Mid-Air
This could be all there is for the SOXX.
If price action can’t continue higher from here, we could have a significant reversal (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
The Real Story
If there’s any one interview that details what’s really going on, it’s this, link here.
The 48-mintue Kitco session with Bert Dohmen, is much needed straight talk.
It’s all there:
Official data is fake. Markets will (likely) ‘trap’ bulls with massive gap-down. It’s 1929 (again). Crypto is an illusion. Silver/Gold will correct (temporarily) along with the markets. We’re surrounded by bought off media. The population (masses) don’t think or can’t think.
Adding to that are ideas and sources discussed for years on this site, like ShadowStats having ‘real’ data on unemployment and inflation.
The list goes on.
With all that said, let’s look at one of the sectors (retail brokers), that could be hit hard during a surprise downturn.
Robinhood HOOD, Daily
It’s important to note, price action late Friday, began to pull away from the lows … rising into the close.
Just after that close, the announcement, HOOD made it to the S&P.
Wyckoff said a century ago:
‘Somebody always knows something. That ‘something’ shows up on the tape’
Well, there it is.
Was yesterday (the start of) a blow-off?
Froce Index (thrust) was the largest since the IPO, trading on August 4th, of 2021.
Price action is currently (as of 11:58 a.m., EST) retreating off the highs.
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The Danger Point®, trade mark: No. 6,505,279
Well, Except for HOOD
Long bonds TLT, have launched higher four consecutive sessions; yields lower.
Two major brokers, Schwab and Interactive, appear to have tested (or, are testing) their Friday breakdown.
Robinhood bucked the trend, closing at all-time highs.
That puts HOOD, in potential Wyckoff ‘up-thrust’ (reversal) position (not advice, not a recommendation).
Note: The S&P did not post new highs. Last Friday’s all-time high, remains intact.
Charts to follow.
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The Danger Point®, trade mark: No. 6,505,279
Big Reversal?
It was a very busy Friday, hence the reason for the late update.
One short position closed (SOXS-25-10) and five more opened.
Cisco Systems was one of those five (not advice, not a recommendation).
Earnings for CSCO, were released in mid-august; market reaction was a swift move lower.
From the earnings, everything seems to be good.
However, at this juncture, that’s not what the market is saying (at least for now).
Cisco Systems CSCO, Daily
Note:
As a general rule (for my firm), on any initial position, the implied stop for that position is that day’s session high or low depending on long or short.
In the case above, that means a ‘buy-to-cover’ stop at the day’s high of CSCO 68.10 (not advice, not a recommendation).
Other (short) positions to be reviewed over the weekend.
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The Danger Point®, trade mark: No. 6,505,279
… And The Hard Place
As the chart shows, the SOXX has been struggling for weeks in the resistance zone.
From that chart, one question to be asked, did the overnight and early session fill the gap?
The other question, did the Nvidia earnings release change the dynamic of the sector?
Reading price action since then, in real time, the answer seems to be yes (not advice, not a recommendation).
Semiconductors SOXX, Weekly
As of this post (10:35, a.m., EST), the SOXX is struggling to post higher … but it’s not happening.
There’s a lot of congestion around the resistance zone. In Wyckoff terms, he calls this price action ‘Cause’.
Meaning, that if we break materially lower from here, it’s called ‘Effect’.
His point being, since there’s sufficient cause for a sustained move, if/when it happens, we’re to expect a corresponding effect (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Hit on Both Sides
From a $100,000 Jeep Grand Wagoneer to no-bids on used cars at auction, the car market’s getting hit from both sides.
While Carvana rival CarMax, reached all-time highs long ago, now down -60.34%, for whatever reason, Carvana remains a ‘mystery’.
Carvana CVNA, Daily
The horizontal line is the prior all-time high (376.83), set way back on August 10th, of 2021.
Up-thrust close high, to test close high, Fibonacci 21-Days.
From August 20th low, to test print high (Friday), Fibonacci 8-Days, putting CVNA, at 61.8%, retrace (not shown).
Positioning
Friday’s new daily low was the signal to go short. However, that short was not entered immediately.
Instead, we wait. The objective is to minimize the risk as much as possible.
Late in the session, 3:57 p.m., EST, short opened at 371.6412, with stop at the session high (378.54), for total ‘risk’ of 6.90-pts (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Waiting for The Break
The question (always) is:
‘How long can this last?’
From a comment on this post, to this from ZeroHedge, now this from MarketWatch, it’s not too much of a stretch to say that things are … well, ‘stretched’.
Today is ‘Day 13’, from the last Nvidia all-time high; let’s look and see if we might get another all-time high.
Nvidia NVDA, Daily
We’re just a few minutes before the open.
We see the ‘spring’ set-up that’s been in effect over the past six trading days.
Will this spring lead to an up-thrust? Potentially the top?
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The Danger Point®, trade mark: No. 6,505,279
The Big Picture
Each market session provides another data point, bull, bear, or congestion.
Yesterday’s position in XLF, was stopped out the same day with a minuscule loss.
That trade was an excellent example of operating at the market’s edge and maintaining discipline.
Another data point.
However, one market not making new highs, or threatening the current short position (yet), was biotech, XBI; short trade XBI-25-03.
So, let’s take a look at what’s really going on.
Biotech Sector SPBIO, Daily Close
We’re far away from all-time highs.
The Fibonacci retracements are shown.
At this point, we’re oscillating around the 23.6%, and in up-thrust condition.
The second chart zooms-in on the set-up.
Set-ups don’t guarantee anything.
They just mean the market has reached a point where risk could be at a minimum.
Bull or Bear
With the SPBIO (XBI as the proxy), we either have a breakout above resistance or an up-thrust as previously mentioned.
Until the market proves otherwise by making new daily highs, the condition continues to be traded as a potential (significant) downside reversal (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
At The Edge
The last update on Financial Sector, XLF, said it was in potential up-thrust (false breakout) condition.
Monday’s action was slightly down and today; we have a new daily low.
In addition, as we’ll see in the chart, all of this action is taking place below established resistance.
Financial Sector XLF, Daily
We’re at the ‘edge of the lake’, as David Weis used to call it. This is where the risk of being wrong is least.
Since the market’s posted a new daily low, risk on a short position is well defined, i.e. yesterday’s high (not advice, not a recommendation).
Currently short this sector as XLF-25-06, with stop in the vicinity of XLF 53.58. After the close of this session, the stop (if not exceeded) will be moved lower to the high of today’s session (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
SOXX Closed, DAL Closed XBI, Open
What we’re looking for from a short-side perspective, is ‘ease-of-movement’, downward.
Today, only one sector that’s currently being followed exhibited downside ease: Biotech, XBI.
To recap the situation with XBI, were in Wyckoff up-thrust position, first discussed here, then here and here.
Positioning
As stated in the header, SOXX-25-12, DAL-25-03, have been closed.
Biotech (short) XBI-25-03, opened with a stop at the session high (not advice, not a recommendation).
Charts to follow.
Stay Tuned
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The Danger Point®, trade mark: No. 6,505,279
The Danger Point® 