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.
In probably his best video update since he stared in early 2015, he lays out the details of what’s ahead.
Although not well versed in the markets (and he says so), he has enough experience, life-knowledge, to understand the current potential and likely outcome.
That is, ‘relentless collapse’.
Those of us who have been getting ready for years, know that we still aren’t ready. How can anyone be fully ready for a complete systems breakdown.
One ‘system’ that’s set for implosion and has been since before ‘The Speck’, is biotech.
Biotech: Cue The Implosion
It’s been an on again, off again, back on, and so on, with this index (SPBIO).
Every day now, sometimes multiple times a day, we see the effects of their ‘protection’. Wheels are in motion and we’re most likely just getting started … for decades to come.
Yesterday’s Fed announcement, may have (finally) provided the up-thrust and reversal needed to get this index in a sustained down move.
Biotech SPBIO, Daily Close
The daily chart shows the up-thrust test and reversal.
We’ll get into downside potential(s) in an upcoming post.
For now, the positioning remains unchanged (not advice, not a recommendation).
Positions, Market Stance (courtesy only, not advice).
TMF-22-01:
Entry @ 7.166, Stop @ 6.77
LABD-22-09:
Entry @ 19.88, 19.71, Stop @ 18.69
Note: Positions may be increased, decreased, entered, or exited at any 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.
Of course, the already hammered bond market (TLT), got hammed some more.
It’s what happened next, and what’s happening today, that’s important.
That is, the sell-off was quickly reversed (to the upside) with that upside continuing this session.
The bond supply is being absorbed.
So, what does that mean?
It’s possible, the bounce, melt-up, squeeze or whatever one wants to call it could be over. There may already be a ‘flight to safety’ if there’s such a thing these days.
But let’s not hypothesize on what could be happening. The market itself (price action), tells us.
Bonds TLT, Daily
At about mid-session, this is where we are.
We’re right at the downtrend line.
The attempt to mover lower (yesterday), has been rejected.
As a result of today’s new daily high, the stop on position TMF-22-01, has been moved up (not advice, not a recommendation).
So, we’re now between the downtrend and the ‘rejection’; something’s likely to break.
Summary
The S&P (SPY) just posted an up-thrust reversal early this session and is still moving lower as of this post.
Keep in mind, all of this is happening before any Fed announcement … as if the market has already decided.
A quick note on biotech, SPBIO.
Position size has been increased in SPBIO, leveraged inverse LABD, as shown below (not advice, not a recommendation).
This sector remains at The Danger Point®
If the bounce really is over, biotech is likely to get hit the hardest.
Positions, Market Stance (courtesy only, not advice).
TMF-22-01:
Entry @ 7.166, Stop @ 6.77***
***, Indicates change
LABD-22-09***
Entry @ 19.88, 19.71***, Stop @ 18.69***
Note: Positions may be increased, decreased, entered, or exited at any 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.
Instead of upside follow-through, we had downside test and reversal.
Gold:
GLD, closes lower and is now down seven consecutive months … a record for the tracking ETF.
Biotech
Index SPBIO, has been attempting to move higher, with it posting into an up-thrust last week.
Today it couldn’t hold the upside; now looking like a nascent reversal.
Note: Position changes at the bottom of this update.
The test and reversal in bonds (TLT) is obvious and there’s no open position in GLD.
So, we’ll focus on biotech.
Biotech ($SPSIBI, SPBIO) Daily
The zoom area of the chart shows price action just can’t seem to get above resistance (blue line).
Successive attempts were made throughout today’s session to go higher, but it didn’t happen.
Getting in closer on the hourly chart, we see the apparent upside failure during the last hour of trading.
Biotech SPBIO, Hourly
There is no doubt where at The Danger Point®
Right about mid-session, a short position was opened via LABD (not advice, not a recommendation) as LABD-22-09.
Summary
Today’s expectation for bonds was a follow-through to the upside … it didn’t happen.
In response, the initial TMF-22-01, position was closed with the secondary remaining open (not advice, not a recommendation).
Meanwhile, biotech SPBIO, was having its own problems; that is, being in up-thrust condition and not being able to make a new daily high. i.e., The Danger Point®
Positions, Market Stance (courtesy only, not advice).
TMF-22-01:
Entry @ 6.705, 7.166, Stop @ 6.68
Partial Exit @ 7.053***
***, Indicates change
LABD-22-09***
Entry @ 19.88***, Stop @ 18.94***
Note: Positions may be increased, decreased, entered, or exited at any 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.
It’s either a short-term trade or a strategic reversal.
On the strategic reversal side is this just out from ZeroHedge.
‘Inflation’ may have peaked; where have we heard that before.
However, the charts presented in that link, do show we’re at an extreme.
If we look at the TLT, price action itself, which is impulsive down, we’ll go with the short-term first (not advice, not a recommendation).
With that, Friday may have been the ‘test’ from our capitulation model.
The weekly chart of bonds TLT, shows the anticipated up-tick in MACD, as well as the measured move target from the terminating wedge.
Long Bond, TLT, Weekly
Note, the wedge has not (yet) broken to the upside … we’re still at The Danger Point®, where the trade could fail.
If we look at the daily chart, probabilities point higher.
Long Bond, TLT, Daily
If this past Friday was the ‘test’ of the move, the retrace was a very weak Fibonacci 23.6%.
A new daily high in the next session(s), will help to confirm we’re headed higher.
Positions, Market Stance (courtesy only, not advice).
TMF-22-01:
Entry @ 6.705, 7.166***, Stop @ 6.68
***, Indicates change
Note: Positions may be increased, decreased, entered, or exited at any time.
Summary
If bonds continue to move higher, with rates heading lower, what’s going to happen to real estate, IYR ?
The wheels of the real estate crash have already been set in motion. If bonds rise, rates fall and IYR moves higher, there are specific targets to watch for short opportunities.
We’ll discuss those targets and more, in the next ‘The Market Set-Up … This Week’
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.
There’s nothing wrong with being wrong … it’s being wrong and staying wrong, that’s the problem.
What appears to be correct so far, is the upside reversal in the bond market.
We’re going to look at another capitulation to get some idea of what to expect if indeed bonds have reversed.
This past April, the gold market (GLD) capitulated on the upside. At the time, it was quickly and correctly identified as a ‘changing of hands’.
Gold (GLD) Capitulation
From a strategic standpoint, gold has not looked back.
Down around 20% (although slightly higher in today’s pre-market), there seems to be no major catalyst to get a similar capitulation reversal.
Using that reversal model and looking at bonds, we’ll use the 3X Leveraged Fund TMF, as the example.
Leveraged funds accentuate market moves, sometimes giving a clearer picture.
Bonds (TLT) 3X Leveraged Bull Fund, TMF
As far as what might be behind a (sustainable) bond reversal, we have this report from Steven Van Metre.
Using The ‘Model’
Note in the GLD reversal, prices went lower for a while and then came back to ‘test’.
Using that, we can expect TLT, TMF, price action to rise for some (unknown) period of time; then come back to ‘test’, before continuing higher (not advice, not a recommendation).
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.
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.
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.
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.
Not to be outdone, we have this ‘me too’ melt-up article as well.
Let’s not forget, all the ‘Fed must do something’ rumors and feigned concern by its members.
If anyone really wants to know the big picture, the overall plan (a wide majority do not), this interview may be the best explanation to-date.
With all of that, we certainly could get some kind of rally in the coming week. We’ll let the price action speak for itself.
As a reminder, Wyckoff analysis does not concern itself with press releases, rumors or ‘fundamentals’; Wyckoff himself, determined based on price action alone, they have no material effect on market movement.
In his words, ‘other forces are at work’, and it’s those forces that interest us.
Gold & Silver
As said in this update, gold (GLD) was just ‘ticks’ away from posting a new monthly low. In fact, it got just 0.24-pts, from a new low before rebounding.
Of course, each time we get any kind of rally in the metals, there’s the usual hysteria. Even though for the past seven months and counting, those rallies occur at lower and lower levels … i.e., a bear market.
Shown below, it’s in a trading channel with price action at the right-side channel line.
Gold (GLD) Weekly
The chart below gets closer-in.
From left-most contact point on the channel to the initial contact on the right side is a Fibonacci 13-weeks.
Also note, the weekly high posted at the center line is a Fibonacci 5-weeks from the left-most contact.
Highly emotional markets tend to adhere to Fibonacci until either the emotion wears off or ‘everybody’ recognizes the structure.
Obviously, to keep the channel intact, a lower open (and lower action) at the next session is needed.
Looking at the daily chart of TLT below, Friday’s level of (down) volume has occurred only three times in the past three years.
Each time, there was a near immediate rebound or in the case of March 2021, the rebound came several weeks later.
Bonds (TLT) Daily
Moving in closer, we see the possibility of an ‘island-gap’ at the next open.
What could drive capital into the bond market?
Well, how about a ‘shock’ or continued market melt-down (not advice, not a recommendation).
A quick check of the local newsfeed (as of 12:45 p.m., EST) shows nothing on the horizon other than usual nuclear attack threats, power outages, child mutilation protests, marauding bears and the disarmament of Canadians.
Nothing to see here …
Real Estate
There is no mistake, events in real estate are happening at the fastest pace in recorded history.
As Scott Walters put it, over 10-million people bought into the ‘work from home’ hype and got themselves instantly (nearly) upside down in their transaction.
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® 