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.
Provided many times on this site, the assessment we’ve gone straight past recession and directly to: ‘The Greater Depression’, or ‘The Great Depression 2.0’
By now, we’re all aware of this data, just out from ZeroHedge.
That data is at the ‘peak’ or the depths of 1932, and we in our current market, haven’t even got started!
The Fed’s interest rate announcement is due out at 2:00 p.m., Eastern, today; does it really matter?
We can see with unbiased observation; the wheels have already, irrevocably, been set in motion.
The economy along with the ‘elephant’ that no one talks about, are juggernauts on a downward course.
The 1929 Crash, Then Bull Rally
Remember, the big market speculators of the early 1900s typically made their fortunes on the way down (not advice, not a recommendation).
Let’s also not forget, one of, if not the largest market rallies up to that time (in percentage terms), happened right in the middle of The Great Depression.
Of course, to trade that mid-1930s rally, you had to have the capital to do so.
Which brings us to the next topic: Real Estate.
Real Estate IYR, Weekly
With yesterday’s new print high, we’re at Fibonacci Week 34. That puts us at a potential trading channel or inflection point as discussed in this post.
There’s no guarantee of a trading channel or even a reversal.
However, we do have a confluence of events; upside volume (pressure) declining, marginal new highs and the potential Fed pivot point, due out today.
It’s about 20-minutes before the open. Let’s see what happens next.
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 are nine other supplemental data points for the economic mayhem, collapse, collapse-in-progress scenario; they are listed at the end of this post.
For now, we’re talking about real estate and specifically the proxy for the sector, IYR.
Real Estate IYR, Weekly
As stated in the last post, we’re going to follow-up with a potential IYR, downside reversal by covering three more technical points; Fibonacci time correlation, thrust energy and trading channel.
First up: Last week completed a Fibonacci 34 (-1 week) time frame that may result in a reversal into a trading channel (shown on second chart).
Upward force (Thrust Index) declined significantly over the prior upward push during the week of 1/13/23.
The weekly chart has been compressed and trading channel lines added.
Internal trendlines are printed as grey dashed lines.
As shown, we’re at ‘Week 34 (-1)’.
If this market’s in reversal and adhering to a Fibonacci time sequence, we could see an immediate reversal or another minor high next week to make it an even 34 or go one additional week to make it 34 (+1) weeks.
Either way, we’re at The Danger Point®
The 1929 – 1932 Trading Channel(s)
Here’s a bit of insight you’ll not find anywhere else.
Research and data gathered by my firm, has shown markets tend toreverse just before, during, or just after a Holiday Week.
In our case below, The 1929, all time high was 379.61, posted on September 4th; the Tuesday following the Labor Day Weekend.
The final low and subsequent reversal was 41.81, posted on July7th 1932; the Thursday following the July 4th Holiday:
There are at least three main trading channels in effect for the entire (nearly) three year down move.
Trading channels are an old and repeating characteristic of the markets.
Real Estate Re-Cap
The all-time high in real estate IYR, was 116.89, posted on December 31, 2021, the Friday before the New Year’s Weekend.
Since then, there have been several trading channels in effect; at this juncture, we may have yet another.
With the data links provided at the beginning and the links at the end of this post, sustained price action to the downside is more probable (not advice, not a recommendation).
This coming week is likely to be quite interesting as the Fed continues on its path of price and demand destruction.
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
Addendum
Congratulations on reading this far. You must be serious about your work. Supporting data for the bearish case is below.
‘Some of the best market traders are former Marines.’, Prechter
That’s a paraphrased quote from Robert Prechter Jr., given during an interview in the early 1990s.
The inference: Marines succeed at trading because they have been conditioned to endure and perform while being in pain … physical and mental.
On the other hand, the financial press, being ever so helpful during this unprecedented collapse, is all too happy to help analyze the situation by catastrophizing on how ‘painful’ the market feels.
If we go to Jerimiah Babe at time stamp 1:36, the mainstream press is still touting ‘The consumer is strong’.
In other videos, Babe, has shown how devastated the real estate market really is … ‘boots on the ground’ reports at vacant malls, empty parking lots and new (unoccupied) housing developments that stretch for miles.
With that backdrop, let’s look at what the price action of real estate is telling us … is the consumer strong?
Real Estate IYR, Weekly
There are so many things happening in IYR, it will probably take several updates.
At this point, price action exhibits the following:
Currently in Wyckoff ‘Up-Thrust’ condition, potential reversal
On a close basis, IYR has retraced 38.2% of its entire move.
Repeating trend line(s) underside test.
Trading channel that’s a Fibonacci 34 (-1) weeks wide.
For the week just ended, Force Index is divergent (54.7%, weaker) than the last push higher.
We’ll look at the first three of those, below.
As the market came to a close on Friday, price action pushed through established resistance (and axis line) to end the week higher.
Price action’s in Up-Thrust condition, The Danger Point®
Next, we have on a close basis, a Fibonacci 38.2% retrace as well as testing the underside of a resistance/trend-line.
In the next update, we’ll discuss the possible trading channel and the pressures (Force Index) behind the last move higher.
There Will Be Great ‘Wringing Of Hands’
As always, anything can happen in the markets. The above is not advice or a recommendation.
Next week, we can expect the Usual Suspects to come out and provide their ‘expert analysis’ on what the Fed is likely to do or not.
The Fed on the other hand, has repeatedly said what’s it’s going to do; that is, raise rates.
Interest rate sensitive real estate already appears ready for reversal.
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.
Nemont Mining (NEM), Gold, and the Oil & Gas Sector are at a critical juncture.
The rest of the major indices, Dow, S&P, QQQs, real estate (IYR), and so on, are in a similar position.
For this update, we’ll focus on Newmont (NEM), as it’s the largest cap in the Senior Mining Sector GDX, and a general representative of the commodities markets.
Financial collapse is a process, not an event.
Newmont topped-out in April, of last year. Exxon, the proxy for the Oil & Gas sector, may have reached its highs this past November.
Where’s The Inflation?
As Michael Cowan has just reported, banks are absconding with depositor’s money under the guise of ‘bail-in’.
If the fiat cash is so worthless, why are banks seizing it?
As Robert Prechter Jr., said years ago, ‘all fiat cash ultimately goes to zero’; the end game (most likely) for the dollar. However, it could be months, years, or even a decade before that happens.
For right now, today, this minute, the data is showing us, the banks want the money; ‘Show me the money‘.
With that, let’s look at the non-existent ‘inflation’ in the mining sector.
Newmont Mining NEM, Weekly
The first chart identifies the heavy volume and then test of wide price bars. This behavior is common in the markets; they tend to come back and test wide high-volume areas.
Next, we see there’s a terminating wedge developing as volume declines; the inference, is lack of significant commitment at these price levels.
We’ll get close-in on the wedge; last week printed a lower weekly low and closed lower for the week.
There’s no breakdown of the wedge … yet.
At this juncture, it’s up to the bulls to show they’re still in control.
Inflation vs. Scarcity
We have without a doubt, the effects of the event from the past three years gaining momentum. Whether or not those effects reach a peak this year, is unknown.
A lot of the mainstream and YouTuber’s alike talk about the upward move in gold as the result of ‘inflation’.
Here’s a little bit of insight you’ll not find anywhere else; how about gold rising because the above mentioned ‘effects‘ are causing production volumes to decline?
Maybe it’s because of scarcity (along with nearly everything else) that’s causing the increase in price.
Just to drive that idea home, the latest total gold production numbers, listed here.
Gold production for 2020 dropped -8.2%, from the year prior. Year 2021 was down -1%, from 2020.
From 2010 to 1019, gold production increased or was flat year over year … that is, until 2020.
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 was a larger than expected crude inventory build, as ‘the consumer is weaker than expected’.
The ‘consumer’ is not weaker than expected, they’re tapped out.
There’s real potential, events accelerate from here.
The reversal in the sector, XOP, was anticipated to happen on Friday, tomorrow.
At this point, it looks like it came early.
The daily chart of XOP, below shows a reversal at the Fibonacci 50%, retrace.
Oil & Gas XOP, Daily
The next chart zooms-in on the reversal.
We’re about fifteen-minutes before the regular session and set to open lower.
Look for the market to print lower, then attempt a rally as a test of the reversal.
That retrace, if it occurs, may be a low-risk area for a short via DRIP (not advice, not a recommendation).
If the anticipated test fails, and price action makes a new daily high (above yesterday’s print), it’s then likely the sector is on its way to all-time highs.
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.
Something’s not right in the precious metals sector.
Gold’s just off -8%, from its highs while other monetary metals (Palladium, Platinum, Silver) are far below their highs; silver’s off a whopping -51.75%, from its 2011, highs.
In addition, as we’ll see below, silver (SLV) is just now contacting the right side of a trend line and potential downward channel structure that goes all the way back to the lows of 2015.
The ‘Squeeze’ of 2021
Below on the weekly chart of SLV, is a point labeled “1”.
That’s the location of what turned out to be a right-side trend line contact. Back then, an update on the ‘squeeze’ was posted, linked here.
Taken from that update was the following (emphasis added):
Those attempting garner forces (the little guy) to move the markets, such as silver, will find out soon enough who’s in control … and it’s not them.
It’s unlikely silver is going higher any time soon. There could be some upward spasms as the crowded trade exhausts itself; it’s likely we’ve seen the SLV highs for quite some time.
So, here we are nearly two years later; SLV never posted higher than the February 2nd, squeeze of 2021.
So, what’s next? Is there something else going on?
We’ll look at that question after the charts.
Silver SLV, Weekly
First, is the un-marked chart.
Next, we see a pattern that’s not so clear without mark-up.
For SLV, to break out, there needs to be an absence of motivated sellers (prices drift higher) or sufficient buying demand to overcome the downward trend.
Inflection Point
For an idea of what’s likely to happen next, we’re going to go to an unlikely source; Daniela Cambone and Gregory Mannarino.
It’s not about ‘controlling’ inflation and it never was, going all the way back to 1913. It’s about the ‘end game’, as discussed by Mannarino.
“Eliminate The Middle Class” (time stamp 11:40)
The sticky wicket is the ‘debt bubble’ and the ‘elephant’.
The Elephant Grows
The chart of silver (and other precious metals) and its non-confirmation with gold, could be an indicator of debt collapse and demand collapse first, before hyperinflation.
Multiple times a day now we have reports like the following flooding into the marketplace:
COVID Vaccines Are “Obviously Dangerous” And Should Be Halted Immediately, Say Senior Swedish Doctors
Multiple Young Athletes And Former Athletes Died Suddenly This Past Month
Doctor Calls For Withdrawal Of Pfizer, Moderna COVID-19 Vaccines Following New Research
The above list is just since yesterday and it’s only 2:00 p.m., Central Time, today!!!
Monetary & Manufacturing
Silver is unique more so than gold, in that it’s an industrial metal as well as monetary.
The collapse in manufacturing demand could be the reason silver’s not confirming gold’s move.
It may also be telling us, as the effects of the elephant take hold, a huge liquidation of all assets could be coming; paradoxically as the need for fiat cash (not precious metals) to pay off debt, increases.
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.
It’s a good thing we’re not listening to the financial press as the market’s ‘Call The Fed’s Bluff’; we would’ve missed the set-up.
Let’s bookmark this post (like the last one), come back in July or so, and see how the poker-hand with The Fed played out.
Three guesses on who’s going to win and the first two, don’t count. 🙂
With Delta, it’s not the Fed they have to worry about. A series of events were set in motion (i.e., pilot ‘shortage’) that may not get fixed for years to come.
Moving on, let’s take a look at what the price action of Delta (DAL), is telling us.
For brevity, we’ll go straight to a marked-up (and time compressed) weekly chart of DAL.
Delta Airlines DAL, Weekly
DAL spent nearly a year building a ‘terminating wedge’ before breaking down during February of 2020.
Hmmm, February of 2020, what was happening back then?
That breakdown, coupled with the terminating wedge, and it’s almost as if someone knew something; time enough to position massively short or buy put options.
Subsequent retrace off the 2020 lows, were at lower and lower Fibonacci levels … with the current retrace at 50%.
The Options Trade
Dr. Alexander Elder describes (Come Into My Trading Room) one way to trade options that few attempt.
That is, instead of buying long dated options and then waiting for the slow burn down of capital, the lesser-known method is exactly the opposite.
In his book, he describes buying short-dated OEX (S&P 100) Put options for 3/8ths … back in the day when the market traded in fractions.
Two days later, he sells the options for 17, a 4,433% gain.
Taking that method and applying it to the daily chart, we have the following.
Delta Airlines DAL, Daily
On Friday, there was a huge gap-lower, open.
Price action spent the rest of the session attempting to close the gap. Volume increased substantially from Thursday’s session (up +46%)
Yet, price action was not even able to touch the lows of that session; Friday’s high of 38.29, vs. Thursday’s low of 38.32.
It’s a nuance that may have meaning or not.
The Short Trade
As shown on the chart, a position was opened with a Put; strike at 35, and priced (at entry) at 0.09 (not advice, not a recommendation).
Following Elder’s method, the price and short expiration, says there’s no hope for this trade.
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.
Let’s see if the market’s ready to hand it to this sector. What’s the price action telling us.
Biotech SPBIO, Weekly
The weekly chart shows the potetial breakout.
However, since we’re looking at this from a ‘going short’ perspective (not advice, not a recommendation), the chart following this one is inverted.
When we invert the chart, it takes on a whole different look.
Biotech SPBIO, Weekly (Inverted)
If price action’s spent over three months getting where support has been penetrated only to have it fail into a reversal, the ensuing move has massive potential.
In Wyckoff terms, it’s cause and effect.
The ’cause’ has been three months of congestion. The ‘effect’ is a potential long duration, or wide volatility move.
Before The Open
It’s twenty minutes before the open and 3X leveraged inverse fund LABD, is trading higher by about +3.5%.
This is normal behavior whether we have a reversal or not.
One last check of ZeroHedge, before releasing this post turns up this:
Senator Questions CDC On Why It Claimed No ‘Unexpected Safety Signals’ For COVID Vaccines
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.
Was that the day where irrefutable evidence like this is going to stick?
Price action of Biotech Sector IBB, has posted a long awaited and anticipated reversal signal (not advice, not a recommendation).
We’ll look at that below.
The IBB, Up-Thrust & Reversal
As a reminder, in Wyckoff terms, an ‘up-thrust’ is where price action struggles above known resistance for some period of time and then reverses to the downside.
In the case of IBB, that ‘struggle’ lasted an incredible seven-weeks.
Biotech IBB, Weekly
Price action attempted to break above resistance for nearly two-months, before reversing lower.
Then we had an initial test during the week of 12/23/22 (on the daily for three days), and a secondary test last week.
Biotech IBB, Daily
The daily shows more detail on the struggle.
Point No. 1, was the initial test. Point No. 2, was the secondary test which appears to have decisively failed.
Pre-market action shows IBB, set to open slightly lower.
If it does, then expectation is for some (brief) attempt to rally as a test of the breakdown.
The Driving Force
For years, this site has not wavered in the assessment, what’s happening in this sector, will be the driving force for the entire market on a go-forward basis (not advice, not a recommendation).
Anything can happen.
It’s unknown if yesterday was ‘the day’.
What is known however, evidence is building on a massive scale. Every day, sometimes multiple times a day, we see the effects.
Positioning
This site presents the data, the insight and price action nuances. It does not give recommendations.
With that said, going short this sector is not as straightforward as the other major indices.
IBB, may be shorted directly but will likely result in a maintenance fee from the broker.
Of course, that puts one on the hook for the sector’s dividend payment (currently yielding 0.31%).
The other option is 2X leveraged inverse fund BIS.
However, this fund’s volume is thin … meaning it’s not nearly as liquid as the other inverse funds such as SDS, DXD, QID, SOXS and so on.
It’s up to the trader/speculator to participate or not.
We’re about fifteen-minutes before the open. Let’s see what happens next.
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.
