Category Archives: Wyckoff

Positioned For Trouble

August 3, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-16, SOXS, SPBIO, Wyckoff, XBI, ZeroHedge 1 Comment

When The Tide Goes Out

We all know the quote attributed to Buffett:

‘When the tide goes out, that’s when you find out who’s been swimming naked’.

Or, to put it another way:

‘Everybody’s a genius in a bull market’.

Well, ladies and gentlemen, here we are.

We’re about to witness what method’s best suited to handle typical ‘price destruction’ behavior of a bear market (here and here) along with possible chaos in commodities.

That challenge also includes this site of course.

Bear Market Behavior

If we’re really entering a bear market, prices typically do not go straight down unless there’s an outright crash.

No …Bear markets are all about what’s called ‘price destruction’.

That is, price action whipsaws a near infinite number of times; getting into (a short) position for the downside or (long for) an upside squeeze is incredibly difficult.

The most recent example of this was the volatile whipsaws in 3X leveraged inverse fund, SOXS:

Swings over +/- 20%, back-to-back in days if not hours.

With that said, we’re looking at biotech XBI, to see if there’s a chance of it being ‘well-behaved’ during a decline (not advice, not a recommendation).

Biotech XBI, Weekly

On a weekly close basis, we’ve had a double top.

Using the MACD, it shows momentum weakened on the leg up to the second top.

Watching price action (the tape) of XBI late Friday, near the close, it gave the appearance of short covering.

Upward spikes that appeared to be labored.

If that’s true, then a lower open at the next session would be the expectation (not advice, not a recommendation).

Taking Action

As the disclaimer states, this site is ‘not certified’ by the SEC and does not, cannot provide any advice.

What it can do, is infer the actions being taken.

With that said, this update shows the ‘category’ side bar with LABD-24-16, thus inferring a short position via LABD.

That’s the firm’s identifier used for spreadsheet tracking; the 16th biotech short via LABD, for the year.

Never Too Early, To Trend

In the next update, we’ll discuss how even in the early stages of (potential) XBI reversal, we may already have a trendline.

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

Targeting, Taiwan Semi (TSM)

July 23, 2024 By in Semiconductors, SOXS, SOXX, TSM, Wyckoff

Once A Trend Is Broken …

According to Wyckoff principles;

‘Once an up-trend is decisively broken, the market will (typically) attempt some kind of rally to test the break’.

Looking at the daily chart of Taiwan Semi, TSM, there’s no doubt the uptrend has been broken.

Taiwan Semi, TSM, Daily

The amount of (daily) down-force exhibited on the July 17th, trend-break, was the most ever for TSM.

With such a massive down-force, we’re in uncharted territory. The test, if it comes can complete at any level.

Currently as of 1:25 p.m., EST, TSM is trading at 170.6, near the 23.6%, retrace.

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

Hanging By A Thread

July 13, 2024 By in Artificial Intelligence, NVDA, Semiconductors, SOXS, SOXS-24-12, SOXX, Up-Thrust, Wyckoff

SOXX Bulls, Lose Their Grip

For most of Friday’s session, SOXX bulls looked like they would make it.

Price action pushed up to within 1%, of a new all-time-high.

Levels threatening the A.I. reversal scenario right up until 30-minutes before the close.

Then, the air came out.

The SOXX, closed up for the day, but just under the breakout, shown in the chart below.

Semiconductors SOXX, Daily

Along with closing below resistance (blue line), price action did so on contracting volume.

Volume contraction implies, commitment to higher prices is weak (not advice, not a recommendation).

Sentiment, Volume, Price

That’s the reversal construct being used on this site.

First, the sentiment, then volume, then finally, the price.

Looking at the 5-Year Weekly chart of Nvidia, we can see it playing out in real-time.

Nvidia NVDA, Weekly

The professionals have already left the chat; storm clouds are beginning to appear.

So far, ‘Week 89’ reversal remains intact.

The Danger Point®

From an engineering standpoint, the SOXX, has met the requirements for a Wyckoff up-thrust (not advice, not a recommendation).

First: Price action posted an outside-down reversal (last Thursday), on increased volume and closed below established resistance.

Second: That reversal was then tested (on Friday) and did so, on contracting volume.

Third: MACD, divergences on Weekly and Daily timeframes; although near-term weekly has yet to tick lower but still (diverging) below the highs of this past March.

    Intuitively, you can feel that something’s up. The A.I. pump-n-dump set-up may have run its course.

    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

    CORN … At Lows, Stops Dead

    July 6, 2024 By in Corn, David Weis, Derecho, ice-age-farmer, Wyckoff

    Penetrates & Holds Below Support

    Penetrating and holding just below support, we know what that means.

    CORN is at The Danger Point®, in spring position (not advice, not a recommendation).

    The chart below covers over four-years of price action; within that, we have at least three technical items to cover.

    Somebody Always ‘Knows’

    First, how does volume in CORN, go from basically nothing, to increasing over 400%, six weeks before, the perfectly timed and positioned (in the corn belt), ‘Derecho‘.

    That location is identified as ‘What’s This?’

    As Wyckoff said a century ago: ‘Somebody always knows something and that ‘something’ shows up on the tape’.

    CORN Fibonacci, 8-Day

    Second, is the successive decrease in downward thrust over the past three-years; at this point, nobody’s watching.

    All of that brings us to the third technical point.

    CORN has retraced to support (blue line) which just happens to be a Fibonacci 61.8%, level; penetrates that support and so far, has stopped dead.

    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 … The ‘Clubhouse Turn’

    July 2, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-13, SPBIO, Wyckoff, XBI

    Testing Complete … ?

    Is biotech (finally) coming around the Clubhouse turn?

    Has it finished its two-months of (upward) testing and ready to reverse lower?

    We’re about twenty-minutes before the open; pre-market action is posting a tight range (magenta arrow), shown on the inverted chart.

    Biotech XBI, Daily (Inverted)

    For the beginnings of a ‘confirmation’, we’ll need to see a new daily high (new low, non-inverted).

    From a Wyckoff standpoint, note the net distance traveled has become shorter and shorter.

    A potential reversal may be at hand (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

    Nat-Gas … Another Set-Up

    June 30, 2024 By in Natural Gas, UNG, Wyckoff, ZeroHedge

    Watch For The ‘Bounce’

    Nat-Gas, UNG, is at support right now.

    So, what happens next?

    Before we get to that, let’s first be aware of what’s being presented to the public. This recent link, says that upon increase in production, ‘go short’ (absolutely, definitely, not advice, not a recommendation).

    So, the advice is, somehow tie the fundamentals to a trading action?

    Given that going short on increase of production would even work (I wouldn’t do it), how is anyone going to figure out whether those numbers are real?

    So, we choose not to play the game and instead, go straight to the truth, price action.

    Nat-Gas UNG, Daily

    First, it’s important to note the ‘Risk At A Low’, area.

    That’s the location of this update.

    With price action now at support, anything can happen.

    There could be an immediate bounce, downside penetration, or some combination.

    Note that Force Index (purple rectangle), shows action as ‘well behaved’.

    That is, there’s no apparent craziness as was seen to the far left of the chart with wide swings in Force Index.

    If UNG, does bounce higher from here, it increases the importance of the support level.

    That, in turn, gives us a ‘heads up’; keep watching for a subsequent downside penetration and possible Wyckoff ‘spring’ set-up.

    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

    The CORN Collapse

    June 29, 2024 By in $SPSIBI, Biotech, Corn, Derecho, Food Supply, Genesis 41, ice-age-farmer, Natural Gas, SPBIO, Teucrium, UNG, Wyckoff, XBI

    Another Nat-Gas Scenario?

    The beginning of a bullish set-up?

    The financial press says the wipeout in corn, is because of oversupply.

    That, may or may not, be true.

    Since Wyckoff analysis doesn’t care about the press, we’ll use it to discern the (potential) truth.

    Let’s see how it did in the recent past. The Nat-Gas (UNG) low, was identified to-the-day, link here.

    From that post, was this:

    “Downward thrust in Nat-Gas UNG, appears to be exhausting itself after a 20-month, bear market. Risk is never zero, but currently appears to be at a low … “

    So, it was. Afterwards, UNG bounced near, but never touched that low.

    Twelve trading days later (Fibonacci 13 days, from low), it reversed decisively to the upside.

    The Same, But Not

    On the medium, to long-term, CORN action is the same as biotech (XBI), but opposite.

    Instead of an up-thrust two-years in the making, we may have a spring set-up, taking just as long if not longer.

    Where’s The ‘Potato’?

    So, where’s the ‘Potato Head Gambit‘?

    It’s possible, mishaps could be on the upside instead of down. It worked last time; here and here.

    That ‘event’ went straight across the most-dense areas of the corn belt.

    All of which, brings us to the chart.

    Teucrium CORN Fund, Weekly

    We’re in spring position now (not advice, not a recommendation).

    However, shown on the chart is a potential low at the Fibonacci 76.4%, retrace.

    The financial press article in the very first link (above) does have some useful information.

    That is, ‘spec’ traders are adding to short positions.

    ‘Spec’ traders are the least informed.

    It’s the ‘commercials’, professionals working the industry that are most informed.

    Monitoring what they (the commercials) are doing is the potential key to the next likely direction for CORN (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

    Neural Plasticity … Be Flexible

    June 26, 2024 By in $SPSIBI, Biotech, Dr. Elder, LABD, LABD-24-13, SPBIO, Uneducated Economist, Wyckoff, XBI, ZeroHedge

    Reviewing The Plan

    From the outset, the premise for biotech XBI, was this:

    We’re in a huge up-thrust, several years in the making (not advice, not a recommendation).

    With a set-up that big, downside potential was projected to be just as big, link here.

    Then came the hard part, validating the premise and getting into position.

    Nural Plasticity

    So, it’s been on again, off again; a total of seven short trades; LABD-24-06 – LABD-24-12, with an eighth, LABD-24-13 opened, as of today.

    The entire (closed) series has been profitable.

    However, during that time, assessment of (major) downside potential shifted from confidence to caution, and now back to confidence.

    ‘Sticking to one’s guns’, no matter what the market (the tape) is saying, is a sign of real trouble.

    The market itself directed the entering/exiting.

    With that, let’s move on.

    The ‘New’ Paradigm

    Reviewing the host of ‘experts’ in the press and YouTube alike, (except for UE), everybody has their reason on why nothing (bad) will happen until after the ‘election’.

    The last go-round should have broken that paradigm completely; but no, we’re still hanging on.

    The ‘new’ paradigm is probably, ‘no’ paradigm. 🙂

    From a Wyckoff perspective, the financial press is to be ignored except for when data releases are scheduled.

    What’s in the release is not important; it’s the time and date itself, warning of potential volatility.

    Biotech XBI, Daily (inverted)

    Once again, inverting the chart to show the short-side (LABD) potential (not advice, not a recommendation).

    Note: The dashed blue lines, an extension of the support level shows we’re also in a potential spring set-up at one higher timeframe, the weekly; more background, link here.

    Positioning

    As noted above, a new short position was opened via LABD, during this session (not advice, not a recommendation).

    Typically, discussion of open trades within the trading community is (or should be) taboo. As Elder said years ago, there’s the real risk of ‘ego’ causing errors in discernment.

    With that said, I might exit this trade at any time, without notice, without explanation.

    Veteran traders will agree with that statement; when something’s ‘off’ with a trade (only known to them), it’s time to get out.

    Nonetheless, a hard stop for today’s position would be yesterday’s LABD, low of 6.97 (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

    The A.I. Money’s Down The Drain

    June 20, 2024 By in Artificial Intelligence, Biotech, Semiconductors, SOXX, Wyckoff, Wyckoff Stock Market Institute 2 Comments

    The Plug, Has Been Pulled

    Markets reverse in a typical way; first is ‘sentiment’, then ‘volume’, then ‘price’.

    According to this link, looks like we have sentiment aplenty; evaporating sentiment, that is.

    As stated by Mr. Fred Hickey, VC (Venture Capital) funding peaked last year and has dropped over 75%, since then; that’s the ‘sentiment’ part of the equation.

    A partial synopsis of his interview, in the link above:

    Time Stamp:

    9:15, The greatest bubble I’ve ever seen

    11:15, It’s all happened before

    11:40, Narrowing market

    11:55, Volume decline

    16:30, Honeymoon phase is over

    17:50, VC spending down 75%

    18:05, Everyone knows it’s a joke (except, Wall St.)

    And on it goes …

    Where’s The Top?

    From a Wyckoff perspective, using his analysis (here and here) as a basis of speculation, that’s the wrong question (not advice, not a recommendation).

    If we’re expecting some kind of massive reversal (which we are), then the objective is to look for the weakest sectors, not the strongest.

    Frequent users of this site already know that work’s been done. One of, if not the weakest sector(s), is Biotech (not advice, not a recommendation).

    Is Today, The Day?

    With that said, as this post is being created (1:20 p.m., EST), the sector at the center of bubble attention, the SOXX, may have just completed a wedge ‘throw-over’.

    Semiconductors SOXX (ETF), Daily

    Any number of scenarios can be in play.

    At this point, the SOXX, may be in the process of validating the terminating wedge (not advice, not a recommendation).

    As Fred Hickey said, it’s the biggest bubble he’s ever seen.

    By the time it becomes obvious, it’s way too late for (low-risk) positioning.

    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

    The Moderna Reversal

    June 19, 2024 By in $SPSIBI, Biotech, Dr. John Campbell, Elliott Wave, IBB, Livermore, Loeb, MRNA, PFE, Prechter, SPBIO, Wyckoff, XBI, ZeroHedge 1 Comment

    When Price Action Heads South …

    Said many times;

    ‘When price action heads south, bad news comes out.’

    That’s a slightly different take on Prechter’s (Elliott Wave) observation.

    ‘Price action leads the news; not the other way around’.

    Going to BigCharts, typing in MRNA, shows they still have no P/E.

    So, the ‘bad news’, can’t be they’re not making any money because they’re not doing it, now. 🙂

    I wonder, who can it be now?

    For a clue to the (potential) answer, we can look at what’s happening to Pfizer, link here and here.

    However, let’s not get ourselves wrapped around the axle on events, forecast years ago.

    Rather, let’s go straight to the truth, the price action and see what it’s telling us.

    Moderna MRNA, Weekly

    The entire move from low to highs is shown. Included on the chart, are two Fibonacci indicators.

    One is the standard ‘retrace’ indicator; the other, is a ‘projection’ indicator.

    The ‘projection’ is based off the ‘a-b-c’ move from the lows of November 2nd, 2023, to the highs on May 24, 2024.

    The retrace and projections are hard to see, so the ‘Detail‘, arrow is where we’re headed next on the daily.

    Moderna MRNA, Daily

    If there ever was a chart to once-and-for-all, refute, dismiss, trash, the whole ‘Fundamentals’ argument, that earnings, interest rates or some other ‘Voodoo economics’, moves prices, this is it:

    MRNA, price action hit the 23.6% retrace level (exactly) for two days before moving on to hit the 161.8%, projection (exactly) before reversing.

    Note the ‘100%‘ level as well; price action confirmed this area (exactly) three times! Once on the way up and two times on the way down (third time, not shown).

    A century ago, Livermore said, ‘It’s all about the numbers’.

    Strategy, First

    Just as Livermore was primary a strategist, so is this site’s method of analyzing the markets, i.e., Strategy, Tactics, Focus, in that order (not advice, not a recommendation).

    The news has been replete with reports like this one and this one.

    Another panic ahead?

    Sounds like it but at least in the case of Moderna, the chart itself says (effectively):

    ‘There’s no money in it’.

    That means, another wave like we saw several years ago, is not the most likely future event (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