Category Archives: Uneducated Economist

The Fed’s Next Move … Rates Up

February 19, 2024 By in Bonds, Federal Reserve, Interest Rates, NVDA, TLT, Uneducated Economist, ZeroHedge

What A Surprise!

The Fed’s next move may be to raise rates, not lower them.

For those following this site, there’s no surprise. Over a year ago, we had this:

“Like ‘bread and circuses’, the ‘pivot’ discussion is a distraction … “

Incorporating the potential of rates higher into one’s analysis, ‘internalizing’ it as Uneducated Economist says, positions one completely out of the herd, able to view events objectively.

All of which brings us to the bond market, specifically long bonds TLT.

Long Bonds ETF, TLT Daily Close

Updates from this site are noted.

Until price action shows otherwise, rates are likely to head higher, not lower (bond prices down).

Therefore, using that strategic premise, the upside breakout (above resistance) in bonds had a higher probability of downside reversal than upside continuation.

No. 1 : The Usual Suspects

In the update with the above name, link here, scroll down to bullet item No. 10 for analysis.

The potential for a false breakout was correctly identified,

No. 2: Bond Reversal ? … Ruh, Roh

First, there’s potential, then, the actual.

The next update, link here, presented among other things, the odd occurrence of both bond and overall markets moving down simultaneously.

The inference being, the 40-year bond bull market is over and higher rates are more likely (not advice, not a recommendation).

Then, The Fed and Nvidia

The next few days may be quite interesting.

Nvidia (NVDA) earnings are due after hours on Wednesday and the Fed minutes are scheduled for release earlier (2:00 p.m., EST) the same day.

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.

The Danger Point®, trade mark: No. 6,505,279

Biotech “Bottled Air”

January 31, 2024 By in $SPSIBI, Biotech, DHI, Federal Reserve, LABD, SPBIO, Uneducated Economist, XBI

Nothing (or not much) Holding It Up

We’re still a few hours away from the Fed announcement and it’s already high anxiety in the market.

D.R., Horton (DHI) has retraced about 38% of its move and is testing the underside of breakdown resistance.

Over on the ‘Little, or no P/E’ side of the market, biotech XBI is coiling, building (downside) potential in its own on-going reversal.

Biotech XBI, Daily

The last update on biotech XBI (link here), said to watch for a false breakout.

The chart shows the result. The breakout did not last; we’re congesting just below resistance (blue line).

The latest post from Uneducated Economist talks about the potential for lower rates, i.e., probabilities are low.

Incorporating that possibility into the above analysis, it suggests the XBI move from last November to the end of December, is essentially built on “bottled air” (not advice, not a recommendation).

The retail side of the market appears to be positioned long, expecting lower rates.

What happens if that does not happen?

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’s Technical Exhaustion

January 6, 2024 By in DUST, Federal Reserve, GDX, GDXJ, GLD, Gold & Silver, Gold Miners, JDST, Richie Naso, Uneducated Economist, ZeroHedge

Divergences, What Happens Next?

Is gold about to blow up?

Blow-up breakout? … No, blow-up breakdown.

As we’ll see in the chart of GLD below, double bearish divergence on the daily.

At time stamp 6:10, here, in the Fed’s own words, rates are not coming down, they’re likely to go higher.

‘We will need to increase the Fed’s funds rates further …’

Not forgetting bonds, may have already reversed, here.

Then, liquidity crunch … yet to appear in full force.

Next, a reminder, herd instinct is strong, link here.

Gold GLD, Daily

On a daily basis, we have a double bearish MACD divergence coupled with a terminating wedge.

As veteran trader Richie Naso says, ‘It’s all about patterns‘.

Let’s add intrigue, here (time stamp 13:58), finding out what happens in a liquidity crisis, i.e., ‘Sell everything.’

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 Reversal ? … Ruh, Roh

January 3, 2024 By in Bonds, Federal Reserve, TBT, TLT, Uneducated Economist, Wyckoff 3 Comments

This Time’s Not Like Last Time

The market’s down; bonds down at the same time.

Wait, what?

If the Fed does not lower rates, then bonds risk a reversal to the downside (not advice, not a recommendation).

Of course, no one expects that to happen. No one.

Well, maybe there’s at least one, link here: 

‘No pivot anywhere in sight.’

Bad News, Bonds

It gets worse when looking at TLT. As we’ll see below, the chart has a (potential) repeating set-up, link here.

Long Bond Proxy TLT, Daily

The set-up is not complete and may well diffuse into nothing.

However, if it does not and we get back below the magenta resistance line, there’s likely to be some serious confusion in the markets.

Wyckoff said a century ago, those incorrectly positioned in the market, provide the fuel (as they panic and exit) for a directional move.

Just think about who’s (potentially) on the wrong side and what side that is, i.e., the bullish side.

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

The Usual Suspects

December 16, 2023 By in $SPSIBI, AMT, Biotech, BOIL, Bonds, CVNA, DRI, Federal Reserve, Food Supply, Genesis 41, GLD, Gold & Silver, Gold Miners, IYR, LABD, Natural Gas, Real Estate, Semiconductors, SLV, SOXS, SOXX, SPBIO, TBT, TLT, Uneducated Economist, UNG, Usual Suspects, WEAT, Wyckoff, XBI 1 Comment

Everything Happening At Once?

Not in any particular order; not advice and not a recommendation.

No 1. There (still) is no Fed Pivot. Seriously, have rates really, actually been lowered? Everyone has a huge case of ‘normalcy bias’. i.e., what the Fed did last time will happen this time.

The 40-year bond bull market from the 80’s, ended in 2020. We’re in a different paradigm now.

No. 2 Natual Gas UNG, is reversing. We’ll see whether or not there’s going to be a supply disruption.

No. 3 The semiconductors SOXX, now have a monthly bearish MACD divergence; daily and the weekly indicators posting even to prior tops (as of Friday’s close). 

No. 4 Components of biotech index XBI, are being shuffled around faster than deck chairs on the Titanic … or, the Olympic 🙂

Seems like a mad dash to add/remove, increase, reduce equities to prop things up. We’ll see how that turns out. Currently, XBI is right at resistance level, 86.50 – 87.0

Here’s just one example from an index, riddled with equities that have no P/E.

No. 5 Carvana is very close to posting new highs and potentially, running the stops.

No. 6 Has Darden Restaurants, topped out? 

The consumer is certainly tapped-out and no-one ‘needs’ a restaurant.

No. 7 Wheat is reversing; It is and has always been about the food supply.

No. 8 Gold, GLD, is currently not going higher (look at the divergences); silver (SLV) is in a major non-confirmation, down nearly – 55%, from all-time highs.

During the 1980s inflation, precious metals moved (upward) together.

Silver looks like it’s responding to the destruction/collapse of (economic) demand.

No. 9 American Tower (AMT), number two in the IYR index, posts a clear false breakout and reversal. 

If rates really are going (materially) lower, interest rate sensitive real estate should continue going higher, right?

No. 10 Which brings us to the bond market, TLT. 

Price action broke above established resistance, currently hovering above that level. 

It’s at The Danger Point®

We can see the set-up, a price action pattern repeated time and again, between the lower and upper blue lines, called a ‘Spring-to-Up-Thrust.

While the media laughs at the bears, let’s just see how this all works out.

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

Trading Channel Update, GDXJ

June 18, 2023 By in Edward Dowd, GDXJ, Gold & Silver, Gold Miners, JDST, Uneducated Economist 1 Comment

Price Action Itself, Defines The Levels

It’s time for an ‘adjustment’ to the trading channel identified in the prior update.

The Juniors GDXJ, are still in a downtrend.

Last Friday, they hit and retraced from the (adjusted) right side trading channel shown below.

The weekly MACD histogram (not shown) remains in a bearish divergence, indicating probabilities still favor the downside.

Price action will have to decisively break the downtrend to negate the bearish potential.

Junior Miners GDXJ, Daily Candle

From a trading perspective, existing short positions were closed out this past Friday and then re-established (partially) towards the end of the session (not advice, not a recommendation).

Dollar Death … Not Yet

Just like the A.I. propaganda, it’s popular to get hysterical about ‘de-dollarization’.

Two perspectives that are not part of the crowd are here and here.

They give a more sober look at what is really happening on a world-wide, dollar basis.

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

Dollar ‘Collapse’ … More Reality

May 21, 2023 By in China, Dollar, Uneducated Economist, UUP

It’s Scenario, No. 1

The last update on the dollar had three potential outcome scenarios.

No. 1

The dollar rallies from here; moving on to test the highs.

No. 2

The dollar continues lower, tests or penetrates the prior lows, then rallies in a Wyckoff spring to the highs and potentially higher.

No. 3

We really do get a collapse.

The dollar breaks the support area, comes back to test the underside and then heads lower.

Dollar UUP, Weekly Candle

The chart of the dollar (UUP) from the prior analysis is re-printed below.

Now, the updated chart

At this juncture, the dollar’s following Projection No. 1 (not advice, not a recommendation).

Dollar ‘Collapse’ … Where ???

This post just out from Uneducated Economist does a fantastic job of describing why the dollar has not only not collapsed but is strengthening.

The UUP chart above, confirms his assessment.

The other take-away from UE’s post is the absolute strategic nature of what’s going on.

Strategies playing out, years if not decades in the making.

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


Gold … Now, Comes Deflation

December 13, 2022 By in 1929, Biotech, GLD, LABD, LABD-22-14, Michael Cowan, SPBIO, Uneducated Economist, ZeroHedge 3 Comments

The ‘Pivot’, No One Expects

Happy days are here, again!

So, the Fed can pivot, and the bull’s on again.

At least, that’s what the media wants us to believe. The CPI is out, and ‘inflation’ has slowed.

The problem is, as Michael Cowan stated in this update (he’s done the work), from here, it does not matter what the Fed does.

The decline (crash) or whatever you want to call it, is baked in the cake.

Once deflationary forces start, it becomes a juggernaut.

The previous update on gold (GLD) showed in multiple time frames, upward thrust energy is dissipating; in at least one case, (weekly) it’s also divergent.

Now that we’ve had yet another blip higher, as expected, it’s rabid bullishness in the gold camp.

So, let’s look at what GLD, is actually doing. What does the market say about itself?

Gold (GLD), Daily

One thing is for sure; GLD, is at The Danger Point®

If GLD can’t hold above (and move above) this level, it may be in serious trouble.

Let’s look at it a different way … the terminating wedge.

A ‘wedge’ is typically the last pattern in a move up or down, hence the name.

As this post is being created (12:23 p.m., EST), GLD continues to decline from its open; currently sitting right at the resistance (potential support) level at the 168-area.

In a separate market, biotech SPBIO, has completely reversed its opening spike and is now posting lower.

We’re still maintaining the LABD-22-14 trade (not advice, not a recommendation).

Today’s CPI print and resulting price action, may be the kick-off to an overall sustained and persistent decline.

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.

The Danger Point®, trade mark: No. 6,505,279

Silver … Sold Out !

October 10, 2022 By in Dollar, Gold & Silver, Kitco, SD Buiilion, Silver Collapse, SLV, Spring-to-Up-Thrust, Uneducated Economist, Wyckoff

… And The Bulls Are Trapped

How is it possible to have silver stocks sold out here and here, yet silver bears have trapped the bulls.

As we’ll show below, this morning’s action in SLV, has confirmed the reversal; a Wyckoff up-thrust, pointing silver’s probability to lower levels.

For starters, let’s recap on how this (trading) game is played.

That is, the public i.e., the masses, need to be led to and fro so they are continuously on the wrong side of the trade.

That’s it.

So it is with precious metals and specifically silver.

The media came out recently, effectively telling everyone ‘Now is the time to buy gold’.

Where were these guys in 2001, when gold bottomed around $271/oz.

No, they show up at the end of the move … not the start.

Public Buys Hype, Not Facts

So the public has bought into the hype and run the silver coffers dry. Everyone excepts an immediate currency collapse and certainly anything can happen.

However, as Undedicated Economist points out, the dollar strength (first identified in this post) can last for years.

The original (bullish reversal) analysis is now supported by the facts; it’s been nearly two-years since that post and the dollar (UUP) is still headed higher.

So, let’s find out where silver is likely to go. For that, we go to the weekly chart.

Silver SLV, Weekly

The set-up, already posted; Spring-to-Up-Thrust.

It’s a repeating pattern found across the markets.

Price action gets itself into a spring condition by penetrating support which subsequently sets up the reversal; the up-thrust.

Next, we’ll use the Fibonacci Projection Tool, showing likely areas for downside destination.

A full 1 : 1 projection gets us right back to where we started the whole ‘short-squeeze’.

If SLV, gets back down to the 10.50 – 11.0, level, one can only imagine what type of hype will be in vogue.

However, at those levels, it’s reasonable to expect the local bullion dealer will be begging for sales … they might even offer their product at, or near, spot. 🙂

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.

The Danger Point®, trade mark: No. 6,505,279

Weekly, Wrap-Up

May 16, 2022 By in DRV, DRV-22-02, Epoch Times, Genesis 41, I Allegedly, ice-age-farmer, IYR, King James, Real Estate, S&P, S&P 500, Scott Walters, The Speck, Uneducated Economist, Usual Suspects, Weekly Wrap-Up, ZeroHedge

The Usual Suspects

Bogart

No. 1

Airplanes Dropping Like Flies.

A very brief search of the most recent crashes or incidents are here, here, here, here, here, and here.

It’s all just a coincidence or maybe it’s because of this.

The repercussions of on-going events are just getting started.

This is a long-haul chess game.

No. 2

Americans Take Up The Gauntlet … Go To Vegas

What a pathetic bunch of cowards.

If you’re blowing whatever’s left of your money (or credit), it’s likely you have no real marketable (high pay) skills, no talent, lazy, obese; so, we’re off to Vegas.

Add to that, we’re just at the start of the depression.

Patera, from Appalachia’s Homestead (time stamp 4:24) addresses the problem a little differently but her final assessment is the same.

It’s true, there are some barriers to learning a new skill.

Dan from i-Allegedly points out the high cost to get a CDL, to be a trucker.

However, those who are awake, those with their nose in the KJV Bible, those leaving the corrupt church (in droves), knew that current events were coming; they took action way before it became obvious.

Remember this post?

It’s been nearly two years, to the day.

No. 3

Deflation Indicators

Not all prices are rising.

As the real estate sector gets vaporized, we have the natural fall-out, building materials dropping in price.

Uneducated Economist reports here, that’s exactly what’s happening.

Price reductions as we’re going into the summer building season, is a massive indicator of evaporating demand.

No. 4

Food First … Then Gold & Silver

Everything is going according to (their) plan.

Yet another indicator of the current strange weather (warfare) that’s going to strain the system.

Here’s the link to the very first post that specifically referenced Genesis 41; posted on December 31, 2020.

As with the ‘Mask on, Mask off (linked above), how has the post aged?

Is it still relevant?

What about this quote … seemed extreme at the time.

They paid for the corn first, with gold and silver.  Then they paid with their livestock.  Then they paid by selling themselves into life-long slavery. We can equate that last part (slavery) as getting the vax.

No. 5

Chess Board Strategy

It’s a bitter pill to realize we’re in the long game. ‘Normal’, is not coming back … ever.

That does not mean there’re no opportunities. There are.

Those opportunities (if we survive) are/will be potentially life changing for the good.

The Sunday futures market opened about two hours ago and we’re up around +0.40%, in the S&P.

Let’s see if that spills over to the Monday open; remembering that we’re short the real estate sector with the finger on the sell trigger (not advice, not a recommendation).

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.

The Danger Point®, trade mark: No. 6,505,279