Category Archives: Wyckoff

The Market Set-Up … This Week

October 30, 2022 By in Bonds, David Weis, GLD, GOLD, IYR, Real Estate, Spring-to-Up-Thrust, TLT, TSLA, Wyckoff 3 Comments

What To Watch … Bonds, Gold, Real Estate, Tesla

Bonds:

Last Friday, the bond reversal posted a shallow retrace.

We’re looking for upside follow-through at the next session.

Gold:

If gold (GLD) closes below 154.67, on Monday, it will be seven consecutive down months.

Momentum has slowed to a potential inflection point.

Real Estate:

If bonds move higher, real estate may follow. We have potential targets and Fibonacci timeframes.

Tesla:

This update, said to watch if/when TLSA, broke below support.

It did just that during the following week but now, it’s hesitating.

As a result, we have a Wyckoff ‘spring’ set-up.

Now, on to the charts.

Long Bond TLT, 30-minute

We’re drilling down to the 30-minute.

The blue line is Fibonacci 23.6%. Price action (at this point) shows the beginning of a move higher from that level.

Moving decisively higher at the next session, puts the terminating wedge into play, shown here.

If we get a wedge breakout, then we have a measured move target in the vicinity of TLT, 115.00.

Gold (GLD) Weekly Chart

A close below 154.67, on Monday, would put GLD, at seven consecutive down months.

GLD, has never closed lower seven consecutive months; not since inception, on 11/18/04.

Gold remains in a down-channel that’s a Fibonacci 13-Weeks wide.

Last week’s move helped to re-confirm the channel.

That action is itself, a Fibonacci 34-Weeks from the ‘changing of hands‘ high, during week-ending, 3/11/22.

However, momentum of price action has slowed.

If there’s going to be a break to the upside, this would be the place; otherwise, watch for continued GLD downside.

Real Estate IYR, Weekly

If bonds continue their upside reversal with rates lower, we can expect real estate IYR, to have some type of ‘dead cat’ bounce.

If so, how long and how high.

An infinite number of scenarios are possible. However, the chart of IYR, shows what to expect for two of those possibilities.

Real Estate IYR, Weekly

The uptrend (blue line) has been decisively broken. What has not yet happened, is a ‘test’ of that break.

Shown are potential tests; Week 8 (from 10/14/22, lows), at Fibonacci 38%, and Week 13, at 50%.

Between ‘Week 8’ and ‘Week 13’, is the December Fed meeting … a possible catalyst.

Tesla (TSLA) Weekly

This one seems a bit far-fetched but here it is, anyway.

If bonds rally, the rest of the market may also rally; that could include our chief cook and bottle washer, Tesla.

Price action bounced at support and penetrated it several times before printing outside-up on the weekly (twice).

By definition, it’s a Wyckoff spring set-up.

A spring tends to go straight into an up-thrust; a repeating pattern, shown on the chart at around TSLA, 315.

Set-ups can also fail … so, we’ll be watching this one closely.

Stay Tuned

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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

Bond Reversal

October 25, 2022 By in Bonds, Positions, TLT, TMF, TMF-22-01, Van Metre, Wyckoff

‘The Market Is A Tyrant’ … Wyckoff, 1910

This update, posted over the weekend, showed potential bond capitulation, set-up for reversal.

Wyckoff’s admonition (above quote) from his book Studies In Tape Reading, meant, the market dictates our actions.

Our job is to do what the market is telling us.

If we look at charts of TLT, and leveraged fund TMF, at this point (11:30 a.m., EST), it’s an obvious reversal.

Bonds TLT, Daily

We won’t know for sure if it’s an island gap, until the following sessions.

One indicator of potential (sustained) reversal is the leveraged bond fund TMF.

If we compress the daily chart, capitulation volume is clear.

Last Friday’s volume (29.1-million shares) was the highest by far, since the fund started in mid-April of 2009.

Bonds 3X Leveraged Bull, TMF, Daily

Trade or not?

It’s the trader’s discretion; with it being hard to imagine who wants U.S. Bonds.

However, as Steven Van Metre presents in this update, (time stamp, 3:30), foreign investors are interested.

With that, a long position has been opened at TMF 6.705 (TMF-22-01), with a stop in the vicinity of TMF 6.30.

Stay Tuned

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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

After The Close …

October 24, 2022 By in David Weis, DRV, DRV-22-05, IYR, Positions, Real Estate, Wyckoff

Inflection Point

This time, it’s the volume that’s important.

Most of the major indices finished higher today except for the miners, real estate and biotech.

The early session update said IYR, price action may be in a test of its up-thrust (reversal) from October 18th.

If that’s a valid assessment and it was a test, the volume is important.

Whether it’s an up-thrust or a spring, when the set-up gets tested, the volume gives additional clues.

What we’re looking for is when price action comes back to test, volume contracts.

If that happens, it means (with good probability) there’s no commitment to sustain prices at the test level.

Real Estate IYR, Daily

The real estate situation may be about to get interesting.

Volume contraction is near-textbook.

This is one of the rare times, there’s a high probability expectation; that is, IYR price action resumes its downtrend (not advice, not a recommendation).

Stay Tuned

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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 Market Set-Up … This Week

October 23, 2022 By in Bonds, Catherine Austin Fitts, DRV, DRV-22-05, GLD, Gold & Silver, IYR, Positions, Real Estate, Scott Walters, SLV, The Speck, TLT, TMF, Wyckoff, ZeroHedge 2 Comments

What To Watch … Gold, Bonds, & Real Estate

First off, ‘Goldman‘ says melt-up.

Not to be outdone, we have this ‘me too’ melt-up article as well.

Let’s not forget, all the ‘Fed must do something’ rumors and feigned concern by its members.

If anyone really wants to know the big picture, the overall plan (a wide majority do not), this interview may be the best explanation to-date.

With all of that, we certainly could get some kind of rally in the coming week. We’ll let the price action speak for itself.

As a reminder, Wyckoff analysis does not concern itself with press releases, rumors or ‘fundamentals’; Wyckoff himself, determined based on price action alone, they have no material effect on market movement.

In his words, ‘other forces are at work’, and it’s those forces that interest us.

Gold & Silver

As said in this update, gold (GLD) was just ‘ticks’ away from posting a new monthly low. In fact, it got just 0.24-pts, from a new low before rebounding.

Of course, each time we get any kind of rally in the metals, there’s the usual hysteria. Even though for the past seven months and counting, those rallies occur at lower and lower levels … i.e., a bear market.

Shown below, it’s in a trading channel with price action at the right-side channel line.

Gold (GLD) Weekly

The chart below gets closer-in.

From left-most contact point on the channel to the initial contact on the right side is a Fibonacci 13-weeks.

Also note, the weekly high posted at the center line is a Fibonacci 5-weeks from the left-most contact.

Highly emotional markets tend to adhere to Fibonacci until either the emotion wears off or ‘everybody’ recognizes the structure.

Obviously, to keep the channel intact, a lower open (and lower action) at the next session is needed.

Silver (SLV) has already been discussed in this update and this one.

Bond (TLT) Capitulation ?

Was this past Friday the day?

Gap-down trading on huge volume.

Looking at the daily chart of TLT below, Friday’s level of (down) volume has occurred only three times in the past three years.

Each time, there was a near immediate rebound or in the case of March 2021, the rebound came several weeks later.

Bonds (TLT) Daily

Moving in closer, we see the possibility of an ‘island-gap’ at the next open.

What could drive capital into the bond market?

Well, how about a ‘shock’ or continued market melt-down (not advice, not a recommendation).

A quick check of the local newsfeed (as of 12:45 p.m., EST) shows nothing on the horizon other than usual nuclear attack threats, power outages, child mutilation protests, marauding bears and the disarmament of Canadians.

Nothing to see here …

Real Estate

There is no mistake, events in real estate are happening at the fastest pace in recorded history.

As Scott Walters put it, over 10-million people bought into the ‘work from home’ hype and got themselves instantly (nearly) upside down in their transaction.

Now, the layoffs start.

Real Estate IYR, 3-Day Close

Zoom-in, on the channel

As the last update said, we’ll know soon enough if there is more upside or if last Friday was it, and the downdraft continues.

Stay Tuned

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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

Set-Up Details … Real Estate

October 22, 2022 By in 1929, DRV, DRV-22-05, Economic Ninja, GDX, IBB, IWM, IYR, Positions, QQQ, Real Estate, S&P, S&P 500, Scott Walters, SLV, SOXX, SPBIO, SPY, Wyckoff 1 Comment

At A ‘Confluence’

The last update, posted late in the session, said with the upward bias provided by the sizable Op-Ex event, we can look for the weakest (or one of the weakest) sectors.

The chart below summarizes yesterday’s action:

Friday 10/21/22, Single Day Gains

Gold miners GDX, is the outlier at the top and real estate IYR, the outlier at the bottom.

Before anybody gets excited about ‘hyperinflation’, just a reminder; silver SLV’s, action has retraced to a weak 38.2% (chart not shown), as it was forecasted to do from last week’s update:

“Silver (SLV) is currently at support levels; therefore, some upward action (staying below SLV: 18.5) is normal behavior.”

Price action is the final arbiter; we’ll see what happens next.

Back to real estate.

Professional Wisdom: ‘The Crash’

We’re going to use the experience and insight provided by Scott Walters concerning the potential for real estate; that is, we’re in a world-wide event the scale of which, no one alive (and possibly, ever) has seen before.

The Economic Ninja has just seconded that opinion (time stamp 3:45) with his quote:

“Right now, we are in the greatest collapse since The Great Depression; and I believe it will be as severe, if not worse, sharper, faster, than what people experienced in 1929”.

So, what would that ‘collapse’ look like on a chart of real estate, IYR?

Ah, yes. That’s the hard part.

To take useful wisdom like that above, and somehow map it into potential market behavior.

For that, we’re going to use the Quarterly chart of IYR.

Real Estate IYR, Quarterly

There are still two months and one week left to go in the 4th, Quarter.

We’re at a confluence of price action as we’ll cover in the Hourly chart farther down; first, what’s the potential?

Here is one artist’s rendition (not advice, not a recommendation).

That puts it into perspective.

We may know at the very next open, if we’re pivoting higher or continuing the decline.

Butterfly In The Amazon

Of course, the market’s not going to tell anyone its next move. We have to decipher that (read the tape) ourselves.

Sometimes, as Wyckoff said a century ago … ‘It’s as if the weight of a feather is all that’s needed, to push the market further or to reverse.’

So, let’s look at that feather (the butterfly) on the hourly chart.

Since we’re positioned short (DRV-22-05), the chart’s inverted to mimic leveraged inverse fund DRV.

Real Estate IYR, Hourly (Inverted)

The important part is we see a repeating pattern of trendlines.

Moving in closer, we have this. The blue arrow is ‘expected’ action based on the analysis up to this point (not advice, not a recommendation).

Moving even closer, the zoom shows IYR, finished the day in Wyckoff spring position; having pushed past minor support (resistance on non-inverted).

Summary

If IYR opens lower or gap-lower, we’ll have to wait and see if it posts a new daily low (below IYR ,77.24).

If that happens, we have some confirmation lower prices are ahead and can then set a definitive stop for DRV-22-05.

Obviously, a higher open (pushing past IYR 78.91), negates the trade.

Stay Tuned

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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 Market Set-Up … This Week

October 16, 2022 By in $SPSIBI, Basic Materials, Bonds, David Weis, DJUSBM, Gold & Silver, IYM, IYR, J.P. Morgan, LABD, LABD-22-08, Michael Cowan, Positions, SLV, SPBIO, Spring-to-Up-Thrust, Survival Lilly, TLT, TMF, TSLA, Van Metre, Wyckoff, ZeroHedge 4 Comments

What To Watch

First off, it’s nice to know, traders at J.P. Morgan, don’t have clue as what to do.

They say it themselves; Not One Person

On top of that, I’m supposed to pay money reading about how clueless they are. 🙂

No thanks. Let’s see if we can do better than the average ‘investment firm’.

Before we get started, a reminder; as Michael Cowen says:

‘It’s the bear market that reveals those who really understand’, not the bull market ‘geniuses‘.

With that, let’s get into it; first up, is silver.

Silver: Wyckoff Analysis Results

The downside reversal was identified to the day.

Adding to that post, Europeans could not only be freezing or starving this winter, but also subject to radiation poisoning.

Surely, they’re all thinking that ‘stack’ of silver is going to save them.

Silver (along with gold) remain trending lower.

Silver (SLV) is currently at support levels; therefore, some upward action (staying below SLV: 18.5) is normal behavior.

Bonds: Are They Ready?

Hold your nose … bonds could be setting up for a rally.

As Steven Van Metre reports here, the Fed ‘shenanigan’ meter is pegged.

Bonds, TLT Weekly

Note, the bullish TLT, set-up is not confirmed until MACD ticks higher (not advice, not a recommendation).

Also note the repeating pattern of ‘spring to up-thrust‘.

Last up, biotech

Biotech SPBIO, Hourly (Inverted)

We’re going to use the chart from yesterday’s post to set the stage for getting closer-in.

This past Friday’s early morning ‘spike’ is barely visible; the 30-minute (inverted) chart below, has more detail.

SPBIO, 30-minute (Inverted)

Price action rejected the lower levels (higher on SPBIO) and pulled away throughout the session. That ‘pulling away’ continued on, all the way into the close.

That’s a clue there may be follow-through at the next session.

If the early session opens ‘gap-higher’ (SPBIO, lower), into the resistance area (four magenta arrows, hourly chart), it would be the fourth time pressuring at this area; markets rarely hold a fourth attempt.

Summary

Of course, other markets are being watched like real estate (IYR), Tesla (TSLA), and even Basic Materials (DJUSBM), a potential sleeper for significant downside.

Updates are planned if/when low risk shows up.

Positions: Current Stance (courtesy only, not advice).

The following is the positioning of my firm’s main (largest) account.

LABD-22-08:

LABD Entry @ 25.1278, 24.735, 26.025, 22.99, 22.29***, Stop is @ LABD 21.23***

***, Indicates change

Note: Positions may be increased, decreased, entered, or exited at any time.

Stay Tuned

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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

Silver … Sold Out !

October 10, 2022 By in Dollar, Gold & Silver, Kitco, SD Buiilion, Silver Collapse, SLV, Spring-to-Up-Thrust, Uneducated Economist, Wyckoff

… And The Bulls Are Trapped

How is it possible to have silver stocks sold out here and here, yet silver bears have trapped the bulls.

As we’ll show below, this morning’s action in SLV, has confirmed the reversal; a Wyckoff up-thrust, pointing silver’s probability to lower levels.

For starters, let’s recap on how this (trading) game is played.

That is, the public i.e., the masses, need to be led to and fro so they are continuously on the wrong side of the trade.

That’s it.

So it is with precious metals and specifically silver.

The media came out recently, effectively telling everyone ‘Now is the time to buy gold’.

Where were these guys in 2001, when gold bottomed around $271/oz.

No, they show up at the end of the move … not the start.

Public Buys Hype, Not Facts

So the public has bought into the hype and run the silver coffers dry. Everyone excepts an immediate currency collapse and certainly anything can happen.

However, as Undedicated Economist points out, the dollar strength (first identified in this post) can last for years.

The original (bullish reversal) analysis is now supported by the facts; it’s been nearly two-years since that post and the dollar (UUP) is still headed higher.

So, let’s find out where silver is likely to go. For that, we go to the weekly chart.

Silver SLV, Weekly

The set-up, already posted; Spring-to-Up-Thrust.

It’s a repeating pattern found across the markets.

Price action gets itself into a spring condition by penetrating support which subsequently sets up the reversal; the up-thrust.

Next, we’ll use the Fibonacci Projection Tool, showing likely areas for downside destination.

A full 1 : 1 projection gets us right back to where we started the whole ‘short-squeeze’.

If SLV, gets back down to the 10.50 – 11.0, level, one can only imagine what type of hype will be in vogue.

However, at those levels, it’s reasonable to expect the local bullion dealer will be begging for sales … they might even offer their product at, or near, spot. 🙂

Stay Tuned

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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

Tesla … Set To Implode

October 8, 2022 By in Biotech, LABD, LABD-22-07, Mass Psychosis, Taleb, Texas Freeze, The Speck, TSLA, TSLL, TSLS, Wyckoff 3 Comments

Watch The Tape

Two-year uptrend, broken.

A year’s-worth of ‘distribution’ from strong hands to weak.

Ten days from now is the next TSLA, earnings release.

With TSLA, price action approaching The Danger Point®, that earnings release is likely to be a catalyst.

The monthly chart has the trendline (and channel) break along with the distribution phase.

Tesla TSLA, Monthly

Note, each thrust attempt higher (magenta arrows) has subsequently failed.

Thrusts following the first one, are at lower levels.

The weekly chart below, shows what we’re looking for; penetration of support to potentially set up a short-trade (not advice, not a recommendation).

Tesla TSLA, Weekly

When or if that penetration takes place, depending on the depth of the thrust, we’ll have a Wyckoff spring set up … that ultimately is expected to fail.

Ways To Trade

As if on cue and possibly in anticipation of TSLA fireworks, there’s a long and short ETF, for just this ticker.

Released just months ago; TSLS, a 1X inverse (bear) TSLA. The bull side has 1.5X leverage with TSLL.

TSLS, has a 100% maintenance requirement and TSLL, has the same.

Or, one can short directly.

There’s no dividend and the broker used by my firm shows TSLA, has no borrowing restrictions other than a 40% maintenance requirement (not advice, not a recommendation).

Then, there are options … we’ll discuss those if some kind of high probability opportunity presents itself.

The Masses

Let’s not forget the herd. What are they doing/saying?

With that in mind, a random check of our favorite holding pen, SeekingAlpha, has oodles of TLSA analysis.

The most recent is actually quite good from a thoroughness perspective. It admits/discusses the downward pressures and identifies the support/resistance levels discussed above.

The problem is the mass psychosis.

It’s the ‘EVs are the way’ mantra as if Bhagwan Shree Rajneesh himself, was communicating directly.

With the winter carnage in Europe just weeks away, we’re about to find out how green ‘electrics’ hold up when there is, well, no electricity.

Back to Biotech

While all of the above is transpiring, the real Black Swan continues to emerge; the latest here, here and here.

This event is happening now; the effects of which will last our lifetimes.

It’s massive and world-wide; likely to override any mainstream (traditional 60/40, type) analysis.

After letting go of the biotech short for the seventh time, two days later, this past Friday, it decides to reverse.

We’ll cover that in the next update.

Stay Tuned

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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

After The Close …

October 5, 2022 By in Biotech, LABD, LABD-22-07, SPBIO, Spring-to-Up-Thrust, Wyckoff, zsl, ZSL-22-01 1 Comment

The Tape Is Always Right

Once again, stopped-out of the biotech short (not advice, not a recommendation).

Call it bad timing, incorrect analysis or whatever. Every opportunity for SPBIO, to go lower is being thwarted … so, no more for now.

On the flip side, the potential collapse in silver has been discussed over the past few weeks, here, here, here and here.

Looking at the chart below, not only do we have a Wyckoff Up-Thrust, but unless it’s negated by subsequent price action, we’ve got an ‘island gap reversal’ as well.

Prices can’t be sustained at yesterday’s higher level.

Silver SLV, Daily

As previously discussed, very late in the session as SLV, price action rose higher, reducing the risk, a short was entered via Leveraged Inverse Fund ZSL @ 28.08 (not advice, not a recommendation).

The trade is identified as ZSL-22-01.

An obvious hard-stop would be yesterday’s high in SLV, or the corresponding low in ZSL @ 26.55.

Stay Tuned

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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

Trading A Silver Collapse: Part 3

September 25, 2022 By in Food Supply, Gold & Silver, Silver Collapse, SLV, The Speck, Wyckoff, ZeroHedge 1 Comment

No One Expects A Long Term Siege

This time is different.

This is not 1987, or 1998, or 2000, or 2008.

In those cases, once the market reached bottom, the recovery was sharp (’98, ’09) and if not, was steady as in ’87 and ’03 – ’04.

In each case, interest rates were high enough to allow ‘fiddling’ that would in turn, result in the desired (i.e., up) market response.

Ammo Is Spent

This time, we’re in another melt-down and there’s no ammunition left to save the market.

That all got spent in ’08.

Back then, those witnessing firsthand, efforts like TARP, could feel in their gut, ‘there won’t be a (save) next time’.

So, here we are.

Always Fighting The Last Battle

It’s been said, Generals are always fighting the last battle; that is, what happened last time.

In line with that thinking is the (YouTube) idea, once we get a ‘collapse’, it will be time to rush in and scoop up ‘assets’ at fire sale prices.

That idea would have worked quite well in ’08 – ’09, which was last time.

On The Brink

Last time, there was no threat of nuclear war.

There was no infrastructure collapse or crop failures and looming world-wide famine (just to name a few).

There was no ‘elephant’ either.

This article, just out, has California front running the elephant with ‘composting’ signed into law a few days ago.

Silver, The Collapse of Demand

It’s not the metal itself that’s the problem. Having some is always a good idea.

It’s the idea of trusting in these ‘things‘ to be one’s savior.

There are larger forces at work that will likely overshadow owning something you can’t eat.

Once again, this just out: World’s largest produce market (Paris) goes up in flames.

At some point, there will be a collective world-wide realization … it’s the food supply.

When that happens, the expectation is, all ‘assets’ will be heavily sold off, including precious metals.

Silver (SLV), Monthly Close

The monthly chart shows the line to watch; the downtrend that started in late March of this year.

If SLV maintains its current rate of decline, it will be April of next year before we get to the support level shown below.

Pushing (and closing) below well-established multi-year support (orange line), is no easy task.

We would likely need to have some sort of catalyst to help price action get to those levels.

Once below support (‘Target Area’), SLV would then be in Wyckoff spring position.

Summary

As always, anything can happen; precious metals could rally starting at the futures open in a couple hours.

Price action itself, is the final arbiter.

Most ‘investors’ are not prepared for a long-sustained siege-grinding rachet lower, possibly to single digits.

If that happens, then will be the time to assess the potential for a significant long-term rally.

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