Category Archives: Wyckoff

At The Edge … Biotech

March 3, 2024 By in $SPSIBI, Biotech, IBB, LABD, SOXX, SPBIO, The Maverick of Wall Street, Wyckoff, XBI 2 Comments

Amidst The Confusion, The Biotech Set-Up

Let’s remind ourselves with a paraphrased quote, long ago:

‘Until you can completely ignore the financial press and focus strictly on price action, you will never be successful in the markets.’

Richard D. Wyckoff, circa 1934

New Highs … Except

It’s new highs for the AI insanity; all the while, CEOs and other insiders are cashing out, as reported by The Maverick, and J. Bravo.

Notably absent from this drunken cyber-bash are biotech IBB, and XBI.

Fibonacci Retrace Compete?

Both indexes (ETFs) posted a Fibonacci retrace (from 2021 highs), doing it simultaneously; IBB at 50% and XBI at 38%.

Potential reversal of XBI, link here.

We have below, even more (technical) weight for XBI pivot from up-to-down (not advice, not a recommendation).

Biotech XBI, 3-Day

Attempted breakout above resistance (magenta line) puts XBI, at The Danger Point®

Price action’s hovering above resistance while at the same time posting climactic volume.

Note that it’s just touching the underside of the 38.2% retrace level (blue line).

The last time we had a similar volume climax was the pivot point from down-to-up, in early May of 2022.

Does that mean the current volume spike signals a (potential) reversal from up-to-down?

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

DHI Bounce … Will It Hold?

February 3, 2024 By in DHI, Real Estate, Spring-to-Up-Thrust, Wyckoff

Friday’s Action: ‘Spring-to-Up-Thrust’

There’s a lot of ‘waiting’ in the markets; waiting for the right time, the right set-up.

The last update on D.R. Horton (DHI) said to watch for a test of resistance and possible Fibonacci time correlation.

Well, we got the test.

As for Fibonacci, it shifted to a potential low-to-high sequence; the low on January 24th, to the high on Friday, was 8-Days.

Friday’s action was a minor ‘spring-to-up-thrust. 

The prior session low was penetrated as well as the high with an overall lower close.

All of which brings us to the chart.

D.R. Horton, DHI, Weekly

Looking at the chart, it’s self-explanatory.

We’re in a terminating wedge that’s in a ‘throw-over’.

If price action gets below the upper wedge boundary, it’s a confirmation. That in turn, would suggest much lower prices ahead (not advice, not a recommendation).

Note the massive down-thrust. We have to go all the way back to the ‘event’, to see anything similar.

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.

Rates Rising … Miners Critical

January 25, 2024 By in DHI, DUST, GDX, GDXJ, Interest Rates, JDST, Spring-to-Up-Thrust, Wyckoff, ZeroHedge 1 Comment

Then, The Real Estate Bubble

The elephant in the room:

Rates are not going lower, they’re going higher; sooner rather than later (not advice, not a recommendation).

Yesterday, ZeroHedge reported the 5-yr auction was nasty with rates rising to near recent highs.

Today, we have yet another supply disruption impacting so-called ‘inflation’.

Couple that with an apparent real estate implosion.

DH Horton (DHI) down nearly – 12% in just days and holding steady in the pre-market session.

It looks like the bubble party is (finally) over.

Gold Miners To Catch Bid?

The miners are at another critical juncture.

The Juniors GDXJ, are up in the pre-market session (8:00 a.m., EST) and may be catching a flight-to-safety bid as parts of the markets top out and/or reverse.

That flight to safety may not last long as we’ll see below.

Junior Miners GDXJ, Daily

Trading is up about 1% or 0.32 pts in the pre-market.

GDXJ, price action is at The Danger Point®. 

We are either in a reversal (Wyckoff spring) set-up or just a pause before posting lower.

If it’s a rally, the target area is shown (magenta oval); corresponding to a 61.8% 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.

Interest Rate Snare

January 11, 2024 By in DUST, Ed Dowd, GDX, GDXJ, GLD, Gold & Silver, Gold Miners, Greg Hunter, JDST, SLV, Wyckoff

Manipulated Into The Trap

‘They [The Fed] are totally tricking the markets’ (time stamp 3:30), link here.

Yes, it’s a real chess game going on and the other side, makes up the rules.

This update presents that despite all the manipulation and head-fakes, significant market pivots in the miners were identified (correctly) with Wyckoff analysis.

That analysis, in turn, helped develop a long-term strategy (not advice, not a recommendation).

Junior Miners GDXJ, Weekly Close

Three key points are shown on the chart. 

The first goes all the way back to October of 2020, link here. There’s something wrong with the miners.

Potential for another downward pivot, link here, was identified to-the-week, if not, to-the-day.

The subsequent move printed the most impulsive price action since the spike melt-down of early 2020.

Which brings us to today.

Another potential pivot has been identified, link here.

As of this post (11:20 a.m., EST) the Juniors GDXJ, continue to rachet lower.

The Long Term

As Ed Dowd points out in this interview, what’s happening now will affect us all for decades, if not centuries to come.

Therefore, it’s a good idea to have a long-term strategy.

From the above chart, it’s clear that Wyckoff analysis has been on the correct side of GDXJ price action; the bearish side (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.

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

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

‘$30-Silver’ … Nowhere In Sight

December 30, 2023 By in Car Questions Answered, Federal Reserve, Gold & Silver, Gold Miners, Interest Rates, SLV, Wyckoff

It May Still Get There … But First

Just as this report said nearly a year ago, there’d be no Fed pivot (still waiting), this article from seven months ago, prompted a mental note to revisit the ‘$30/oz’, silver prediction.

Before we address that, let’s go way back to this post over three-years ago, detailing how the miners, and silver for that matter, are not (yet) in a sustained bull market.

Now, we have the Fed ‘pivot’ set-up and the metals (especially silver) posting a non-confirmation.

The (non) ‘Pivot’

Obvious to only a few (like Uneducated Economist), is how the ‘pivot’ narrative is a false. 

Typing in ‘Fed pivot’, into YouTube turns up a massive list. Everybody’s jumping on board. 

That in itself, may be cause for alarm.

From a strategic standpoint, we’re not in Kansas anymore.

The 40-year long bond bull market (1980 – 2020) has been broken. Higher rates for longer, like maybe another forty-years, may be the norm (not advice, not a recommendation).

Silver Still Down

Silver (SLV) is far below its 2011, highs: approximately -55%. In addition, SLV, may be on its way to test the lows of SLV, 12.50 – 13.50. More on that in another post.

Silver SLV, Daily

The chart shows we’ve had a false breakout (Wyckoff up-thrust), then reversal, and now an apparent test that has (so far) pivoted lower.

The inference is, the silver market’s not buying the Fed ‘pivot’ and subsequent inflation narrative. 

It’s possible, the economic collapse narrative like here and here, is weighing more on silver … a narrative that’s actually happening. 🙂

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

Think Like A ‘Criminal’

December 22, 2023 By in $SPSIBI, Biotech, LABD, Neil McCoy-Ward, SPBIO, Wyckoff, XBI 1 Comment

How The Game Is Played

Watch the video linked here, to see how veteran trader Richie Naso describes trading false breakouts and breakdowns, showing how to position in the markets.

What he’s in effect describing is a Wyckoff Up-Thrust (false breakout) and a Wyckoff Spring (false breakdown).

Then he adds, you have to ‘think like a criminal’ to really understand who is doing what, to whom.

Note: No mention of the Fed, corporate earnings or any other ‘funny-mentals’ as Ed Seykota likes to call them.

Inflation Takes A Holiday

Not for long though.

Neil McCoy-Ward at this link, describes how inflation is coming back (time stamp 21:00).

The Imaginary Friend

We’ve had the markets launch on ‘Imaginary Rate Cuts’ as Uneducated Economist calls them, while in the background, more inflation (i.e., supply destruction) is in the works.

Which brings us to biotech and specifically, SPBIO, $SPSIBI, and XBI.

Biotech XBI, Daily

We may have just had the largest market fake-out (up-move) in history; time will tell.

With all of that manipulation, price action (for biotech, at least) has come back to near prior peaks … but not above.

As this post is being created (3:05 p.m., EST), XBI is starting to back off its intra-day highs.

Internalize It

Referring back to Undedicated Economist, the comment sections of his videos have the usual ‘So, what do I do?’.

His response is a good one. 

He says to ‘internalize’ the message he’s presenting. For example, in this case, it’s possibly the biggest market fake-out in history. Then he says you will ‘intuitively’ know what to do (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 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

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 Bellwether … CRSP

December 9, 2023 By in $SPSIBI, Biotech, CRSP, IMGN, LABD, LABD-23-16, MRTX, Positions, SOXS-23-10, SPBIO, Spring-to-Up-Thrust, Wyckoff, XBI

Repeating Trend, Cashing-Out

Once again, there’s a repeating trend of (potential) reversal.

This time, it’s biotech, specifically CRISPR Therapeutics, CRSP.

Before we get into it, a point of housekeeping; SOXS-23-10, has been closed, exited at SOXS 8.43; loss is manageable at -2.9% (not advice, not a recommendation).

CRSP, Market Proxy

CRSP, is being used as the proxy for biotech as it’s number five in market cap at this link.

However, the first two IMGN, and MRTX, are buyout (acquisition) candidates, eventually to be removed, making CRSP, number three with no additions.

Set-Ups That Repeat

Market behaviors repeat. Set-Ups repeat. The title above, was from a post over two years ago, link here.

Taking a look at CRSP, we have the same pattern.

CRISPR Therapeutics CRSP, Weekly

The volume spike for the week, is the largest ever; ergo, someone is selling.

From a CRSP, price action catalyst and news standpoint, the link is here.

This coming Wednesday, is the Fed interest rate announcement, link here.

Wyckoff said, ‘somebody always knows something and that “something”, shows up on the tape’.

It’s likely those that know, are cashing out ahead of the meeting (not advice, not a recommendation).

Positioning

If it’s presented on this site, a position has already been established or it’s in preparation for entry.

So, it is with biotech.

A biotech short was opened this past Friday via LABD with two entries: LABD 13.93 and LABD 14.17.

Trade is labeled, LABD-23-16

Hard Stop @ LABD 13.82, for a combined (both entries) risk of 0.23-pts/share (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

There’s a ‘Hole’ in The SOXX

December 2, 2023 By in NVDA, Positions, Semiconductors, SOXS, SOXS-23-10, SOXX, Wyckoff 1 Comment

Two-Weeks of Churn

The SOXX, has been churning at 510- 525, for over two weeks with no net progress.

What happens if it can’t go materially higher?

It’s reasonable to think, good news is already out; evidenced by Nvidia’s price action.

If we look at NVDA, using it as the proxy, it has reversed off all-time highs, slipped below support and on Friday, came back to test; a weak one at that (so far).

SOXX Highs, Long Ago

The SOXX posted its all-time-highs nearly two years ago with the most recent rebound in August, this year.

Now, after a subsequent move lower, price action has come back up to test, forming an apparent hole.

Semiconductor SOXX, Daily

The chart says it all; We’re at The Danger Point®

Price action appears to be struggling at this level.

If it can’t break higher and/or, posts a new daily low, it may be confirming a false breakout (Wyckoff, ‘Up-Thrust’).

That would open up possible testing of gaps (lower), potentially the Trading Range lows, as well (not advice, not a recommendation).

Positioning

As one would surmise, a short position was opened on Friday via Leveraged Inverse Fund SOXS.

Entry @ SOXS 8.59, Hard Stop @ 8.22, Soft Stop (discretionary) @ 8.30 (not advice, not a recommendation).

Trade is labeled: SOXS-23-10

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