Real Estate (IYR) To New Highs ?

If The Bond Market Reverses

The previous bearish analysis was overwhelmed by the larger, upward trend.

Instead of continuing lower, real estate IYR, moved higher. It’s now at another inflection point.

The position in DRV (DRV-22-01) was exited at 32.66, when it was obvious the trade was going to fail.

Taking a hit like that gets one’s attention; there must be something else going on … something on a larger timeframe.

There’s nothing wrong, with being wrong.

However, there is something wrong with being wrong and staying wrong.

If we pull farther out to the longer, weekly timeframe, it looks like there’s danger ahead; possible new all-time highs and Wyckoff upthrust (potential reversal).

Real Estate IYR, Weekly

As with the Junior Miners, GDXJ, it looks like we have yet another Fibonacci time correlation.

During the financial crisis, IYR, posted its low the week of March 6th, 2009.

Thirteen years later, another major inflection point?

Shown below, is a terminating wedge that may have already completed a throw-over.

One probability suggesting new highs instead of a reversal at this point (which seems like even odds) is the repeating tendency of markets to go from ‘spring to upthrust‘.

This site has presented over and again, it’s a common market behavior.

Getting closer-in on the weekly, the spring set-up is identified.

Now, comes the Fibonacci time correlation.

From the all-time highs, the market closed at the lows on Week 8. The print low came one week later.

Using that information and projecting forward, if this correlation is in effect, if it’s valid, we can expect an up-thrust high somewhere during the week of May 20th, to May 27th.

The Bond Connection

The economy is collapsing. The food supply is being destroyed. The consumer is tapped out and using credit to survive.

What on earth could be a catalyst to move real estate, the most illiquid market of all, to new highs?

Bring in the clowns … sorry, the financial press.

Word on the street is the bond market, may be in position to reverse higher.

No doubt, there’s a good technical reason for reversal, linked here.

It’s the financial press and their real estate narrative that will (may) be preposterous.

That is: If bonds (TLT) move higher, mortgage rates will come down, consumers will jump on the opportunity and therefore, she’s a witch !!!

Summary

We’ll see if IYR meets the price and Fibonacci time correlations for potential reversal.

Once there’s a reversal in this market, it tends to do so with a vengeance.

Rising rates have already cut off deals in the works. Prices are coming down and houses are on the market longer. The consumer is priced out.

The pig is already in the python … once that happens, this market sets up a dynamic of its own, a succession of lower prices and sales collapsing.

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

Bonds Down … Real Estate, Next ?

Visions of 2008 ?

The Head & Shoulders pattern on the weekly chart of IYR, could mean reversal ahead.

Price action’s been attempting to move higher over the past twelve trading days.

‘Attempting’, because it’s not making any significant net progress.

Essentially, we’ve got what’s called ‘evidence of a struggle’ where the bulls may be exhausting themselves.

The last update on bonds (TLT), said they’re at the danger point where an upside reversal was possible.

That update also said:

“At this juncture, there’s either a reversal and much higher levels or down, with rates higher; in turn, leading to the subsequent collapse of real-estate, a-la 2007 – 2008.

Since then, bonds are lower, rates higher. Housing affordability has collapsed.

Real Estate, IYR, Weekly

At this point it’s a clear H&S, pattern.

The daily chart shows IYR, oscillating around an axis, support/resistance line; struggling to move higher (in up-thrust condition) with no real progress.

As with bonds in the April 3rd, update, we’re at the danger point with IYR.

A decisive move below the axis (blue) line would indicate the bulls may be exhausted.

Because price action’s been in this range for over two weeks, lends support to the possibility any breakdown (or breakout higher), may be a sustained, directional move.

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

Bonds (TLT), At The Danger Point

Where Risk Is Least

Bonds are at the danger point; poised for upside reversal.

Upside?

Bonds up, rates down, is that even possible?

The weekly chart of long bond proxy TLT, is below. It’s not called ‘the danger point’ for nothing.

Weekly, TLT

The danger point is not the top or bottom of a move.

It’s the area where risk is least for either direction. Where the cost of being wrong is reduced as much as possible.

Getting closer-in on the weekly, price action has penetrated support (blue line) and has stopped-dead, so far.

Note the bullish divergence in MACD and MACD lines. It’s not a strong divergence but it’s there.

Next, we have a (bullish) wedge pattern. It’s a big one that took over a year to post.

The False Narrative

If one is serious about their work in the markets, eventually there’s a realization, every narrative is false. The media serves the purpose of the owners and nothing else.

The repeal of the Smith-Mundt act in 2012, allows them to be in complete propaganda mode.

They’re under no obligation to print (or broadcast) anything near the truth, going whole-hog on that ‘freedom’ and fleecing the public at will.

Using that premise, we can say the ‘inflation’ narrative is false or at least twisted; partially true.

The Bond Sell-Off

With incessant dollar ‘collapse’, dollar ‘end of the road’, inflation ‘rampant’, yada-yada, day after day, it’s no wonder bonds have sold off.

At this juncture, there’s either a reversal and much higher levels or down, with rates higher; in turn, leading to the subsequent collapse of real-estate, a-la 2007 – 2008.

Summary

Would I personally be a bond buyer at this point … no. I’m not keen on buying the debt, any debt of a bankrupt nation (not advice, not a recommendation).

It’s important to note, if bonds do rally, the catalyst may be a perverse ‘flight to safety’ on the public’s part resulting from significant downside in the overall markets.

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

Bond, Bear Trap … Now ?

TLT, Penetrates Support Early

Looks like bonds (TLT) aren’t wasting any time.

This update proposed we’d get a penetration of support sometime around the upcoming Fed meeting on the 26th of this month.

However, today, TLT price action has moved lower, penetrated support and is resting just below those levels.

Long Bonds (TLT) Weekly

The Weekly chart shows price action hanging just below support levels (blue line).

TLT is at the danger point where risk of going long, is least (not advice, not a recommendation).

My firm has no interest in buying the debt of a bankrupt nation … any nation. So, we’ll stand aside on going long the TLT.

However, we can use this action as a proxy for the overall markets. That is, a strong TLT upside reversal may indicate downward acceleration in the major indices; S&P, Dow, QQQ and on.

Senior Miners, GDX

The daily chart of GDX has posted a new daily low.

This action helps to confirm that GDX remains in the downward trading channel, discussed here and is now continuing to move lower into that channel.

Positioning:

Remaining short GDX via DUST and increasing position size as the market allows (not advice, not a recommendaiton).

Trade identified as DUST-21-01.

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

Bond, Bear Trap … When ?

Let’s Pick A Date

Hovering right at support, the long bond (TLT) is threatening to break through to the downside.

The usual suspects are out (here and here) pontificating about how many rate hikes there’ll be this year or how the Fed’s ‘not doing enough’ to combat inflation.

By now, anybody with two basis-points rubbing together should know, the Fed’s not going to do anything for anyone except itself.

If you’re reading this and have not separated from the nonsense, predictive programming, and mass-psychosis that is the financial press, feel free to do so now.

Not that one has to ignore them altogether.

It’s ok to monitor what they’re doing but ‘ol Zig Ziglar probably stated it best when he said (paraphrasing):

‘I read the Bible and the newspaper every day. That way I know what both sides are up to’. 🙂

Incorporating that worldview into one’s analysis is a healthier, more sane approach than trusting government statistics or mainstream propaganda.

Of course, one also has to be able to strategize and read price action. That’s the hard part.

So, let’s take a look at what bonds (TLT) are doing; then come up with a potential reversal (to the upside) scenario.

Asset Confiscation

Wait !!!

Bonds up and rates down? How is that possible. Aren’t interest rates going up in 2022?

Well, it could happen.

However, there’re several behind the scenes agendas at work; not the least of which is asset confiscation of the middle-class: “You will own nothing”, right?

This confiscation scheme has been planned for so long, it’s even got a name: Neo Feudalism.

If market participants and ‘investors’ find themselves in yet another wipe-out, they’re going to flock to the supposed ‘safety’ of U.S. bonds (just like they did last time).

Couple that with a few potato-head executive orders saying the market’s too dangerous for the proletariat; only bonds can be purchased and voila!!!

Long Bonds, TLT

Will that scenario above, play out in 2022?

Of course, that’s unknown until it actually happens.

However, what we do have as shown in the weekly chart of TLT, is a potential bear trap setting up.

Price action finished this past week hovering just at support. The range narrowed and the volume declined slightly … in effect, validating that support.

We’ve got an FOMC meeting coming up with the usual suspects issuing a propaganda statement at 2:00 p.m., EST on the 26th.

What To Watch:

Between now and then, bond price action could re-write the entire script just as it did with the gold market set-up.

Back then, the original gold (GLD) breakout idea was tabled only to have it show up again a few weeks later.

Note: Gold (GLD) broke to the upside exactly at the (purple) circled area shown:

Time and location, identified in advance.

Of course, the markets are a fluid and fractal mechanism. We’re dealing with probabilities and strategy, not pure (one answer only) mathematics.

Anything can happen.

However, given all the above discussion, the chart of TLT shown, has a reasonable potential to trap the bears in a bullish reversal if it penetrates support.

What’s the most likely time for this to happen?

Well, that would be on or about 2:00 p.m., EST, January 26th (absolutely 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

Bonds … Kabuki Theater

Early Session

What Is The Bond Market Saying About Itself?

With all the media press and hype, you would think bond yields have just spiked above 15%.

We have to remind ourselves that everything, that is, every move, every press release, every interview, is controlled.

Controlled for the purpose of “deception” as Livermore put it during an interview with Wyckoff in 1921.

With that in mind, who stands to benefit from the sharp move lower in bonds?

Seems like the obvious answer is, the short-term shorts and the longer-term bulls; especially if the hapless ‘hedge funds’ have jumped on the band wagon to short the market.

Bond (TLT) Analysis:

What Is The Market Saying About Itself?

The sharp move lower over the past four trading sessions, has likely cleared out the weak hands and emboldened the shorts to short some more.

The problem is (for the bears), we’re at a 50% retrace of the March 18th low. In addition, price action has just penetrated well known support.

That puts the bond market (TLT) in spring position.

We can see from today’s open, TLT is gap-higher and now, just below the support level.

We’re at the danger point, where the risk of going long is least (not advice, not a recommendation).

Because the four-day down-draft was so swift, don’t expect TLT to launch into an instant and sustained rally.

There may be quite a bit of testing (if and) before this market heads higher.

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.

Biotech Reversal, Repeating Trend

9:45 a.m, EST

Price action itself defines the trend

The unmarked hourly chart (above) of inverse fund LABD, shows the location of the last update.

That update called for LABD to reverse higher; based on thrust action of the market itself.

Soon after (magenta arrow), LABD pivoted higher.

The right side action has a familiar repeating trend:

The chart below is a compressed version.

The repeating lines have been added. Arrows show contact points:

Strictly as a courtesy, daily chart of LABD is below with notations of buy and sell (not advice, not a recommendation) for my firm’s main account.

A good many that monitor this site have probably become bored with biotech … just as they did with Steven Van Metre’s analysis of bonds (back at the lows).

Van Metre is providing an excellent service. True, he probably has people moving their accounts to him. He’s running a business after all.

However, that does not negate the fact, he’s one of, if not the only one saying that we’re about to enter a deflationary environment (if not just temporally); complete opposite the conformist (and media led) crowd of hyper-inflationists.

Even Johnny Bravo has said, ‘hyper-inflation will come … but when?’

Summary:

The short positioning in biotech (via LABD) continues: Not advice, not a recommendation.

Rumors are swirling now about power outages and cyber attacks with major corporation website shut-downs.

Does anyone really want be to playing around with long positions when torpedoes (to hit the market) are already in the water?

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.

Economic Collapse … The Model

1:44 p.m., EST

South Africa shows us how it’s done

‘Hey J.B., when’s the collapse?’

That’s a comment often seen on any number of Jerimiah Babe’s updates; openly mocking his doom and gloom assessment.

Whether he’s at the local homeless camp in Los Angeles, or in his home next to the golf course, the question remains the same;

‘J.B., When’s the collapse?’

Sometimes his response (if he’s at home) is to turn his head to the window and say “Have you looked outside?”

A good number of American’s have become so pathetically weak, ignorant, and just (to overuse the word) plain stupid, they expect to sit on their newly built patio deck (using last year’s stimmie check) and observe the fall of the U.S. from the comforts of their own back-yard.

Of course, there are some (including this author) who are first generation Americans. Their parents and grandparents emigrated (or escaped) from communist countries.

Those people do not have to ‘wake up’; they were never asleep.

Coming Attractions:

South Africa gives us the model for what’s in store … at least for sections of the U.S.; probably starting first with the blue sates (we’ll see).

You might say, it’s already happening in Portland.

One news item of note shown in this report from South Africa, is neighborhood patrols.

If that’s coming our way, then we’ll need to get outfitted (if not already). Here’s a good place to start.

All of which, brings us to the markets.

Bonds (TLT):

Yesterday’s update showed how the so-called ‘bloodbath‘ was actually a set-up to go long (not advice, not a recommendation).

It didn’t take long for bonds (TLT) to give a Weis method ‘buy signal’. That happened at the open today.

The bull move in bonds does not confirm the ‘re-opening’ hype. That in itself, should be all that’s needed to make decisions.

It is interesting to note; on sites like ZeroHedge, there’s no talk whatsoever that biotech has (already) reversed and is leading the way down.

As of this post, inverse biotech fund LABD, is up about 38%, from its lows of late June. It appears poised for yet another breakout; lower for SPBIO and higher for LABD.

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.

Garbage In … Garbage Out

10:49 a.m., EST

Another day spent digging in the trash

This morning’s perusal through the usual suspects of finance, leaves the feeling you’re sifting through garbage.

Every once in a while, like yesterday’s post, there’s something useful.

Most times, not.

Today is no different.

Here we have an article about the ‘bond bloodbath’ and how inflation is not transitory.

Instead of falling into the trap of contesting the current false narrative, we’ll take a different approach.

How can the constant stream of financial nonsense, lies and miss-direction, be put to use?

Since the article linked above is about bonds, we’ll use that for our example.

The Bond Market (TLT):

First, the David Weis training video (linked here) has been discussed many times over the years.

We can’t make recommendations but we will make a suggestion; that is, whatever the video costs at this point is well worth it.

Our TLT market entry technique (below), is taken from that video (not advice, not a recommendation).

We’ll start with an unmarked chart of TLT. The ‘bloodbath’ referred to in the link above, is yesterday’s down-draft.

Steven Van Metre has already laid the fundamental groundwork (for about a year) on why bonds will rally.

We’re there now but the market’s not going to let anyone get positioned long easily.

The next chart shows how the Weis technique can be used to get aboard the rally.

Yesterday’s so-called bloodbath, is really a trade entry set-up.

Notice how the market does not come back to the ‘entry’ levels. This chart fits the Weis example to perfection.

The bond market’s signaling there’s something very wrong with the ‘reflation’ or ‘re-opening’ trade.

The reflation, re-opening does not exist.

The economy is not coming back.

Summary:

It took over twenty years of searching to stumble across the Weis video. As with a lot of things in life, it was almost by accident.

After watching him dissect the ‘Apache Spring’ (APA) trade, it was obvious the search for ‘truth’ had ended; the education was about to begin.

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.

Project Update

Early today, LABD was exited having hit the stop.

If there is a story for the day, it’s the long bond TLT.

Potentially a nascent reversal.

Interest rate sensitive markets, like real estate, appear positioned for reversal as well.

Inverse fund DRV above, shows penetration below support and then testing action today.

We’re at the extremes of price action. IYR and DRV do not need to go far to confirm or negate a reversal condition.

At this point (1:03 p.m. EST) our ‘project’ has no position … although DRV looks enticing and low risk (not advice, not a recommendation).

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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.