Position Change

DRV pushed through our stop early in the session; position closed (not advice, not a recommendation).

1:50 p.m. EST:

Despite all the analysis, IYR is showing continued buoyancy.

Something else is going on; possibly related to Uneducated Economist’s link provided in the last update.

Taking his cue, a functioning mortgage market is all important to the financial narrative, it’s possible this market will be more heavily manipulated than others.

At this juncture it would make sense. All indications are for reversal … yet it’s not happening in any significant way.

Time for another trade.

We’re going back to a market that in retrospect, should’ve been the focus all along; Biotech.

This site’s coming from the perspective those reading, are well aware the ‘speck’ as we call it (to avoid censorship) was a fabricated event.

Just a reminder that we’re not some ‘Johnny come lately’, here’s the link from way back in May, last year.

That post proves the situation was figured out well before the May 17th publish date (interviews, observations conducted a month prior).

What’s not fabricated however, are the repercussions from the so-called cure for the speck.

Unfortunately, those are happening now and are quite real.

Moving on to the trade.

Despite the number of transactions shown in the Project Stimulus table (below), the objective is to minimize activity. We’re looking for a mid, to long term sustainable move; gain potential, 100% to 1,000%.

Updated previously, very long term (Quarterly) IBB has reversed.

Monthly and weekly have reversed as well; both the monthly and weekly MACD indicators point down. Daily is essentially flat.

The hourly chart of LABD (3X inverse IBB) shows the entry location and subsequent price action. Stop is the session low @ 22.23 (not advice, not a recommendation).

It’s worth repeating, the false narrative on the speck and consequences of speck protection may blow up in the media (and biotech) at any time.

As J.P. says, getting people to do something they know is bad for them (or lethal) is the ultimate ‘elite’ high.

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.

Technical Discussion, Real Estate

“Depending on where that close is … “

That, from the last update on real estate, IYR

Price action is extracting every last bit of up-side. We’re down to the five-minute chart (above) to discuss yesterday’s move.

Any time price action penetrates a low or support level, it automatically puts that action in ‘spring’ position. Sometimes the selling is just too strong and the spring set-up fails immediately.

Other times (like yesterday), it holds.

Another way to look at it; for IYR to move higher, it had to go lower to get the needed fuel (penetrating support levels). Only this time, and depending on the data provider, IYR closed unchanged or up 0.02-pts.

So, the range in our recent technical discussion(s) has gone from 9.77%, to 1.83%, to 0.60%, 0.27%, and now, yesterday, 0.0%.

Before a market can go down, it has to stop going up … looks like we’re there or at least at the point where reversal is highly probable.

The hourly chart has the characteristic where volume spikes indicate trend change or potential change. The right side of the chart has the spikes but no direction change … yet.

Separate but related, Uneducated Economist gives his take on potential government ‘incentives’ for real estate.

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.

Silver: Sunday & Overnight

It’s about 9:37p.m. EST, on Sunday. Price action in the futures markets (SIK21) has silver up about +0.40%.

Projecting that action onto the regular daily session of silver, has it within the black box; located right up against the blue trend line.

At this juncture, the down-trend is still in effect.

In others markets … real estate:

A report just out by Uneducated Economist has ‘boots on the ground’ reports lumber inventory (for housing construction) is piling up at mills at levels never before seen … ‘stacked to the rafters’.

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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.

Market Duality: Silver

Silver, SLV’s at a juncture where it can either go sharply higher or continue lower from here

Punching through support puts SLV at the danger point.

Whenever price action penetrates support and hesitates, it’s in Wyckoff spring position; poised to move higher.

Because we’ve got a weekly MACD bearish divergence in addition to a huge volume ‘changing of hands’ on February 1st, probability would favor downside action … continuing on to 17.50 – 18.00 area.

Nonetheless, SLV could rally from here … even in the midst of a longer term bearish (deflationary) environment.

The precious metals sector is a crowded trade and one to be avoided (not advice, not a recommendation).

An interesting post on the current inflation/deflation scenario is here.

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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.

Basic Materials

Nobody’s paying attention to this index. It may be one of the cleanest (technical) short opportunities.

Basic Materials. Sounds boring.

Sounds like fertilizer … and it is … right along with industrial chemicals.

Three largest cap in the sector are below:

Industrial gasses, Linde AG

Industrial gasses and chemicals, Air Products & Chemicals

Water purification, Ecolab

DuPont is next and then Newmont mining. So, this is a potential deflation play (Newmont) as well.

A post just out yesterday, Uneducated Economist does an excellent job destroying the inflation narrative.

Steven Van Metre has also repeated many times, we’re likely to get a deflation impulse first before inflation.

One of the most important things he’s said, the Fed is not going to correct the public’s (false narrative) perception that inflation’s the danger.

If everyone’s pointed in the wrong direction, and it serves their interests, why correct it?

Which brings us back to Basic Materials. ‘Nobody’s watching’ this index. How do we know?

Look at the inverse fund, SMN.

Russell 2000 inverse, TZA, averages 6 – 10 million shares per day. Compare that to SMN’s 2,500 shares on a good day.

Volume does pick up as price action becomes active. Some days will be 100,000 – 200,000 shares.

Looking at the technical condition, there are bearish divergences on both daily and weekly time-frames. The chart at the top shows a Wyckoff up-thrust (reversal) condition just tested yesterday.

The response is to go short via SMN (not advice, not a recommendation).

Since we’re actively managing accounts throughout the day, it’s not a problem to monitor SMN and the bid/ask of the fund when trading is light.

The ‘project’ table has been updated:

Pre-market has SPY trading down about -1.5 points or -0.40%. The expectation is for Basic Materials to follow suit.

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.