Silver Heads Lower to 18.00

From the update on February 9th:

It’s unlikely silver is going higher any time soon. There could be some upward spasms as the crowded trade exhausts itself; it’s likely we’ve seen the SLV highs for quite some time.

Taking today’s pre-market action into account, SLV is down -12% from February 9th, and down nearly -20% from its most recent top of 27.98, posted on February 1st.

The weekly chart above shows a huge bearish divergence in momentum (MACD); thus far, it’s in-effect.

The next chart has SLV breaking out of a wedge, forming a measured move that could take SLV down to 17.50 – 18.00, area.

The so-called ‘Silver Short-Squeeze’ is becoming a distant memory as the public are being herded into the next non-event.

There’s always the caveat, anything can happen. Somehow there could be a change of character in the market. For now, we’re still leaning toward a deflationary event of some type.

For those that may be new to these updates and as a reminder, rising prices (food, lumber and gasoline) are not signs of inflation. They are signs of supply constriction.

It’s becoming very clear that’s the game (or the plan). Perhaps the most critical constriction is the food supply.

We’ll leave that one there. If you need more info, search Food Supply on this site.

As this post was being created, SLV has continued lower in the pre-market; currently down -2.00%

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.

Gold (GLD) Path to 166

Early action GLD points to a rebound, target area 166.

The 30-minute charts shows a push below minor support (black line) that’s retracing.

Any time a market pushes below established support, it will attempt to ‘spring’ off that support level.

In this case we’ve already identified the 166 area as the target.

At this juncture, a GLD target of 166 would correspond to an April ’21 futures target around $1,765.

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.

Early Session Update

It did not take long to be proven wrong.  DUST positions (in both accounts) have been exited.

Stated before, a 23.6% retrace is a rare event.  Looks like that’s holding true as price action for GDX now points to the 38.2% area. 

That corresponds to GDX trading to around ~ 38 … a long way to go higher.

Biotech, shown below is just 0.69-pts shy of target with price action (as of 10:34 a.m. EST) coming back to test the early session lows.

It’s traders discretion (not advice, not a recommendation) to determine if today is the day IBB finally reverses and confirms the bearish weekly MACD divergence.

 At this point, daily action has quickly retraced from the high of 149.31

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.

Downside Leader

Two months ago in this post, the idea was floated that biotech, IBB may be the downside leader.

It certainly didn’t look like it at the time.

Biotech even went on to make a new high … potentially negating the theory.

shutterstock_146355983It’s different now.

After that new high, IBB has reversed and is trending lower.

On the other hand, the overall market, S&P 500, continues its push upward.

It’s within 1% of all time highs.

Pre-market action as of this post, has the S&P opening up about 0.4%, higher … ever closer.

At this juncture, biotech has hinted at downside leadership.  That hint my become a solid fact if and when the S&P has a decisive downside reversal.

 

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.

Moderna: Pump-n-Dump?

With the highest daily volume ever, 91-million shares last session, who’s taking the other side?  Of course, it’s a rhetorical question.

The professionals are likely the ones selling and selling-short.

Maybe there are a few amateurs as well who are just starting to figure out how the game is played.  That is, after they’ve blown out their account for the third, fourth, or fifth time.  Account blow-ups seem to be a requirement for every soon-to-be professional.

2020-07-16_9-31-17-MRNA-Daily-3-bar-notesEven with that historic one-day volume, price action could not break through and close above previous resistance (see chart).

Today’s action continues below resistance.  Not a good sign.

We see that biotech fundamentals are out the window and herd (insanity) mentality is at the helm:  Video link here.

The risk of going long (IBB) at this juncture was displayed just a few days ago (Monday, the 13th) when downside action showed just how quickly the bottom can fall out.

What if there’s major rout?  Does anyone really expect their trading platforms to remain operational?

Lest anyone forgets, let’s review what a crash really looks like.

On this site, the impending reversal in biotech has been covered for some time and we’ve been looking to open a strategic, short-position.

With that said, it’s been a frustrating and somewhat expensive endeavor over the past two months to establish that short.

Biotech (IBB) action posted an all-time high yesterday with low thrust energy.  Today we have a new daily low.

It’s lower highs and lower lows.  That may be the signal:

Reversal underway.

 

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.

 

 

Biotech Higher? Probably Not

Biotech could levitate on higher in the coming week but probabilities say no.

The chart (expandable version here) prints slowing upward energy since April, this year.  It’s clear that each upward thrust has produced less net gain.

2020-07-02_16-58-20-IBB-Weekly-5-bar-notes-BISThe first upward thrust from the end of March to late April, was a solid 28.7%.

After that it was 6.78%, then 2.31% and now last week, all the index could manage was 0.50%.

At this juncture, biotech appears exhausted

Anything can happen.  Price action can move higher in the coming week but it’s a low probability.

A quick internet search of ‘going short biotech’ turns up nothing recent except for this article from May, this year.

The chart of IBB shows the location of the linked article; Just towards the end of the first solid upward thrust.

That was then, this is now

Subsequent thrusts have lost energy.  It looks like we’re at an inflection point.

 

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.

Trend Change in CORN?

Massive volume inflows into CORN suggest that crop failures, grand solar minimum and controlled demolition of the food supply are all coming to fruition.

iStock-1019396932As reported by Ice Age Farmer at this link, the earth is cooling so rapidly that northern grow areas for corn aren’t warm enough on a go-forward basis, to mature the harvest.

There aren’t enough heat units (known as ‘growing degree days’) to mature the crop, plain and simple.

The result is crop failures on an unprecedented scale.

Couple that with planned, controlled demolition of processing capability; whether it’s not enough harvesting manpower, not enough transportation vehicles, drivers, or whatever excuse can be conjured up, the availability and supply of corn is being crushed.

Corn futures look to have made a long-term bottom and are pivoting to the up-side.

 

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.

Winter of Discontent

With layoffs, bankruptcies and production shut-downs, the energy sector may be setting itself up for higher oil and gas prices; especially this coming winter.

Fotosearch_k1394195There’s potential for brutally cold winter temperatures from decreased sun-spot activity (called solar minimum) while at the same time producer output is contracting or disappearing altogether

In a paradoxical price action set-up, UNG, the commodity tracking ETF, may have just signaled a long term bottom.

Discussion and technical analysis of UNG is here.

As of this post and with natural gas prices declining for so long, looks like today’s action is a short squeeze.

Now is the winter of our discontent

Richard III

 

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.

Sideways Is A Bear

We’re just one month shy of exactly 5 years since the biotech top of July 2015.

Fotosearch_k7909008For those five years, biotech has struggled higher with sideways, corrective price action.  Only within the past two months, has IBB made it to new highs.

A sideways market is a bear market as dollar purchasing power drops steadily.

Bearish divergences seem to be everywhere.  Divergences on both daily and weekly charts:  MACD on the daily, RSI on the weekly.  Even on the monthly chart, MACD lines are divergent.

Last session (Thursday) had IBB attempting to push higher.  Up-volume contracted by 51% from the prior (down) session; another bearish sign.

Biotech is set to reverse in a big way.  In what looks to be a possible last ditch attempt to cash-out, news was released that Texas has re-imposed restrictions.

IBB’s response was to push slightly higher for about an hour.

After the blip, price action reversed and continued lower; posting new daily lows right around 2:00 p.m. EST.

The move higher has failed.

There’s no more powerful set-up in the markets than a failed move.  Failed moves show one side has reached exhaustion.

Well followed market sites such as Money GPS and Sajad, have their respective comments sections expecting the Plunge Protection Team at any moment.

What if that ‘team’ has accomplished their objective?

 

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.

Extreme Biotech

In today’s trading session, biotech IBB, was stretched to the extreme; coming within 0.30 points of making a new weekly high.

Fotosearch_k76678088Doing so, would have negated the bearish (reversal) case that’s been presented on this site over the past six weeks.

Late in the session, price action began to erode and ultimately closed posting a reversal bar.

Even though IBB posted a reversal, the actual close was higher than yesterday’s.

That fact holds out the possibility of higher prices.  It’s the way of the markets.

Who’s in control, bulls or bears, is always under contest.

If the next session moves lower and posts a new daily low, we’re at a pivot point; a trend change and potential for much lower prices.

A long term view of biotech shown here has the Relative Strength Indicator in a significant bearish divergence.  From that perspective, biotech is out of fuel.

 

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.