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.
While the financial press (pictured at left) is fumbling around, trying to figure out if the market’s up or down, for this site it’s not about ‘up’ or ‘down’, but what the market itself is telling us.
Case in point, this past week.
Remember, at the beginning of the week, major brokers blew-up and locked up.
You couldn’t log-on whether long or short.
Surprising Speed
Posts on this site gave numerous clues (prior to last Monday), that we’re at risk of a downturn.
Two examples of potential downside were August 1st, Carvana’s ‘Interesting’ Numbers, posted here; the next day, Correction … or … Crash? posted here.
All released well before the Monday, August 5th, wipeout.
One thing to note as Ed Dowd points out (link here) is the speed of the downdraft.
Was this past Monday’s market action (and brokerage blow-ups) part of the new paradigm, the new normal?
With that, let’s take a look at what’s likely to happen (or set-up), next. The last post showed a potential short sale set-up (not advice, not a recommendation).
Finance Sector XLF, Daily
If price action continues higher, shown as the inserted back bar, the plan is to stand aside or exit, if short (not advice, not a recommendation).
Next, if we get downward action posting a new daily low, shown as the magenta bar, that’s a potential short entry (not advice, not a recommendation).
Of course, not shown is the scenario where the market does nothing and remains flat.
Based on last week’s hysteria and this additional update from Ed Dowd, link here, markets doing nothing seems to be the least likely outcome.
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.
Monday’s losses were (mostly) recovered by the close on Friday.
One might be inclined to think we can all get back to ‘normal’.
Normal, like rigged elections, poking the bear (expecting nothing bad to happen), attempted assassinations, fake data, falsifying employment records, more ‘visitors’ flooding in, you know, normal.
However, for anyone paying attention, the charts say we’re at The Danger Point® (not advice, not a recommendation).
The potential for biotech XBI, has been covered over the past few days (here and here), but we also have another potential set-up; the finance sector, XLF.
We’ll cut to the chase, with the chart.
Finacial Sector, XLF, Daily
It’s important to note: It was four days of retrace (upward) into the test; each day had less volume than the day prior.
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.
There’re a lot of moving parts to biotech and it’s like a game of chicken.
Is there going to be another ‘planned’ event pulled out of the bag that requires ‘protection’ or will this side (and this one) win-out before that happens?
Price action’s always the final arbiter and right now, it’s positing lower.
Gold:
Gold (GLD) ‘blipped’ higher on Friday and the usual suspects are out touting the hyperinflation narrative.
Owning (some) precious metals seems to be a good thing.
However, the public constantly knee-jerks into this sector and is absolutely rabid in their behavior (i.e., silver stockpiles are running out!!!).
It suggests at least, there’s something else afoot.
Prechter published in the early 2000’s, Central Banks, are followers, not leaders. The fact they are buying gold at this point, may be a contrary indicator.
Talk about going against the herd. 🙂
Over and again, it’s the boring (does not generate ‘clicks’) food supply first, then gold and silver (not advice, not a recommendation).
Real Estate:
What can be said?
It’s the largest manufactured bubble in world history and it has already popped.
Thinking it’s all going to sort itself out in a year or two is delusional. We’ve probably got decades of bear market.
Tesla:
Anyone with an anode of research capability, knows the whole EV premise, is based on a falsehood.
However, that fact is probably not what’s going to bring Tesla (and the rest of the market) down.
Let’s stop for a moment and consider the above link which has been available for nearly four-years.
How many views? Just 9,824 (as of this post)
That equates to only 0.003% of the U.S. population.
As the global supply chains implode, getting parts and having stable infrastructure (i.e., electricity) will probably be the defining factor.
Now, on to the charts.
Biotech SPBIO, Daily Close
The following sessions will let us know if we’re at the right edge of the downtrend line.
We’ve already had an up-thrust reversal and a test of that reversal. last Friday was lower … probabilities point down.
Gold GLD, Daily
Looking at the chart on the strategic, longer term, Friday’s blip is hardly noticeable. We’ve already presented how this could be a minor up-thrust (reversal) in itself.
To keep the upside intact, price action must remain and continue above current levels.
Real Estate IYR, Daily
Real estate may be working its way into an up-thrust condition. As shown, Fibonacci Day 21 from the October 13th, low is this coming Thursday, the 10th.
According to the Economic Calendar there are several potential catalysts that may push the price above resistance (temporarily).
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 table lists well known index ETF’s; along with most recent highs and current (Friday) close:
All the usual suspects are there:
S&P 500, SPY, The Dow 30, DIA, Nasdaq, QQQ, and on.
What’s also listed is how far each index (ETF) is from its most recent all time high or ‘recovery’ high (in percentage terms).
Obviously, one of these is completely out of bed: Biotech, IBB
We’ll be discussing the technical condition of biotech tomorrow. For now, the updated ‘project’ chart’s included below:
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® 