th (bearish).

If price action opens or trades at the 50% level, it would also up-thrust the November 30th print high; therefore, creating a potential reversal condition (bearish).

Summary:

There’s a lot going on in the gold market.

The ‘man on the street’ YouTubers are screaming inflation and the need to “exit the system”.

That’s a great idea (exit). Just exactly how does that work anyway? A topic for another time.

Meanwhile, here we are.

We’re doing what price action’s telling us to do. That is, stay short until proven wrong (not advice, not a recommendation).

That proof, for bulls or bears could come today.

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