In Brief
At this point in time, the main components for biotech IBB, are listed here.
Note that ‘chief cook and bottle washer’ Moderna, is No. 5, on that list.
IBB’s closing price action shows a repeating set-up.
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The Danger Point®, trade mark: No. 6,505,279
Reversal?
We have a Fibonacci sequence and a repeating pattern (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Raschke, Weis and Wyckoff
The late David Weis once said he kept a copy of Wyckoff’s autobiography in his office, near him.
He made notes on it and marked it up so many times, the cover had fallen off.
His website (now deactivated) had a picture of him holding an original first edition Wyckoff ‘Studies In Tape Reading‘.
The last time I checked, that edition (if you could find one) in good condition, went for around $3,500.
All of this, ties-in with a recent interview of master trader, Linda Raschke, link here.
Wyckoff is specifically mentioned at time stamp: 10:52
In fact, just a few seconds later, we have a discussion on ‘springs’ and ‘up-thrusts’. 🙂
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The Danger Point®, trade mark: No. 6,505,279
The Sector Has Reversed
We’ve all heard it before.
High oil prices tend to precipitate out recessions, or maybe a depression in our case (not advice, not a recommendation).
When looking at XOP, a proxy for the Oil & Gas sector, it appears to be front-running a decline in oil prices.
Or, possibly a decline in demand.
There’s also a familiar repeating pattern.
Oil & Gas Exploration XOP, Weekly
Once nuance to note:
Continued hostilities in the Middle East, along with oil tankers being sunk, do not seem to be materially affecting the (already high) price of oil.
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The Danger Point®, trade mark: No. 6,505,279
New, All-Time Highs?
If gold miners, GDX, GDXJ, make it to new all-time highs, what happens then?
The chart below, shows we’re already at a resistance area. If there’s a reversal from here, then, what then?
What about the usual suspects out with prognostications of $50,000/oz. gold?
Then, there’s the food supply connection to precious metals.
Now, on to the chart.
Junior Miners GDXJ, Daily
Not shown on the chart, is the most recent low in mid-July, forming a ‘spring’ set-up.
If GDXJ pushes to new all-time highs, then we have the ‘up-thrust’ part of the set-up (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Potential Set-Up
Over the weekend, Greg Hunter released his latest interview with Ed Dowd, link here.
ZeroHedge subsequently picked up that feed, link here.
As is typical with ZeroHedge, the comments are a veritable gold-mine. In the like above, they don’t disappoint.
With XBI, we have our repeating pattern, link here.
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The Danger Point®, trade mark: No. 6,505,279
The (short) Path
With today’s new daily high, Carvana’s following a Fibonacci sequence, thus far.
Referencing the chart below, we have:
Day 1: Wyckoff up-thrust, penetrating resistance (blue line).
Day 3: Lows, increased volume; ‘sign-of-supply’.
Day 5: Recovery high, testing the underside.
It’s at this point, anything can happen.
For most of today’s session, CVNA remained below the highs, giving doubt to the prior analysis.
It wasn’t until the last ten-minutes of trade, did price action move above yesterday’s high of 71.18.
Carvana CVNA, Daily
As CVNA pushed above that high, a short was opened: CVNA-26-04, with the stop just above today’s high (not advice, not a recommendation).
If Carvana manages to push higher, the scenario discussed yesterday, the next resistance level may be more probable.
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The Danger Point®, trade mark: No. 6,505,279
Fibonacci, Day 5
Tomorrow is Fibonacci Day 5 for Carvana from the most recent up-thrust high.
The low (yesterday), was Fibonacci Day 3.
With that, we have two schools of thought.
Lower interest rates may (help) boost CVNA to the upper resistance boundary (dashed blue line), penetrating, creating a larger up-thrust condition.
Or tomorrow, is the test of the breakdown (then lower).
If that’s the case, it does not matter how low rates go, the economy is in a swan dive (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Daily & Weekly
The daily chart of IBB (left), and the weekly, are both posting bearish divergences.
Caveat: Strictly speaking, on the weekly chart, the MACD has yet to tick lower.
However, if next week’s action holds steady or posts lower, we’ll likely get that signal as well (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
The Resistance Wall
It’s either good or bad, depending on one’s perspective.
Since, at this juncture, we’re looking primarily for short-side opportunities, it’s a good thing.
Upside risk is being reduced (not advice, not a recommendation).
The chart below, shows a familiar pattern emerging.
Microsoft MSFT, Daily
Price action from the recent lows is loosely following a Fibonacci sequence.
If that correlation holds, the next count is Day 34, August 12th, a Wednesday, release of CPI as the main event (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
