Moderna (injections) Suspended

Biotech, Bricks In The Wall

Complete Implosion.

This site’s been steadfast for over a year; biotech above all others, has the highest chance of sustained, long-term collapse.

‘Collapse’ is an overused word these days. It may have lost some meaning.

How about the word ‘exposure‘?

Biotech has the highest chance of being exposed (not advice, not a recommendation).

Sweden Suspends Moderna:

There it is out in the mainstream: Indefinite suspension.

About a week ago, the fist bullet item in this list discussed Moderna; that when price action reverses to the down-side (after being a market darling), the lawsuits start.

It’s not the lawsuits themselves, but the discovery process that’s part of the trial … if it goes to trial.

One can guess with some assurance, the last thing Moderna wants is for this baby (any potential lawsuit) to go to discovery and trial.

This could be one of those times, popcorn is justified; watching it all from the sidelines.

Southwest Backs Off:

Looks like greed is more powerful than jabs.

At least we can see the priorities and keep that for future reference.

Now, all-of-a-sudden, it makes no sense to destroy executive stock options with forced collapse of the organization.

Glad we have such genius executives in charge. 🙂

Meanwhile, Back At The Ranch:

While all that’s going on, we still have the financial press talking about earnings and sales and ‘pent up demand’ like any of that is important or actually real.

The only reality at this point in time, is the price.

Biotech SPBIO, Inverse Fund LABD Analysis:

We’re going to start with the un-marked chart of SPBIO:

Next, we’re going to invert that chart; giving a better perspective of what the inverse fund LABD, is tracking:

Repeating a previous observation; price action over the last two months (from late August to now), has calmed down.

Price range has narrowed and movement looks orderly.

Our take on this; bears have assumed control and are preparing (opening positions) for a directional move.

Compared to my firm and probably anyone reading, their capital is unlimited. They’re also patient.

Depending on the level of greed, they’re keeping price action from a major breakout until positioning is complete (not advice, not a recommendation).

Wyckoff termed this phenomenon (a century ago) as the ‘composite operator’, or the ‘central mind’.

This is how markets work. There’s no getting away from it.

By making a transaction, any transaction, one has implicitly entered the ‘arena’ where the gladiators (the professionals) are ready to take all you own.

Moving in a little closer, we already have a trend.

Price action bounced off support on Friday (resistance on the inverted chart) but closed nearly unchanged.

Summary:

When you have satire like this and especially at time stamp 6:35, the pressure continues to build … almost from all sides.

My firm remains short SPBIO via LABD (not advice, not a recommendation).

That is, until the market itself says the bearish analysis is wrong or it’s time to exit.

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.

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

Shifting Sand

Or … How To Spot A Change Of Character

Art & Science: Interpreting price action requires both.

Since the September 2nd, high in biotech SPBIO and low for inverse LABD, the character of the market has changed.

Price action has become tight and orderly.

Typically, when that happens, someone (some entity) is gaining control. They are preparing the market for a directional move.

That’s the science part; the observation part.

Art is ephemeral. You don’t know if it matters to the subject at hand or not.

You won’t know until it becomes obvious.

In the markets, when it’s obvious, it’s too late.

News Of Note:

Within the past few days, there have been at least two news stories of note: Here and here.

It’s not really the stories themselves but what they represent.

Go to time stamp 8:10, at this link. That’s what it’s about.

The so-called controlling entities may be in the early stages of consuming each other.

What does that have to do the the markets and specifically biotech? Those thinking they were safe and getting fake ‘protection’ could be realizing, maybe they didn’t.

Maybe it was the real thing.

Mid Session:

SPBIO (Inverse, LABD):

The market’s had a change in character.

Whether or not the above links were the reason, just part of the reason or not at all, won’t be known until long after the market opportunity has passed.

We’ll start with the un-marked daily chart of leveraged inverse fund LABD:

Tight price action identified:

Now, it gets interesting.

We’ll zoom in on part of the tight area using the hourly chart:

LABD has oscillated around support and then penetrated that support as shown.

Price action rose dramatically from there. We’ll label it as a sign of demand (Wyckoff term).

Next, we have the testing action. David Weis used to call it “The Gut Check”.

Tests can either pass or fail. That currently puts LABD at the danger point.

Positioning:

My firm’s position remains unchanged: Short biotech via LABD (not advice, not a recommendation).

Summary:

As this post is being created, LABD is moving up off the test lows. So far, overall price action has been well behaved.

Thus far, there has been no major (news generating) price break.

That type of controlled movement allows large positions to be built carefully and quietly (not advice not a recommendation).

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.

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

It’s Your Fault !

‘You’re The Problem’

Here’s one guy that finally figured out gold’s not moving higher as expected (as he has been touting) in anticipation of ‘rampant’ inflation.

As a reminder, this site stated from the outset, there’s little-to-no inflation.

Prices going up are the result, in large part from the intentional destruction of the supply chain.

Why that’s happening is a topic for another time. One clue is, if you’re starving, you’ll do whatever you’re told.

However, let’s not digress.

So, what’s the reason gold (and silver) are not moving higher? Well, that’s easy:

It’s because of you!

Yes, you the ‘investor’ are the problem. You are the reason that gold and the mining stocks are not moving higher.

You can’t make this stuff up.

Since he (Schiff) ‘put it out there’, his reasons are fair game for discussion.

Performing A Public Service:

In a way, the linked article is a fantastic public service.

Just like the biotech sector intentionally euthanizing (a polite word for what’s really happening) its customer base, here we have another entity calling out its own followers as the problem.

It’s similar to the rabid, mindless, one-way (only goes up) gold bulls crying ‘it’s all rigged’, when their pathetic attempts at analysis don’t work out; we now have another entity citing YOU as the problem when the forecasts fall flat.

This is yet another so-called financial source that can be permanently crossed off the watch list.

Brutal, But Beneficial:

Admittedly, the ‘tone’ of the posts on this site are not for everyone.

Even mild-mannered Dan at I Allegedly, finds himself responding to snowflakes that complain about his ‘get ready’ posts.

There’s good reason why the average are so ignorant.

For those who were actually listening in middle-school, the history books conveniently leave out the part where millions of Americans died of starvation during the Great Depression.

No pictures of emaciated bodies. Nothing.

With what’s coming, we’re likely headed for mass casualties in one form or another. The financial community refuses (from what I’ve seen) to discuss this up-coming event.

For example:

If you’re still using a ‘financial advisor’ and they’re not talking about, or don’t know about the elephant, do you really want to be (paying for and) taking direction from someone who’s that lazy, fearful, or ignorant?

Prechter, said it himself when he stated, the next mega bear market’s going to wipe out the ‘wealth management’ industry.

We may be on the cusp of that now.

Not Advice:

With that said, this site does not, and will not give financial advice.

Each person has his (her) own situation in life. You are the one to decide on your next direction or action.

What this site does do, is attempt to provide analysis and supporting price action data on what’s really going on.

What’s the market saying about itself?

If you’re still reading, that was a very long intro to get to our topic for the day: Gold miners, GDX.

Wyckoff Analysis: Senior Miners, GDX

What we see from the weekly chart is straightforward.

GDX, has been channeling lower for about a year:

The next chart shows we’ve penetrated support and are now testing the underside.

Of note: GDX is in ‘spring’ position. An upward attempt is to be expected.

If GDX was to break out and start a sustained bull move, this would be the spot. We’re at the danger point.

In my view, the participants in this sector are borderline delusional, if not completely insane.

They disregard what the market’s actually doing; holding to a (so far, for years now) unverified belief that ‘$10,000/oz gold, is just around the corner.’

It could very well be … but only after the (possibly, soon to be) starving stackers have sold off their hoard to buy food.

One has to wrap their mind around the fact, we’re being subjected to a long term diabolical plan.

Thinking and acting with that long game in mind (in my view) provides at least a hope for not only survival, but positioning to prosper during the on-going collapse.

Lastly, here’s a link to a previous analysis on GDX.

Decide for yourself whether or not that information provided a service and/or was useful and timely.

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, Trending Lower

Early Session

The Lies And Reality, Don’t Match

You would think with all the announcements about corporations (forcing) their employees to become ‘fully protected’, the biotech sector would be launching higher.

After all, that sector’s about to get a massive increase in revenue as the major players continue on with their ‘protection’ plan.

Just yesterday, late in the day was this announcement.

Looks like 1,400 non-compliant, undesirables have been dealt with.

Let’s do some math.

If that was 2% of the workforce, that means just for this employer alone, approximately 68,600 (subtracting 1,400 from 70,000) have now received a ‘bonus’ from the company.

If the scientific (real science) estimates are correct, the ‘elephant‘ will begin to kick in within six months and be fully effective (terminal) within five years.

This example is not the only one … Southwest Airlines just announced a similar push; fully ‘protected’ by the end of the year.

With all this good news, one would expect the biotech sector (SPBIO) to be launching higher in an unstoppable rally.

Um, no.

Let’s take a look at what’s really going on with the price action.

SPBIO (and 3X inverse, LABD):

We’re going to use the 3X inverse SPBIO fund LABD, for our analysis.

We’re about 30-minutes past the open and SPBIO, is heading lower with inverse LABD, moving higher:

We’re going to digress just a bit; updating on the ‘alternating’ action discussed in this update.

Price action above, is choppy and overlapping. That’s different from what we see now:

With all that being said, it’s possible LABD, has just confirmed the right side of a trend-line:

As a reminder, biotech (SPBIO) is the only major index that just finished three down quarters in a row.

If current action continues … it’s on track to make it four.

Wyckoff said it a century ago:

‘Somebody always knows something. That something, is reflected in the tape (price action)’.

The lies and reality don’t match. Biotech is losing steam … possibly in anticipation of an ‘event’ of some kind.

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 Dollar Ruse

What if it’s all a lie?

It seems that its been going on forever we’ve heard phrases like: ‘dollar destruction’, ‘gold’s going to $10,000,/oz’., ‘rampant inflation’, ‘hyperinflation’ and on.

What if (speculated in yesterday’s post), it’s all a lie?

It takes a very flexible mind (technically termed, “neural plasticity”) to be able to wrap itself around and understand the diabolical agenda being played out before us.

The good news is, Wyckoff analysis cuts through all the lies.

Now past a century old, this technique has stood the test of time.

Which brings us to the dollar.

Dollar Destruction: Just Another Lie

Reminder: Way back in late December of 2020, was the first bullish update on the dollar.

The next chart shows UUP, may be in a trend and just about to contact overhead resistance.

We’ll investigate further how UUP behaves if and when it gets into the resistance area.

One thing about the dollar that’s obvious from the chart, it’s not going down.

At this juncture, there’s no dollar destruction.

The dollar and gold are still inversely correlated.

That means continued downward pressure on the metals and upward pressure on the dollar.

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.

Bonds … Kabuki Theater

Early Session

What Is The Bond Market Saying About Itself?

With all the media press and hype, you would think bond yields have just spiked above 15%.

We have to remind ourselves that everything, that is, every move, every press release, every interview, is controlled.

Controlled for the purpose of “deception” as Livermore put it during an interview with Wyckoff in 1921.

With that in mind, who stands to benefit from the sharp move lower in bonds?

Seems like the obvious answer is, the short-term shorts and the longer-term bulls; especially if the hapless ‘hedge funds’ have jumped on the band wagon to short the market.

Bond (TLT) Analysis:

What Is The Market Saying About Itself?

The sharp move lower over the past four trading sessions, has likely cleared out the weak hands and emboldened the shorts to short some more.

The problem is (for the bears), we’re at a 50% retrace of the March 18th low. In addition, price action has just penetrated well known support.

That puts the bond market (TLT) in spring position.

We can see from today’s open, TLT is gap-higher and now, just below the support level.

We’re at the danger point, where the risk of going long is least (not advice, not a recommendation).

Because the four-day down-draft was so swift, don’t expect TLT to launch into an instant and sustained rally.

There may be quite a bit of testing (if and) before this market heads higher.

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 (GDX) Bulls … Exhausted?

Mid-Session

Intraday Hourly GDX Reversal: Signs of Trouble?

It took one more day than expected.

With a slight new daily high, we’re potentially at the end of the GDX rally.

It should be noted: The past two weeks of trading have stayed within the price extremes of the wide bar posted during the week of August 20th.

This is called ‘inside action’; typically signaling preparation for the next phase … whether up or down.

Note, the inverse fund DUST pushed just 0.02 points (DUST, 19.78) below our stop level (not advice, not a recommendation).

That position was elected to be maintained … we’re still short.

The hourly unmarked chart of GDX is below:

Next, we invert the chart to mimic the inverse fund DUST:

Now, comes the mark-up:

From Wyckoff’s writings all the way back to circa 1910, he discussed ‘shortening of the thrust’.

When net progress becomes less and less … we know we’re nearing the end of the move.

Throw into the mix the high level of resistance at the GDX 33.00, and probabilities favor the downside … upside for DUST (not advice, not a recommendation).

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.

Set-Ups, that Repeat

Late Session

Wyckoff: ‘Spring to Up-Thrust’

Years ago, while reading one of David Weis’ daily updates, he made a comment to the effect:

‘I can’t count how many times I’ve seen a spring, go straight into an up-thrust’.

His observation stuck with me through the years. Being the engineering type, I naturally wanted to know why.

Why does that market observed phenomenon occur?

Pursuing the question from a data perspective, it became clear that finding an answer, would be a never-ending quest.

I abandoned the ‘data’ idea; but the question lingered.

During that time, observation of the markets proved Weis’ point. Some markets tend to go straight from ‘spring to up-thrust.’

One example that’s taking place now, is CAT:

Another example in the potential set-up phase is LOW:

The reason for the phenomenon remains open. Obviously, the market’s going to go where there are orders.

It’s likely, under the right price action and psychological conditions, when support is penetrated enough (amateur) participants sell and then sell short.

Those undisciplined traders continue to move their stops higher (against their trade) as the the market moves higher; ultimately taking them out at the up-thrust top.

How do I know this? Because that’s exactly what I used to do.

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.

‘When’s the next Bear Market?’

9:47 a.m., EST

ZeroHedge Report Acts Like It’s Not Here

Jerimiah Babe says “Have You Looked Outside?”

If the mainstream media is good for anything, it’s the ability to keep the herd, the retail, (Robinhood kids, et al.) fully distracted until it’s absolutely too late for action.

Even though this report from ZeroHedge gives all kinds of ‘signals’ saying we’re not there yet; It even goes as far as showing there’s no yield curve inversion. Of course that means ‘no risk’ of bear market.

Then going on to say, ‘None of these measures indicate a bear market is near’. I mean, you can’t make this stuff up.

What’s the table above (yesterday’s close) say about what’s really going on?

At this point it’s obvious the media are not going to discuss the on-going bear market in biotech, SPBIO.

Doing so, would require some kind of investigation as to why? That would open Pandora’s box and have everyone digging for truth … something to be avoided (censured) at all costs.

Amateurs always want (need) to know why.

Livermore was never concerned with the why. He looked for ‘what’. What is the price action doing now or what is it likely to do.

As Wyckoff said, ‘the why always comes out later … after the fact’

‘Why’ is a useless trading strategy.

However, in the case of biotech, we can take a good guess what the ‘why’ is all about.

Fall and Winter are very close now. As this interview with Stew Peters reveals, Fall and Winter are when we get the real picture of ‘side effects’.

Biotech is ahead of the pack on the downside and for good reason.

Positioning:

Positions have not changed except for additions of LABD as SPBIO declines and LABD heads higher (not advice, not a recommendation).

As a reminder, this site’s not interested in day trading or even swing trading unless that’s all the market offers.

No, we’re interested in positioning strategically.

This type of trading is modeled after the host’s twenty-four years of experience with aircraft flight test and certification.

A typical project would take five to seven years to complete; have a near infinite number of complex stages along the way with each one a profession unto itself.

At this juncture, biotech may be poised for the largest implosion ever seen in market history.

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.

Livermore, Wyckoff, & Loeb

Buffett’s not on the list

After thirty-four years of researching the markets, focus has narrowed to three masters from the early 1900s; providing a solid framework for addressing the markets of today.

More detail on these masters can be found at this link.

Summarizing their knowledge as follows:

Strategy, Tactics, & Focus

This update demonstrates how those tenets are being implemented.

Strategy:

In Livermore’s fictional autobiography (Reminiscences), he muddled around for years before identifying his niche.

That is:

‘What’s going to (or what’s likely to) happen in a big way.’

That insight has been used to identify the biotech sector as ripe for complete (and well deserved) implosion; more so than any other sector in the market.

For many months, the case continues to build for collapse.

Here’s just one more brick in the wall; providing even more support for implosion.

Tactics:

Wyckoff committed his entire professional life to decoding the market and its moves.

He is (as far as available data shows) the father of technical analysis.

Terms like ‘support’, ‘resistance’, ‘accumulation’, ‘distribution’, did not exist before is treatise, “Studies In Tape Reading”, published in 1910.

His bottom line:

Price is moved by a force of its own; having nothing to do (in a causal way) with fundamentals:

‘What is the market saying about itself.’

The biotech sector SPBIO, is tag-teaming with gold miners GDX (and GDXJ), for downside leadership.

SPBIO finished the week down -27.5%, from its February 9th (2021) high; running a close second to GDX, which finished the week down – 27.6%, from its August 5th (2020) high.

From a speed-of-decline standpoint, biotech’s in the lead.

Focus:

Loeb’s brutal admonition was: ‘The naïve, lazy, mediocre, ignorant and the incompetent “diversify”.

His follow-on corollary was: ‘Real market opportunities are few. If one is discovered, it must be used to its maximum extent.’

Loeb’s assessment of those in the market, is not much different from Wyckoff’s:

“The average man never makes a success of Tape Reading.

Right you are! The average man seldom makes a success of anything.” (emphasis is Wyckoff’s).

From the above list, ignorance can be fixed through determination, study, tenacity and the never-ending search for (market) truth.

The others, not so much.

Using Loeb’s tenet, that is, ‘focus’, we’ve taken it and have gone short and continue to go short (not advice, not a recommendation), the biotech sector via LABD.

Summary:

There’s no guarantee the short trade will work out; yielding a significant gain.

Any number of things can happen:

Internet outage, power outage, terrorist attack, supply chain and transportation shut-downs … literally, anything.

However, being short (from a personal standpoint) is better than wringing one’s hands, cowering in fear, looking to the (bought and paid for) financial media to provide direction on what to do in this unstable environment.

Epilogue:

By using the life’s work of Livermore, Wyckoff & Loeb, its been determined, being short biotech (and possibly the mining sector) is the appropriate market stance.

With the caveat that even now, one might need to exit the trade; it still appears at this juncture, the on-going short (not advice, not a recommendation) is the most focused profit opportunity given the current environment.

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.