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.
Summarizing trading actions for the week and the action plan, going forward.
Open Positions:
Currently there are two open positions: details below.
TDA-YANG-22-01
Short the Chinese FXI via YANG (not advice, not a recommendation)
Enter YANG @ 10.95, with current stop @ 10.89
Friday’s close @ 14.05, Open profit = 28.3%
FXI, 3X Leveraged Inverse, YANG, Daily
Shown above, YANG appears to be in a trading channel (grey lines).
As a result of moving decisively higher (FXI, lower), the stop on the position is to be moved to YANG 12.79 (not advice, not a recommendation) at the next trading session.
LABD-22-05
Short the biotech SPBIO via LABD (not advice, not a recommendation)
Multi-entry LABD @ 28.11 (combined), with current stop @ 26.57
Friday’s close @ 26.98, Open loss = – 4.02%
SPBIO, 3X Leveraged Inverse, LABD, Daily
Last week contained both record daily volume (since inception) for LABD, as well as record weekly volume.
Downward thrust energy has dissipated. The down-move appears to be exhausted.
Supporting the assessment LABD is at or near a pivot point (reverse higher), we’re going to review the 3-Day chart.
SPBIO, 3X Leveraged Inverse LABD, 3-Day
Note, there is one more trading session (this Monday) needed to complete the current ‘3-Day’ bar.
First, we can see downward thrust dissipating as on the daily chart.
The prior three-day bar is identified as ‘Ease of Movement’.
It’s the first bar in the entire down-sequence starting on 6/14, where upside action was able to penetrate the prior (3-Day) bar’s high.
That’s an indication of demand.
After upside penetration, price continued lower.
However, here’s the important part, LABD, closed higher and posted a higher low when compared to the prior 3-Day bar; subtle clues a reversal may be in the works.
There’s one more trading session needed to complete the current 3-Day bar and anything can happen.
However, based on the analysis thus far, it’s reasonable to expect LABD, to continue to post higher; that we’ve reached the extreme of downside action.
The 3-Day below shows the higher lows and includes a zoom of the area.
Adding to the reversal case, on a weekly close basis, SPBIO reached underside resistance during the week of 7/8. This week just past, it closed slightly lower (chart not shown).
Summary
It’s the weekend and so we have the usual suspects of bad news … any of which could be the butterfly in the amazon, the final upset for the markets.
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 last report on China, FXI, stated we’re in a Wyckoff set-up that was about to be tested.
More specifically, it said the leveraged inverse fund YANG, was in ‘spring’ position; ‘spring’ is opposite of up-thrust, because we’re looking at shorting the FXI, via inverse fund YANG.
Back then, two charts were provided with the most probable outcome of the set-up. One showed a ‘pass’ of the test and one showed ‘fail’.
Well, it’s obvious now; pass it is.
The original hourly chart is repeated below with the current chart (ninety minutes into the session) following.
Leveraged FXI Inverse YANG, Hourly
Prior to the ‘test’.
And now … ninety minutes into the session:
Back in the day, over a century ago, Wyckoff wrote that ‘somebody always knows something’ and that ‘something’ shows up on the tape.
What we in the Proletariat didn’t know last week, was this week, would bring us this report from ZeroHedge.
The important part is that Wyckoff analysis allowed one to see what was happening (on the tape) and position ahead of time (not advice, not a recommendation).
“Risk on a position short FXI via YANG (not advice, not a recommendation) can be reduced by allowing YANG price action to retrace as much of the opening gap as possible.”
That’s exactly what was done with an entry made near the lows of the day.
For the haters (if any), here’s a reproduction of the entry exactly as it appears in the trade account:
Check for yourself if you like, that YANG was at 10.95, right around 10:51, a.m. EST.
The low of the day occurred several minutes later at YANG 10.90. The stop is set just below that low @ 10.89 (not advice, not a recommendation).
The trade’s identified as TDA-YANG-22-01. The ‘TDA’ references that a separate account (TDA Ameritrade) is being used for this position.
Hopefully, that’s enough ‘transparency’ and we can move on.
The Wyckoff Edge
Properly done (without being skewed by personal bias), there’s nothing else needed other than Wyckoff analysis.
It’s important of course, to understand the context of our (global) environment such as ‘everything’s going according to plan’ but allowing the mainstream to influence the analysis, other than providing a contrarian view, is an absolute waste of time.
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® 