Category Archives: Wyckoff

‘Pivot’, or ‘The Channel’

August 6, 2022 By in CAT, Copper, CPER, Cramer, FMC, MRNA, S&P, S&P 500, SPY, Wyckoff, ZeroHedge

Who’s On First?

Evidently, according to this out on ZeroHedge, stocks will be a good buy when the Fed pivots; apparently getting back to 2%, inflation.

So many lies, half-truths and pre-suppositions, all in one sentence. Let us count the ways.

Actually, let’s not.

At this point in time, one does not want to draw any undue attention.

A better idea is to see what the market’s saying about itself. This is the crux of Wycoff analysis.

Wyckoff stated a century ago (1902, to be exact), stock prices moved based on an energy of their own; at times, completely disconnected from fundamentals.

Looking at those markets and from my own tracking spreadsheet, 106, indices or equities are currently monitored.

That list will change over time but it’s typically around 100 or more ticker-symbols.

Of that number, the following are those currently in a downward sloping trading channel.

The List

Looking at the charts on a weekly basis:

AEM, BBY, C, CAT, COF, CORN, CPER, CVX, DIA, DJ-20, DJUSBM, FCX, FMC, GDXJ, GLD, GM, HYG, IYR, PLD, SLV, TSM, USB, USO, WY, XLF, XOM, XOP

Others that may be about to confirm their channel:

IBB, MRNA, SPBIO, SPY

The Charts

Two examples are from the above list; the important part is we’re going to choose ‘heavy industry’.

Since nobody can seem to figure out the definition of ‘recession’, we’ll help them out a bit.

Caterpillar CAT, Weekly Chart:

The right trendline’s declining at approximately -67%, on an annualized basis.

Next up, FMC Corp.

FMC Corp., Weekly Chart:

FMC’s in a little better position with its right side declining at ‘only’ – 55%, annualized.

But wait, there’s more.

Since we’re on a roll; let’s throw in a bonus and include a market directly connected to the economy; Copper.

Bonus Chart:

United States Copper Fund, CPER, Weekly

Even with last week’s continued but fading S&P, short covering, CPER could not close higher.

Ruh-Roh.

CPER is heading south at a whopping -79%, annualized.

Ok, one more.

This one’s not quite yet confirmed but we’ll probably get a decision this coming week.

We saved the best (worst) for last

Moderna MRNA, Weekly

From the lows during the week ended June 17th, to last Friday’s high, was a Fibonacci 8-Weeks.

It’s also a near exact Fibonacci 23.6%, retrace.

On top of that, price action is testing the underside of resistance formed during the break below the 200-level at the beginning of the year.

If next week we see a pivot lower, MRNA’s potentially declining at a well-deserved, -84%, annualized.

Summary

We don’t have to listen to supposed experts and analysis ‘banter’. The charts themselves tell us the next probable direction, i.e., down

Who’s on First and What’s on Second.

The media?

Well, let’s just say they might find this link useful.

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

Before The Open

August 3, 2022 By in $SPSIBI, Biotech, LABD, LABD-22-05, Positions, SPBIO, Wyckoff

Adverse Move, Biotech

Let’s get straight to it.

Has the biotech short failed?

Just after yesterday’s post inverse fund LABD bean to pull back from its trend line, an early warning.

With that in mind, let’s take a look at the index LABD is supposed to track and see what it says; SPBIO.

Since we’re using the hourly chart of LABD, we’ll do the same for SPBIO.

Biotech SPBIO, Hourly

What we have is a spring set-up that’s now in progress.

The resistance area (magenta line) is well defined. Price action contacted this area yesterday.

Now, the pre-market shows we’re going to open above this area. Inverse fund LABD is trading in the pre-market, down a stiff -1.75-pts.

Spring-to-Up-Thrust

Over and again, markets repeat behavior.

Once of those repeating patterns is what’s called spring-to-up-thrust.

If that’s where we are now (a big if), price action SPBIO, will not stay at elevated levels long.

Summary

If we’re in yet another shakeout, the expectation is for price action to retrace the opening gap higher within the first hour of trading.

How price action behaves if/when that happens will help determine if we’ve had a failure; SPBIO, heading much higher or one more shakeout before 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

‘Off The Cliff’

July 29, 2022 By in $SPSIBI, Biotech, LABD, LABD-22-05, Positions, SPBIO, TDA-LABD-22-02, Wyckoff

It’s Official

With a new daily low printed for biotech SPBIO, we’ve got confirmation of yesterday’s sell signal (not advice, not a recommendation).

To show that biotech is the weakest of them all, an updated chart (below) has the major indices ranked in order of downside action.

Prices as of 11:12 a.m., EST

Index Table

It’s a no-brainer (almost).

Even with the recent rebound, SPBIO remains the weakest.

From a Wyckoff standpoint, if one is going to short the market, his approach was to select the weakest sector(s) as they’re likely to fall farther, faster.

It’s the complete opposite of the amateur who spends his time trying to pick the top of the highest flyer.

We’re interested in opportunity; not bragging rights.

Let’s go straight to the 3X Leveraged Inverse Fund LABD, hourly basis.

SPBIO 3X Leveraged Inverse LABD, Hourly

Slowly but surely, LABD is competing the spring set-up and testing action.

If you’re not looking, it’s nearly imperceptible.

However, we’re still at the stage where the test can fail. We’re still at The Danger Point®

A reasonable soft-stop would be today’s low @ LABD 26.21, with a hard stop at yesterday’s low @ LABD 24.60

‘Soft-Stop’ meaning, if it’s hit, probabilities of trade failure have just increased significantly.

Summary

As can be seen on the side-bar, we’re short this sector with LABD-22-05, and TDA-LABD-22-02 (not advice, not a recommendation).

If price action continues to proceed as expected, the next update will show a repeating trendline that’s sure to catch one’s breath.

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, Test-In-Progress

July 26, 2022 By in $SPSIBI, Biotech, LABD, LABD-22-05, Positions, SPBIO, TDA-LABD-22-02, Wyckoff, Wyckoff Stock Market Institute 1 Comment

By The Book

With about 40-minutes left in the session, biotech SPBIO, appears to be completing a test of its downside reversal.

Prior updates have shown the potential for a massive trading range; right along with a very weak reversal at Fibonacci 23.6%.

We’ve happened to locate a short video from the Wyckoff Stock Market Institute, detailing the nuances of Wyckoff spring action.

That video is linked here.

Watch the video and then look at the chart of leveraged inverse fund LABD, below.

SPBIO, 3X Leveraged Inverse LABD, Hourly Chart

If the test has competed, we can expect a swift LABD rally (spring) to the upside (down for SPBIO).

Summary

The potential for a significant down-move in SPBIO, has already been covered.

Reference updates linked here, here, and here.

If this is a move of major significance, we’re still in the very early stages.

Positions have already been established; LABD-22-05, TDA-LABD-22-02 (not advice, not a recommendation).

SPBIO itself, will define the next course of action.

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

Newmont Mining’s Collapse

July 25, 2022 By in GDX, GDXJ, GLD, Gold & Silver, Gold Miners, Inflation, NEM, Wyckoff, ZeroHedge

Where’s The ‘Inflation’?

As if on cue to support the prior post highlighting silver’s ‘mysterious’ decline, we have this just out, on Newmont Mining.

Newmont’s in free-fall.

For long-time visitors to this site, today’s events should be no surprise.

These reports, here and here, posted back in April, identified reversals in gold miners GDXJ, and implicitly GDX, to the day.

We’ll include a quote from the first linked report below:

“It’s a fairly safe assessment, nobody expects a downside reversal … nobody”.

And yet, here we are.

As the administration and the financial press, becomes ever more confused and bipolar; even now, re-defining the long-held definition of ‘recession’, we have Wyckoff analysis time and again, cutting through the media trash to determine the highest probability for the market.

Newmont Mining (NEM) Weekly

The chart below has current conditions for Newmont.

Also shown is the location of the first post linked above, released before Newmont began its decline.

At this juncture, NEM has penetrated long established support; technically it’s in ‘spring position’.

The expectation is for some kind of (weak) rally attempt. We’ll see if it’s able to get back above support.

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: Before The Open

July 21, 2022 By in $SPSIBI, Biotech, GLD, GOLD, LABD, LABD-22-05, Positions, SPBIO, TDA-LABD-22-02, Wyckoff 1 Comment

Last Session’s Record Volume

Depending on today’s action, yesterday may have been a ‘changing of hands’ for biotech; specifically, the leveraged inverse fund LABD.

We’ll start first with the longer time frame; the weekly, to show that SPBIO is at or near a Fibonacci 23.6% retrace.

Biotech SPBIO, Weekly

Looking just to the left of the right-side action we see a significant congestion area that’s highlighted below.

Note how price action has oscillated around that area.

It’s about three-months at this level before breaking lower and now, coming back to test.

The resistance is significant.

Next, is the inverse fund’s daily chart and the record volume.

SPBIO Leveraged Inverse LABD, Daily

Depending on today’s action, this is a potential ‘changing of hands’ from weak to strong.

We saw that such volume in the gold market (GLD) was indeed an infection point.

Concerning gold (GLD), back on March 20th, the report linked here, had this to say:

“From a Wyckoff, tape-reading approach, we have to trust what the chart is telling us.

That is, gold has reversed.”

How true that was. GLD never looked back and is now down around – 18%, from its highs.

The same could be happening for biotech.

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

Ahead of The Pack … China

July 11, 2022 By in China, FXI, TDA-YANG-22-01, Wyckoff, YANG, ZeroHedge

Wyckoff Analysis, Nails It

The last report on China, FXI, stated we’re in a Wyckoff set-up that was about to be tested.

More specifically, it said the leveraged inverse fund YANG, was in ‘spring’ position; ‘spring’ is opposite of up-thrust, because we’re looking at shorting the FXI, via inverse fund YANG.

Back then, two charts were provided with the most probable outcome of the set-up. One showed a ‘pass’ of the test and one showed ‘fail’.

Well, it’s obvious now; pass it is.

The original hourly chart is repeated below with the current chart (ninety minutes into the session) following.

Leveraged FXI Inverse YANG, Hourly

Prior to the ‘test’.

And now … ninety minutes into the session:

Back in the day, over a century ago, Wyckoff wrote that ‘somebody always knows something’ and that ‘something’ shows up on the tape.

What we in the Proletariat didn’t know last week, was this week, would bring us this report from ZeroHedge.

The important part is that Wyckoff analysis allowed one to see what was happening (on the tape) and position ahead of time (not advice, not a recommendation).

Positioning

The prior report on FXI contained the following:

“Risk on a position short FXI via YANG (not advice, not a recommendation) can be reduced by allowing YANG price action to retrace as much of the opening gap as possible.”

That’s exactly what was done with an entry made near the lows of the day.

For the haters (if any), here’s a reproduction of the entry exactly as it appears in the trade account:

Check for yourself if you like, that YANG was at 10.95, right around 10:51, a.m. EST.

The low of the day occurred several minutes later at YANG 10.90. The stop is set just below that low @ 10.89 (not advice, not a recommendation).

The trade’s identified as TDA-YANG-22-01. The ‘TDA’ references that a separate account (TDA Ameritrade) is being used for this position.

Hopefully, that’s enough ‘transparency’ and we can move on.

The Wyckoff Edge

Properly done (without being skewed by personal bias), there’s nothing else needed other than Wyckoff analysis.

It’s important of course, to understand the context of our (global) environment such as ‘everything’s going according to plan’ but allowing the mainstream to influence the analysis, other than providing a contrarian view, is an absolute waste of 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

The China Set-Up … Short FXI

July 8, 2022 By in China, FXI, Neil McCoy-Ward, Wyckoff, YANG 2 Comments

From One High Probability, To Another

The last update’s high probability set-up was negated at the next session … only to morph into another high probability.

We’ll go straight to the FXI, leveraged inverse fund YANG.

FXI, Leveraged Inverse YANG, Hourly

It’s about twenty minutes after the open and YANG is trading at around, 11.15 – 11.16.

The chart below shows a Wyckoff spring set-up in progress.

What’s missing at this point, what’s to be expected during this session or next, is the test.

That same hourly chart is marked up below to show how that test may look with a pass or fail.

Risk on a position short FXI via YANG (not advice, not a recommendation) can be reduced by allowing YANG price action to retrace as much of the opening gap as possible.

It’s Friday and we’re heading into the weekend.

Does anyone really want to be positioned long? 🙂

It’s not as if anything bad is happening.

Nothing like British Members of Parliament (and the Prime Minister) turning in their resignations … all staged but that’s a whole other story.

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

Eyes On China … FXI

July 6, 2022 By in China, David Weis, Dr. Elder, FXI, SRS, SRS-22-01, Wyckoff, YANG, YANG-22-02 1 Comment

Textbook (YANG) FXI, Short Entry

If the trade’s falling apart, get out.

That’s the admonition from Dr. Alexander Elder in his book ‘Come Into My Trading Room‘.

And so it was. Short position in real estate, closed out.

Even with all the analysis, real estate (IYR) has pushed higher. The short position via SRS (SRS-22-01) was exited just below the stop @ SRS 16.33.

Exiting a trade, frees the mind to look elsewhere for opportunity.

Typically, one would have to wait days or even a week or so for something else to be available.

However, despite appearances, the market is moving very fast at this juncture.

Looking around in those markets, we have a textbook entry signal (to go short) the FXI (not advice, not a recommendation).

David Weis & The Video

Many times, on this site (actually, for years), the Weis video has been recommended.

Next to Wyckoff’s treatise from 1910, Studies In Tape Reading, that video is probably the most important one could ever watch concerning the markets.

In it, he describes a ‘trick’ as he calls it, to get aboard a market that’s already underway. At the time, his discussion was using DE (if memory serves), as the trading vehicle.

That ‘trick’ is highlighted below on FXI

China Index FXI, Daily

This is how the chart looks early in today’s session.

Next, we’re going to invert the chart to mimic what’s seen on leveraged inverse fund YANG.

And now, the signal zoomed-in

The above price action is nearly exactly as presented in the Weis video; even though it was recorded fifteen-years ago.

The above signal is not a guarantee.

It is, however, a high probability low risk set-up (not advice, not a recommendation).

The entry signal was triggered at approximately YANG 11.75, with a stop at YANG 11.02, for a ‘risk’ of 0.73/share (not advice, not a recommendation).

Summary

As this post is being created, YANG is retracing and is currently trading near 11.67, narrowing the distance from any potential entry to the stop.

On a very long term (Monthly) basis, there are interesting things happening in FXI. We’ll be covering that soon in another 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

Active: YANG (YANG-22-02), entry @ 11.83, with stop @ 11.30

“The Big One” for Real Estate

July 6, 2022 By in IYR, Real Estate, SRS-22-01, Wyckoff

Subtle Clues, Time’s Up

‘Sometimes it seems as if the market hangs in the balance by the weight of a feather.’: Wyckoff, circa 1910.

Is this the big reversal to the downside?

Before we get to that answer, let’s review two recent market pivots (including today).

A Day To Remember

Back on May 4th, the post with the same title, linked here, was to be used for reference on a go-forward basis.

The post has a linked article, whose comment section could be surmised as the bourgeois rebuke of a 78-year-old fund manager.

That manager was quoted as saying, “It’s the biggest bear market of my life”; to which the younger crowd responded with derision, effectively saying the old man’s a dolt, an idiot, a doofus and needs to retire.

Now that time has passed, let’s remind ourselves when the quote was published with the daily (IYR) chart below.

Not only did IYR, not close higher after that, it never printed higher either. It was the top of the pivot reversal, to the day.

The 23.6%, Retrace

Then we have this report just days ago, showing IYR’s price action coming back to a (very weak) Fibonacci 23.6%, retrace.

The daily chart repeated below, showed the ‘risk’ on a short position as approximately 1.04-pts (not advice, not a recommendation).

Risk Narrows Even More

As a result of today’s new daily low and lower close, one can (theoretically) reduce the risk of a short position even further (not advice, not a recommendation).

The risk is now defined as the distance between today’s close (IYR: 93.32) and Friday’s high of IYR: 93.96

A subsequent push above Friday’s high negates the short and would likely indicate a potential move to a 38.2%, retrace.

Subtleties of The Market

A lower daily print and marginally lower close (IYR down just – 0.39-pts.) does not look like anything of consequence.

We’ll see about that, at the next session.

Stealth Crash?

Lastly, we have this and especially this.

Could we be right in the middle of a historic crash and not even know it?

Of course, it’s never for sure, until it’s over.

However, if shorting opportunities are being spotted, entered, and managed correctly, probabilities are that one will already be positioned short when ‘the big one’ hits.

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

Active: Positioned short via SRS (SRS-22-01), with stop at SRS: 16.38