Gold (GDX) Bulls … Time To Hide?

Late Session

GDX Breakdown, Draws Nigh?

We’re not there yet and anything can happen in the meantime.

However, Senior Miner’s GDX, price action has moved lower during this session as expected.

Today has offered up one more clue for the bears provided GDX closes lower.

That is, we may have a channel confirmation:

Fibonacci time sequences are not necessarily always at price extremes. As shown above, they can define the width of a trading channel as well.

If this short (sell) set-up fails (GDX moves higher), we now have a definitive stop area for inverse fund DUST (not advice, not a recommendation); somewhere around: DUST 19.80 – 20.00.

Steven Van Metre in his last update, gave data on how the dollar is in a rally and nearing breakout position.

So far, there’s still a negative correlation between the dollar, gold, and gold miners.

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.

Random Notes

The Usual Suspects For The Week

No. 1

Hey Dan … ‘Dude, Your Posts Are Getting So Dark’

Not sure what these snowflakes are expecting; Dan is one of the more positive ones.

Maybe they still think they’re going to watch the market and societal collapse from the comforts of their own back yard.

No. 2

School’s In Session: Bring Out The Masks!

This time around, it’s different. Even deep in the heart of the gulag, it looks like there’s an awakening.

This link is from a board meeting in San Diego

No. 3

Just 15-Days To Go

Before the end of speck ‘assistance‘.

That assistance ends September 6th, which is the Monday after Labor Day.

The Monday after Labor Day 1929, was the market peak.

No. 4

One Of Their Own!

You’re part of the ruling class. You were told you’re just going to get ‘saline’.

But then, you spot one of your comrades (that was in line with you) coming down with this

No. 5

In Good Company

Steven Van Metre comes out with his Sunday Night Charts …. and at time stamp 10:54, his conclusion is the same as yesterday’s report.

Gold and the miners ‘on the edge of an abyss’.

No. 6

Defining Moment In History

Jimmy Carter had this image to define is impotent presidency; so too now, we have this image to define an incompetent, not even a presidency.

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.

Russell … Rolling Over

Bearish Wedge Poised To Break Down

The Russell 2000 (IWM as proxy) has been congesting sideways for about five months.

While the overall markets, S&P, Dow, SOXX, IYR and the QQQs, have been moving on to new highs … the Russell has stagnated.

Taking a cue from Steven Van Metre’s reports on ‘who goes first’ in a downturn, it’s the small caps.

At this juncture, it looks like the Russell’s ready.

The six month daily chart of IWM below, shows choppy action.

Pulling back somewhat and labeling the bearish wedge, puts it into perspective (second chart):

Pulling out and labeling the wedge:

One item of note (not shown) at the top of the wedge, where price action pivoted lower (August 6th), is a Fibonacci 62%, retrace level.

So, we have a bearish wedge retracing 62% … along with non-confirmation of the overall highs; S&P, Dow, SOXX, etc.

Major reversals take a long time to form. However, once they get underway, it’s like a juggernaut to the bottom.

Harkening back to the oil (USO) bear market of 2014, nearly all (if not all) the YouTuber’s at the time, completely missed the bearish set-up.

What they did instead, once the downdraft started, was pump out update after update about ‘catching the bottom and setting up for the new bull market in oil’.

It never happened.

Oil continued lower for a year and a half before getting into a sideways range.

The big money’s in the big move. Monitoring the Russell provides confirmation a significant reversal’s in the works (not advice, not a recommendation).

As with biotech (SPBIO), already in a bear market, the IWM could break lower while the overall markets continue to thin-out and even make new highs.

Recall, we’re getting close to an up-coming holiday: Labor Day

The 1929, high was on the Tuesday just after Labor Day weekend.

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.

Biotech Breaking Down

10:57 a.m., EST

SPBIO, Biotech Verifies Channel

Inverse LABD, Moving Higher

Biotech (IBB, MRNA, SPBIO): Analysis

Looking over the updates of the past few weeks, you can see how the LABD channel (above) was formed.

The trend has repeated with successive moves higher and the right side channel line moved as a result of price action.

At this point, we may be there.

If LABD closes the day at its current location or higher, it’s a good sign of channel confirmation.

In addition, we have Moderna (MRNA) in the process of penetrating the trendline shown in yesterday’s update. If price action continues lower (as it’s doing in the early session), it could be on track to post a weekly reversal.

Separately, the IBB (ETF) index is already posting a weekly reversal. From a momentum standpoint, the new weekly high of IBB, has put that index in a potential bearish (MACD) divergence provided it closes lower from here for the week.

Positioning:

The bearish case has been building even back to David Stockman’s assessment of ‘2-Trillion Dollars of Bottled Air’, during the summer of 2015.

However, Stockman does not trade. So, to figure out if ‘this is it’, is not in his repertoire.

With current events as they are, one can intuitively conclude the fundamentals have not improved for the sector.

The backdrop is there for significant downside.

With that in mind my firm remains positioned max short (not advice, not a recommendation).

Any selling in LABD that’s occurred over the past month or so, was to adjust account(s) for maintenance (margin) requirements.

Once the index was finished with its adverse (SPBIO, higher, LABD lower) moves, we’re right back to establishing a full position.

This type of action has been going on for months.

It’s tedious and not exciting; exactly the opposite of what a typical YouTube viewer is looking for.

As a corollary, there’s no artificial (and profit limiting) requirement to show ‘Monthly’, Quarterly’ or whatever gains, to retail customers.

The financial press takes care of the retail side.

Some (very few) actually escape; finding themselves on sites like Van Metre’s, Weis’, and this one.

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.

Gold, mini Flash-Crash

10:23 a.m., EST

Livermore:

‘Surprises are in the direction of trend’

The following quote is from this past Saturday’s update:

“It’s no secret, price action in GLD and the miners (GDX, GDXJ), has been analyzed for months as bearish.

The weekly chart shows GLD, right at the edge of a terminating wedge; about to break lower:”

Then, we can also add this quote from the GDX Short Sell, Set-Up:

“This site’s not part of the hyperinflation crowd. It’s too easy to jump on the bandwagon, get the clicks and then say it’s all ‘manipulated’ when price action does not follow the narrative.”

A firm foundation has already been laid; a bearish case for gold (the miners and silver) that includes the inverse correlation of a bullish dollar.

Both moves are currently underway.

Steven Van Metre, followed-on; highlighting the bearish gold set-up in his ‘Sunday Night Charts‘ update.

As is typical, there’s a small cadre that can see what’s happening. They are somehow able to ignore the constant media hype; positioning accordingly.

The original weekly chart of GLD below, is followed by today’s update:

Updated chart:

Typical market behavior is to break through the trend (for however long) and then come back for an underside test.

It seems that anything related to the gold (silver) markets is an overcrowded trade. There are too many rabid bullish fanatics.

We’ll stand on the sidelines for this one (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.

Biotech Reversal, Repeating Trend

9:45 a.m, EST

Price action itself defines the trend

The unmarked hourly chart (above) of inverse fund LABD, shows the location of the last update.

That update called for LABD to reverse higher; based on thrust action of the market itself.

Soon after (magenta arrow), LABD pivoted higher.

The right side action has a familiar repeating trend:

The chart below is a compressed version.

The repeating lines have been added. Arrows show contact points:

Strictly as a courtesy, daily chart of LABD is below with notations of buy and sell (not advice, not a recommendation) for my firm’s main account.

A good many that monitor this site have probably become bored with biotech … just as they did with Steven Van Metre’s analysis of bonds (back at the lows).

Van Metre is providing an excellent service. True, he probably has people moving their accounts to him. He’s running a business after all.

However, that does not negate the fact, he’s one of, if not the only one saying that we’re about to enter a deflationary environment (if not just temporally); complete opposite the conformist (and media led) crowd of hyper-inflationists.

Even Johnny Bravo has said, ‘hyper-inflation will come … but when?’

Summary:

The short positioning in biotech (via LABD) continues: Not advice, not a recommendation.

Rumors are swirling now about power outages and cyber attacks with major corporation website shut-downs.

Does anyone really want be to playing around with long positions when torpedoes (to hit the market) are already in the water?

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.

‘Read My Lips …’

3:21 p.m., EST

No More High Prices

This article, just out from ZeroHedge, says ‘consumers’ are in a revolt.

No more high prices.

Buying plans for the major items, housing, auto, appliances has declined dramatically.

One chart, linked here, shows consumer complaints about high prices are the most since the data started … 1961.

The reality is the retail consumer has come to the end of the rope.

To loosely quote Von Mises; ‘If you don’t voluntarily get your spending under control … the market will do it for you.’

To quote another financial source, Steven Van Metre; he has discussed for months, that high prices will be rejected. The economy will contract and bond prices will rise.

Bonds have indeed gone up in anticipation of contraction; or forecasting an outright collapse.

Throw into the mix that we’re going to have some kind of ‘fatality event’ this coming winter; for sure, there won’t be much demand for high priced items … just from the contraction of the population itself.

Which brings us to biotech (SPBIO).

SPBIO (LABD) Analysis:

The unmarked chart of inverse fund LABD is first (just to give perspective):

Next we’ll show that LABD has or is testing support and at the same time, confirming a trendline:

Biotech is the downside leader … sometimes tag-teaming with gold but for the most part it’s biotech.

Positioning:

It’s no secret I have positioned my firm short this sector in a big way since April of this year (not advice, not a recommendation).

That position has been adjusted over the months but has been steadily increased since the intermediate low on June 28th.

Since that low, the position has been increased six times (including yesterday) and may also be done so today.

Summary:

Once again, we’re heading into the weekend. The S&P (SPY) has just printed ‘out-side-down’.

Anyone still want to hold long the market?

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.

Garbage In … Garbage Out

10:49 a.m., EST

Another day spent digging in the trash

This morning’s perusal through the usual suspects of finance, leaves the feeling you’re sifting through garbage.

Every once in a while, like yesterday’s post, there’s something useful.

Most times, not.

Today is no different.

Here we have an article about the ‘bond bloodbath’ and how inflation is not transitory.

Instead of falling into the trap of contesting the current false narrative, we’ll take a different approach.

How can the constant stream of financial nonsense, lies and miss-direction, be put to use?

Since the article linked above is about bonds, we’ll use that for our example.

The Bond Market (TLT):

First, the David Weis training video (linked here) has been discussed many times over the years.

We can’t make recommendations but we will make a suggestion; that is, whatever the video costs at this point is well worth it.

Our TLT market entry technique (below), is taken from that video (not advice, not a recommendation).

We’ll start with an unmarked chart of TLT. The ‘bloodbath’ referred to in the link above, is yesterday’s down-draft.

Steven Van Metre has already laid the fundamental groundwork (for about a year) on why bonds will rally.

We’re there now but the market’s not going to let anyone get positioned long easily.

The next chart shows how the Weis technique can be used to get aboard the rally.

Yesterday’s so-called bloodbath, is really a trade entry set-up.

Notice how the market does not come back to the ‘entry’ levels. This chart fits the Weis example to perfection.

The bond market’s signaling there’s something very wrong with the ‘reflation’ or ‘re-opening’ trade.

The reflation, re-opening does not exist.

The economy is not coming back.

Summary:

It took over twenty years of searching to stumble across the Weis video. As with a lot of things in life, it was almost by accident.

After watching him dissect the ‘Apache Spring’ (APA) trade, it was obvious the search for ‘truth’ had ended; the education was about to begin.

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.

Random Notes

The usual suspects for the week

No. 1

The market does not ‘have’ to do anything.

Here’s a link to a Zerohedge report letting us know why the market ‘has to cover shorts‘ and move higher this coming week.

The reason retail money managers, pundits and the financial press don’t focus on price action and volume (a life-long pursuit of mastery), is because it’s hard.

As the late David Weis said:

‘There’s a lot to this game of reading the chart.’

Just as Steven Van Metre has drilled down into perfecting his style of bond ‘macro’ management, so too has this site drilled down into the nuance of volume and price action.

That in turn, is coupled with the externals (the ‘macro’, if you will) of sentiment and fundamentals.

It’s more art and intuition than science.

That’s a good thing.

The pointy headed ‘quants’, can’t quantify intuition.

The market (which is thinning out as we speak) may indeed rise this coming week. However, if it does, it won’t be because it ‘has’ to.

No. 2

The ‘knock at the door’

Awaken With JP has a humorous but educational approach on how to help those who want to ‘help’ us.

No. 3

Get the ethanol out

Here’s a brief video on how to get the ethanol out of gasoline.

Once that’s out, you’ll need octane boost. This seems to be highly rated stuff.

No. 4

Grow and store your own. Food, that is.

In this report from iceagefarmer, the picture at time stamp 10:27, should dispel all illusion. ‘Shaking hands with Klaus’.

At time stamp 16:02, notice how many farmers have been notified.

Once awake, anomalies like these ‘numbers’ are spotted instantly. It serves to remind us, who is ‘of this world’.

My kingdom is not of this world

No. 5

Brew your own. Beer, that is.

At this point in time and with global shutdowns on the horizon again, maybe we just brew our own.

I have purchased the exact kit shown in the link.

Report on the results to follow.

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.

Deep Dive: Gold Reversal

Gold Miner’s GDX

Fibonacci Projection

Rule of Alternation

Wyckoff analysis was used to identify the GDX up-thrust, reversal condition.

Nine trading days later, GDX is down a stiff -11.7%, from the analysis location.

It’s down -14.9% from its interim high set on May 19th.

What happens next?

This site offers a different perspective (more thoughtful, perhaps) than ‘stacking’ precious metals as high as possible.

Thoughts such as, major infrastructure disruptions (and more) are likely:

That includes nationwide power outages, food transport interruptions (or cancelled outright) along with massive ‘speck’ injected casualties (estimated past 100,000), see this report.

The very last thing you’ll need in that environment, is a stack of metal (not advice, not a recommendation).

Personal anecdote, skip to GDX Chart, if not interested.

These updates are originating from the North-Central area of Texas (DFW). When the historic cold snap rolled through this past February, the power went out repeatedly.

The first thought was not: “I’m sure glad I have my stack of silver to get me through”

No. The thinking was (in this order):

Food, water (water was second as there was plenty of it just outside as snow), munitions and ‘delivery mechanisms’, cash in case the gas station was operational … which is was not and then lastly, heat.

The location was using natural gas for heating and was available as long as there was power

Precious metals were nowhere on the list … not even considered. They had nothing to do with the situation at hand.

Precious metals come later … after the famine.

GDX Chart:

The original analysis from June 8th, is below:

Subsequent trade action (including the original notes):

Weekly chart showing Fibonacci downside projection to level(s) mentioned frequently by Steven Van Metre.

In the chart above, note the choppy action leading down to the most recent upside pivot (early March). That area expanded below:

If we’re in a reversal to much lower levels, the market tends to alternate.

It was choppy and overlapping action from the highs in August of ’20 to the March ’21, low.

Thus far at the pivot high in late May, its been essentially straight down.

With the planned outages discussed above, precious metals may become (temporarily) irrelevant.

If or when that happens, it may be time to consider a ‘stack’.

Of course, by then, no one will want to buy (and spend their worthless fiat cash) for risk of starving to death. This is how markets work.

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.