Category Archives: Wyckoff

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

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

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

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

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

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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

No ‘Soft Landing’ or ‘Hard Landing’

September 23, 2022 By in GLD, GOLD, Scott Walters, Wyckoff, ZeroHedge

There’s Only, ‘Collapse’

The ‘narratives’ are false.

There’s no ‘recovery’, no ‘soft landing’, no ‘hard landing’.

There’s no ‘housing boom’, no ‘inflation’, and maybe most of all, no (sustainable) ‘Electrical Vehicle’ market.

What there is …. is ‘collapse’.

Collapsing food supply, collapsing economy, collapsing real estate, collapsing employment and collapsing (electrical grid) infrastructure.

How do we know that?

The price action (the market) itself, says so.

Wyckoff, The Rest, and Gold

As stated in the last update, unlike other analysis methods, Wyckoff looks at what the market is saying about itself.

The market itself, defines the next likely course of action.

Two days ago, gold was used as the example.

Contrary to the ZeroHedge report linked in the prior update, Wyckoff analysis revealed the most probable direction for gold, was down.

The Gold (GLD) Market

The Fed announcement late Wednesday, resulted in a ‘blip’ higher for gold that stalled-out, the next day.

However, that announcement, may have confirmed a trend change in GLD.

Looking at the chart below, it’s possible that Wednesday identified a more aggressive trendline, lower.

Gold (GLD), Daily

It’s about an hour after the open.

This is how it looks for GLD.

The new trendline and trading channel are clear; trending lower at approximately -60%, annualized.

The next chart is a zoom of the pivot area.

If there ever was going to be a Fed ‘Pivot’, this was it. 🙂

The price increases being touted as ‘inflation’ are clearly the result of supply destruction.

You can’t have 90+ ‘food processing plant fires’ in the past year or so and not have it affect prices at the supermarket.

Same goes for crop failures or lack of harvest world-wide.

Summary

As always, anything can happen. Gold could reverse and mount some kind of rally.

If somehow, there’s a change of demand, it will show up on the tape (the chart) as a change of character.

So far, there is none.

Most likely direction remains to lower levels.

Parting Shot

Just to illustrate the point of ‘collapse’, we’ll leave off with this recent report from Scott Walters.

The real estate example shown is the River Oaks area of Houston … Highly affluent.

There’s no debate.

It’s a collapse, when a house has to drop $20 million, from $26.5-mil to $6.5-mil, and Still Not Sell!

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

Gold Penetrates Support

September 16, 2022 By in GLD, GOLD, Wyckoff

The ‘Inflation’ Narrative Is False

How do we know the ‘narrative’ is false?

Because the price action tells us at this juncture, we’re in some kind of ‘deflation’ impulse.

Taking it a step further, what happens if we don’t get the much assumed ‘hyperinflation’.

What if something else is afoot?

Remember, a Black Swan can also be an upcoming event that’s widely accepted as fact but does not happen.

Now, to the ‘inflation’ indicator itself: Gold

Gold (GLD) Weekly Close

The downside penetration is clear.

GLD, is at The Danger Point.

If we really do have inflation and gold’s going to launch much higher, the last report stated, penetrating support and setting up a Wyckoff ‘spring’ condition would be a good place to start.

So, here we are.

As this post is being created, GLD is rebounding higher by about +0.50%.

This is normal market behavior.

However, the next chart says gold’s likely to have a hard time moving decisively higher.

On a weekly close basis, gold’s in a confirmed downward channel.

It’s going to take a lot of demand to break out of that trend.

Summary

So, far, the attitude of the ‘average investor’ to gold’s decline is “Good, I’ll just buy more.”

Six months or a year from now, when food supplies have run out or become so expensive, only ‘zee bugs’ will be reasonably priced, one has to wonder if we’ll all have the same attitude.

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 is no ‘Spoon’

September 13, 2022 By in $SPSIBI, Biotech, Interest Rates, LABD, LABD-22-05, Livermore, Positions, SPBIO, TDA-LABD-22-02, Wyckoff

Paradigm Shifts

We’re living in the surreal.

Only those who can ‘see’, understand it’s like something out of The Matrix.

The old paradigms no longer apply.

There is no ‘Pivot’

There never was a ‘pivot’; just like there never was a goal of 2% inflation, or full employment.

Way back in 1921, Jesse Livermore pegged it when he told Wyckoff, the whole premise of Wall Street, was to spread “deception”.

Deception is the key.

Attempting to figure out the next earnings release, the CPI or employment numbers, inflation, or what the Fed is likely to do, is to buy into the deception.

Following that deception, is the path of the amateur.

Meanwhile, back on the professional side; as early as 1909, Wyckoff discovered market prices move based on an energy and objective or their own … completely removed from any fundamentals.

A few days ago, this update, discussed how biotech SPBIO, was potentially at a pivot point and ready to reverse lower.

Well, downside reversal is what we have.

Biotech SPBIO, Weekly Close

Even though we still have three trading days left, SPBIO, appears to be confirming the right-side trading channel.

Last Week.

And … this week

With the overall markets down sharply, events appear to be set in motion to continue downside action.

Summary:

As stated in prior updates, the current trade; LABD-22-05, was initiated in anticipation of a significant break lower (not advice, not a recommendation).

On the biotech fundamentals side (not that it matters), the wheels have come off.

The top weighted equities have no P/E … a decent conclusion may be the lower weightings don’t either.

Nobody’s making any money; rates are rising and we’re heading straight into an economic depression.

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

Gold … Ready To Move

September 11, 2022 By in GLD, GOLD, Jerimiah Babe, Russia, Wyckoff 2 Comments

Up or Down ?

Before we get started, no analysis would be complete without the latest mega bull forecasts for gold.

Here they are:

“Everyone Is WRONG About This Cycle” – Peter Schiff

Well, ok. I only have one bullish report.

Since it’s from Schiff, do we really need more? 🙂

Remember, back when it was the Russians that were going to move gold higher? You really can’t make this stuff up.

So, let’s move on and take a look at the truth … the price action for gold (GLD).

Gold (GLD), Daily Close

The un-marked daily chart shows about three-years of price action.

The next chart shows the ‘Changing of Hands’ that was first identified over four months ago in this post.

Also shown is the current (channel) trendline that appears to be in effect; GLD, is ‘respecting’ the line.

The left side channel line is grey in color so that multiple hits are shown more clearly.

However, the next chart is where it gets interesting.

If or when GLD penetrates support, it would by definition be set-up in Wyckoff ‘spring position’.

If GLD, was going to launch to new all-time highs, getting itself into ‘spring position’ would be an excellent place to start the move.

If and when there’s penetration of support, one thing to watch closely is the volume.

Would it be another high volume ‘changing of hands’ (for the upside) or a low volume affair that grinds on down.

Summary

From a fundamental standpoint, where’s the money going to come from to increase the demand for gold?

We’re already at the front end of (very likely) the largest real estate crash in U.S. history.

The consumer’s tapped out with record high credit card debt; mass layoffs have already started.

Bankruptcies in some areas are up over 100% from last year. Bankruptcy means ‘liquidation’ and that includes any precious metals.

Anything can happen and gold could rally.

However, the backdrop of demand destruction and asset collapse, suggest the direction for gold continues to be to lower levels.

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 ‘Santa Claus’ Rally

September 10, 2022 By in $SPSIBI, 2007 - 2008, Biotech, Jerimiah Babe, LABD, LABD-22-05, Livermore, Loeb, Pinball Preparedness, Positions, SPBIO, TDA-LABD-22-02, Wyckoff 2 Comments

That Was it!

It’s going to be a very different place come December.

This won’t be like ’08 -’09, where all the stops are being pulled to ‘rescue’ the market.

No, this time really is different.

We can all see by now; the plan is controlled demolition.

Paraphrasing Jerimiah Babe, and Pinball Preparedness, we haven’t even got started (with the collapse) and the public’s already folding up.

What’s it going to be like when it really hits?

This past week, all the major indices have gone through some type of relief rally. Call it a Santa Claus rally because there probably won’t be one this December.

Trading Consistency

Throughout this upward correction, the case has been made over and again, only biotech SPBIO’s in a technical (and fundamental) condition that would allow it to decline farthest and fastest (not advice, not a recommendation).

Wyckoff analysis along with Livermore’s strategic approach that’s coupled with Loeb’s ‘focus’, has led us to (shorting) this sector exclusively.

Strategy, Tactics, Focus

Biotech SPBIO, Weekly Close

Looking at the far-right side of the chart, SPBIO rallied this past week. It looks like it may head higher … that is, until we put in the trend-lines.

Now, let’s put in the trendlines.

Extended trendlines show the downside potential.

We’re about to see how this works out.

Friday’s upward action in SPBIO slowed with inverse LABD, posting narrow (downside) action as well.

Ready to reverse.

Summary

Trading action in the past week amounted to reducing the position size in LABD-22-05, by about 4.6% (not advice, not a recommendation).

If and when SPBIO continues is downward trajectory, that position (shorting via LABD) will again be increased as the market allows.

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