Category Archives: Wyckoff

Newmont Holds The Key

December 18, 2021 By in DUST, GDX, GLD, Gold & Silver, Gold Miners, Livermore, NEM, Positions, Spring-to-Up-Thrust, Wyckoff 3 Comments

‘Last Man Standing’

Founded by William Boyce Thompson in 1916, Newmont (NEM) was around over a century ago during Livermore and Wyckoff’s day.

Thompson is center in the photo with President, Warren G. Harding at left.

Wyckoff and Thompson were interconnected.

In Wyckoff’s autobiography, he writes about working for Thompson’s firm (Thompson, Towle & Co.) in 1910.

During that time, he describes no fewer than two stock ‘manipulation’ schemes; one by renowned James R. Keene and the other by Thompson himself during a deal-gone-bad with the Guggenheims.

Also in 1910, Wyckoff published his seminal work: Studies In Tape Reading. If there’s any one book to read concerning how markets work, ‘Studies ..’ is that book.

Wyckoff had first-hand exposure into market operations by the wealthy and super wealthy. More importantly, he saw how those transactions showed themselves on the tape.

Last check, a first edition ‘Studies’ went for around $3,500. A quick search as of this post, turns up nothing currently available.

For those who complain ‘it’s rigged’, to that we can say, ‘it’s always been rigged’.

Determine what those ‘rigging’, are trying to accomplish and you may have a trade.

Now, to the market at hand: Newmont Mining.

It’s the key; the largest cap equity in the Senior Mining Index (GDX).

Newmont, NEM

The daily chart:

For those who have been with this site for a while, you may instantly see the set-up: Spring to Up-Thrust.

The marked-up chart makes it clear.

Moving in a little closer for additional clues:

We can see from the volume itself, there were a huge number of transactions this past Friday.

NEM penetrated long established resistance.

In so doing, it set off a massive number of orders: Buy orders, sell orders, sell-short.

Senior Mining Index: GDX

The other part of the story and the one that weights it to the bears:

While NEM, is at multi-month highs, senior miners GDX, is nowhere near its highs.

Daily chart, GDX:

What does that mean?

It means the market is ‘thinning-out’

The professionals and maybe some investors alike, are abandoning the non-performing lesser cap equities; pouring funds into the last man standing NEM, in hopes that it will keep moving higher.

It’s desperation and signals market weakness.

As always, anything can happen and bulls may somehow take control.

However, from the charts themselves, hyper-stretched major indices coupled with insiders bailing out the most in history, uneducated ‘retail’ willingly stepping up to hold the bag, it does not look good for any bulls … gold or otherwise.

Summary:

We could find ourselves in a situation similar to the oil market in mid-2014 where it spontaneously deflated for eighteen months … nary a blip higher all the way down.

With that, we’re maintaining short via DUST (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

Inflation … Hot or Not ?

December 10, 2021 By in Dollar, DUST, GDX, Gold & Silver, Gold Miners, Inflation, Livermore, Wyckoff

Monetary Does Not Equal Asset

If there ever was a CPI report to completely break the ‘inflation’ narrative, this was it.

Several articles, here, here, and here, all saying essentially the same thing … skyrocketing ‘inflation’.

If that really was true, why is the 5,000-year-old hedge against inflation (gold) not responding … and even worse, heading lower?

That’s because, it’s all rigged, man !! (cue, Tommy Chong).

Well, it has always been rigged.

Both Wyckoff and Livermore talked about that ‘rigging’ way back in 1921, when Wyckoff interviewed Livermore about his trading methods. Later, in 1922, a series of articles on Livermore was published in Wyckoff’s ‘Magazine of Wall Street’ (a forerunner to Barron’s).

The point is, we’re not interested in who is doing the rigging. That’s what the press tries to find out (a waste of time). The real question is, what are those ‘rigging’ trying to accomplish?

Answer that, and you may have a potential trade set-up.

We’ve got supply chain, controlled-demolition with corresponding asset price inflation; the kicker is, gold and the dollar, say we’re in some kind of monetary deflation.

Senior Miners, GDX Confirming Trend

Price action in the gold market and the miners confirm that (deflation) assessment … for now.

Zoom-in on trend line contacts.

Summary

Based on the articles linked above, if there ever was a data-set release that would launch gold (and the miners) higher, today would be the day … right?

Both Wyckoff and Livermore did not concern themselves with what ‘should’ be happening. They were focused on what ‘is’ happening.

Gold and the miners are (and have been) moving lower.

As yesterday’s post said, we’ll remain short (not advice, not a recommendation) until the market itself says to exit.

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

Gold Miners … Test & Reverse

December 7, 2021 By in DUST, GDX, GLD, GOLD, Gold & Silver, Gold Miners, Van Metre, Wyckoff, ZeroHedge

Any Buying Support Left ?

Not if you look at the volume profile.

Steven Van Metre, in his Sunday Night Charts (time stamp 12:20), shows the precarious situation of GDX.

There’re about 90-minutes left to go in this session.

It looks like GDX is/has tested underside resistance and down-trend simultaneously. For GDX to break higher, it would have to get through that resistance.

As always, anything can happen but we need to remind ourselves, the gold bulls are already trapped … having bought at the mid-November breakout.

If still holding, they’re now deep in the red.

Under such conditions, each down move serves to set the (bear) hook even more.

If we use this just released article from ZeroHedge, we’re nowhere near any kind of capitulation and upside reversal.

Senior Miners, GDX

The un-marked daily chart

And now …

With zoom

We’re at a confluence of resistance; the downtrend and the underside of price action.

Let’s keep in mind, the overall markets (S&P, Dow, Nasdaq) are still oscillating around their all-time highs. Volatility has increased as the trend appears to be changing.

Gold and the miners are nowhere near all-time highs.

A century ago, Wyckoff showed how to spot markets that would decline the fastest and farthest under bear market conditions (not advice, not a recommendation).

It’s not the high-flyer we’re looking for … no, it’s the laggard.

That’s the one to pick.

It’s already weak and once the buoyancy of the general market evaporates, the bottom may fall 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

Gold Bulls Continue On

November 18, 2021 By in DUST, Ed Seykota, GDX, GDXJ, GLD, GOLD, Gold Miners, Positions, Wyckoff, ZeroHedge

Even As The Miners Reverse

After attempting to breakout higher over the past six trading sessions, the miners are posting signs of a nascent reversal.

Even so, the bull calls continue.

The latest round includes two more articles from ZeroHedge:

Gold Breakout Imminent !

The first part describes some technical details that are all true … after that, well, you decide.

Turns out, gold is going to skyrocket because of Russia !

I suppose, anything can happen.

We get fundamentals and anecdotal data as the reasoning for a Russia driven up-side breakout.

The problem with fundamentals is, they don’t work.

They never have worked.

Wyckoff discovered this a century ago when he said (from his autobiography) that ‘stocks move based on a power of their own. That power, has nothing to do with fundamentals.’

Trading genius Ed Seykota repeated that truth during his interview for ‘Market Wizards’.

He called them ‘funny mentals’ and went on to say he nearly, if not always lost money using them.

Gold shhh …

This article’s so good that I have to pay to read it.

From reading the shaded area, we can infer a similar (bullish) discussion to the first link above.

Sorry, not interested.

Summary

This time really could be different. Gold could launch into a sustained upward breakout.

However, the charts (GDX, GDXJ) at this juncture, are saying ‘not yet’.

Maintaining short (not advice, not a recommendation) via DUST … which is now in the green.

Stay Tuned

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

‘Stealth’ Reversal, Oil

November 2, 2021 By in David Weis, DUG, Oil & Gas, Positions, Wyckoff, XOP

XOP Lower Open, Signals Weakness

Nobody’s Looking

A higher XOP open would have probably been a short set-up (DUG) failure.

However, that’s not what happened.

The open was lower but then price action went on to post a new daily high above yesterday’s.

At this juncture, the short set-up is still valid (not advice, not a recommendation).

How can a new daily high be acceptable for a short position?

Repeating Set-Up:

Back in August this post was created to help document a market behavior that’s probably been repeating since the beginning.

My former mentor, David Weis used to call it ‘Spring to Up-thrust’, using Wyckoff’s terminology.

The fact the set-up’s been repeating for decades, if not a century or more, is definitive proof traditional valuations and fundamentals have nothing to do with actual price movement.

That’s a topic for another time.

XOP Analysis:

We’ll start with an un-marked XOP daily chart:

It doesn’t look like much is going on. So, let’s zoom into the far right side using the 15-minute, below:

Ok, what am I supposed to see?

Marking up the chart, we have the following:

Once we have the correct annotations, it’s obvious XOP just posted a ‘Spring to Up-thrust’.

True, it’s on a minor time frame like the 15-minute; however, it does give a clue XOP, could be in for a more significant and longer-term reversal (not advice, not a recommendation).

Positioning:

If XOP is somehow able to post another new daily high during this session or subsequent, most likely it would be time to exit our short position (via DUG, not advice, not a recommendation).

For now, the expectation’s for continued oscillation below today’s high … while XOP figures out if that’s all there is for the up-side.

Stay Tuned

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: Last Squeeze ?

October 28, 2021 By in Biotech, LABD, Positions, SPBIO, Wyckoff

Whack The Bears One-More-Time

The daily chart above, shows our current location.

Inverting the chart and expanding the price action gives us the following:

Was today an attempt to break the up-trend (down-trend, non-inverted)?

Wyckoff called this type of sharp adverse move ‘threatening action’.

You won’t know if the market’s going to carry out the threat until the next session or subsequent sessions.

Positioning:

My firm’s (core) short position remains unchanged (not advice, not a recommendation).

However, the main account holding of LABD, was reduced by approximately 2.9%, during this session to adjust for margin requirements.

It’s important to note, the after hours session is already trading about 1% higher (for inverse LABD); a typical occurrence when the day’s move was a shakeout.

We’ll see if that action carries over to the regular session tomorrow.

Stay Tuned

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, Repeating Set-Up

October 26, 2021 By in Biotech, LABD, Positions, SPBIO, Wyckoff

If Set-Ups Repeat, Why Bother With The News?

Because, it’s the news that’s pushing around those who are easily manipulated, causing set-up(s) to materialize.

Decades ago, Wyckoff said that a speculator, will never be successful in the markets until they can completely ignore the news.

Sure, it’s important to monitor the news … but not for the purpose of speculating or investing.

Keep track of it to identify what they’re trying to accomplish. What’s the desired outcome for their press releases? Who are they trying to influence and maybe ask why?

Wyckoff went on to say (paraphrasing).

‘Put the other traders and speculators to work for you. Stand aside and let them spend their own money to drive prices into a high probability set-up.’

With that in mind, last week’s ‘Shakedown’ update on biotech SPBIO, and inverse fund LABD, said this:

“Because LABD, price action has hit the 21.40 area three times and rebounded, … it could, … could head lower for a penetration and spring set-up.”

Well, today was the penetration and spring set-up 🙂

Inverse Biotech Fund LABD

Hourly Chart

We’ve had the penetration of support … the rebound as well as what looks like a test.

Expectation for LABD, is to move higher from here to the top of the trading range.

Positioning:

My firm remains short SPBIO via LABD (not advice, not a recommendation).

Biotech’s showing weakness in the face of all-time highs in the S&P as well as the Dow.

What’s going to happen to ‘already in a bear market biotech’, when the overall markets reach their final top?

Stay Tuned

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

Moderna (injections) Suspended

October 23, 2021 By in Biotech, LABD, LUV, MRNA, SPBIO, Wyckoff

Biotech, Bricks In The Wall

Complete Implosion.

This site’s been steadfast for over a year; biotech above all others, has the highest chance of sustained, long-term collapse.

‘Collapse’ is an overused word these days. It may have lost some meaning.

How about the word ‘exposure‘?

Biotech has the highest chance of being exposed (not advice, not a recommendation).

Sweden Suspends Moderna:

There it is out in the mainstream: Indefinite suspension.

About a week ago, the fist bullet item in this list discussed Moderna; that when price action reverses to the down-side (after being a market darling), the lawsuits start.

It’s not the lawsuits themselves, but the discovery process that’s part of the trial … if it goes to trial.

One can guess with some assurance, the last thing Moderna wants is for this baby (any potential lawsuit) to go to discovery and trial.

This could be one of those times, popcorn is justified; watching it all from the sidelines.

Southwest Backs Off:

Looks like greed is more powerful than jabs.

At least we can see the priorities and keep that for future reference.

Now, all-of-a-sudden, it makes no sense to destroy executive stock options with forced collapse of the organization.

Glad we have such genius executives in charge. 🙂

Meanwhile, Back At The Ranch:

While all that’s going on, we still have the financial press talking about earnings and sales and ‘pent up demand’ like any of that is important or actually real.

The only reality at this point in time, is the price.

Biotech SPBIO, Inverse Fund LABD Analysis:

We’re going to start with the un-marked chart of SPBIO:

Next, we’re going to invert that chart; giving a better perspective of what the inverse fund LABD, is tracking:

Repeating a previous observation; price action over the last two months (from late August to now), has calmed down.

Price range has narrowed and movement looks orderly.

Our take on this; bears have assumed control and are preparing (opening positions) for a directional move.

Compared to my firm and probably anyone reading, their capital is unlimited. They’re also patient.

Depending on the level of greed, they’re keeping price action from a major breakout until positioning is complete (not advice, not a recommendation).

Wyckoff termed this phenomenon (a century ago) as the ‘composite operator’, or the ‘central mind’.

This is how markets work. There’s no getting away from it.

By making a transaction, any transaction, one has implicitly entered the ‘arena’ where the gladiators (the professionals) are ready to take all you own.

Moving in a little closer, we already have a trend.

Price action bounced off support on Friday (resistance on the inverted chart) but closed nearly unchanged.

Summary:

When you have satire like this and especially at time stamp 6:35, the pressure continues to build … almost from all sides.

My firm remains short SPBIO via LABD (not advice, not a recommendation).

That is, until the market itself says the bearish analysis is wrong or it’s time to exit.

Stay Tuned

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

Shifting Sand

October 19, 2021 By in Biotech, David Weis, LABD, Positions, SPBIO, Wyckoff

Or … How To Spot A Change Of Character

Art & Science: Interpreting price action requires both.

Since the September 2nd, high in biotech SPBIO and low for inverse LABD, the character of the market has changed.

Price action has become tight and orderly.

Typically, when that happens, someone (some entity) is gaining control. They are preparing the market for a directional move.

That’s the science part; the observation part.

Art is ephemeral. You don’t know if it matters to the subject at hand or not.

You won’t know until it becomes obvious.

In the markets, when it’s obvious, it’s too late.

News Of Note:

Within the past few days, there have been at least two news stories of note: Here and here.

It’s not really the stories themselves but what they represent.

Go to time stamp 8:10, at this link. That’s what it’s about.

The so-called controlling entities may be in the early stages of consuming each other.

What does that have to do the the markets and specifically biotech? Those thinking they were safe and getting fake ‘protection’ could be realizing, maybe they didn’t.

Maybe it was the real thing.

Mid Session:

SPBIO (Inverse, LABD):

The market’s had a change in character.

Whether or not the above links were the reason, just part of the reason or not at all, won’t be known until long after the market opportunity has passed.

We’ll start with the un-marked daily chart of leveraged inverse fund LABD:

Tight price action identified:

Now, it gets interesting.

We’ll zoom in on part of the tight area using the hourly chart:

LABD has oscillated around support and then penetrated that support as shown.

Price action rose dramatically from there. We’ll label it as a sign of demand (Wyckoff term).

Next, we have the testing action. David Weis used to call it “The Gut Check”.

Tests can either pass or fail. That currently puts LABD at the danger point.

Positioning:

My firm’s position remains unchanged: Short biotech via LABD (not advice, not a recommendation).

Summary:

As this post is being created, LABD is moving up off the test lows. So far, overall price action has been well behaved.

Thus far, there has been no major (news generating) price break.

That type of controlled movement allows large positions to be built carefully and quietly (not advice not a recommendation).

Stay Tuned

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

It’s Your Fault !

October 9, 2021 By in Biotech, GDX, GLD, GOLD, Gold & Silver, Gold Miners, Great Depression, Prechter, Wyckoff 2 Comments

‘You’re The Problem’

Here’s one guy that finally figured out gold’s not moving higher as expected (as he has been touting) in anticipation of ‘rampant’ inflation.

As a reminder, this site stated from the outset, there’s little-to-no inflation.

Prices going up are the result, in large part from the intentional destruction of the supply chain.

Why that’s happening is a topic for another time. One clue is, if you’re starving, you’ll do whatever you’re told.

However, let’s not digress.

So, what’s the reason gold (and silver) are not moving higher? Well, that’s easy:

It’s because of you!

Yes, you the ‘investor’ are the problem. You are the reason that gold and the mining stocks are not moving higher.

You can’t make this stuff up.

Since he (Schiff) ‘put it out there’, his reasons are fair game for discussion.

Performing A Public Service:

In a way, the linked article is a fantastic public service.

Just like the biotech sector intentionally euthanizing (a polite word for what’s really happening) its customer base, here we have another entity calling out its own followers as the problem.

It’s similar to the rabid, mindless, one-way (only goes up) gold bulls crying ‘it’s all rigged’, when their pathetic attempts at analysis don’t work out; we now have another entity citing YOU as the problem when the forecasts fall flat.

This is yet another so-called financial source that can be permanently crossed off the watch list.

Brutal, But Beneficial:

Admittedly, the ‘tone’ of the posts on this site are not for everyone.

Even mild-mannered Dan at I Allegedly, finds himself responding to snowflakes that complain about his ‘get ready’ posts.

There’s good reason why the average are so ignorant.

For those who were actually listening in middle-school, the history books conveniently leave out the part where millions of Americans died of starvation during the Great Depression.

No pictures of emaciated bodies. Nothing.

With what’s coming, we’re likely headed for mass casualties in one form or another. The financial community refuses (from what I’ve seen) to discuss this up-coming event.

For example:

If you’re still using a ‘financial advisor’ and they’re not talking about, or don’t know about the elephant, do you really want to be (paying for and) taking direction from someone who’s that lazy, fearful, or ignorant?

Prechter, said it himself when he stated, the next mega bear market’s going to wipe out the ‘wealth management’ industry.

We may be on the cusp of that now.

Not Advice:

With that said, this site does not, and will not give financial advice.

Each person has his (her) own situation in life. You are the one to decide on your next direction or action.

What this site does do, is attempt to provide analysis and supporting price action data on what’s really going on.

What’s the market saying about itself?

If you’re still reading, that was a very long intro to get to our topic for the day: Gold miners, GDX.

Wyckoff Analysis: Senior Miners, GDX

What we see from the weekly chart is straightforward.

GDX, has been channeling lower for about a year:

The next chart shows we’ve penetrated support and are now testing the underside.

Of note: GDX is in ‘spring’ position. An upward attempt is to be expected.

If GDX was to break out and start a sustained bull move, this would be the spot. We’re at the danger point.

In my view, the participants in this sector are borderline delusional, if not completely insane.

They disregard what the market’s actually doing; holding to a (so far, for years now) unverified belief that ‘$10,000/oz gold, is just around the corner.’

It could very well be … but only after the (possibly, soon to be) starving stackers have sold off their hoard to buy food.

One has to wrap their mind around the fact, we’re being subjected to a long term diabolical plan.

Thinking and acting with that long game in mind (in my view) provides at least a hope for not only survival, but positioning to prosper during the on-going collapse.

Lastly, here’s a link to a previous analysis on GDX.

Decide for yourself whether or not that information provided a service and/or was useful and timely.

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.