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.
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 bear market; we have non-stop headline induced whipsaws, never-before seen extremes, massive downdrafts followed by (face-ripping) short covering squeezes.
Then, there’s the ‘fatigue’:
“Investor Fatigue Has Set In”: Goldman’s Desk Summarizes The Key Market Themes, link here.
Judging from the links below, the professionals (seem to) have an idea of what’s likely; the other side (the retail side), remains clueless or confused.
‘Depression Cycle Is Here’ Charles Nenner Warns “It Will Be Much Worse In 2026”, link here.
As Professional Traders Panic Sell, Retail Investors Just Can’t Stop Buying., link here.
The recent sharp recovery has shown us where to go for short-side opportunity.
One such sector, is the healthcare industry (not advice, not a recommendation).
Health Care Select Sector SPDR, XLV, Daily
The wedge is obvious.
Typical classical analysis market guidelines for wedge:
Whatever direction was the entry, that’s the (most likely) direction for exit (not advice, not a recommendation).
If there is a downside exit, we’ll discuss measured move(s) at that time.
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.
If things don’t change soon, the wheels have come off the bond market (not advice, not a recommendation).
At this point, it’s common knowledge the (U.S. Treasury) bull market of forty-years, ended in March of 2020.
It’s been nothing but rates ratcheting higher, ever since.
Recession Reversal … Where?
However, a strange thing happened on the way to the anticipated bond reversal … typically, a long-time indicator of an impending recession.
Just weeks ago, during the market meltdown with the largest trading volume ever recorded, bonds did not respond as expected.
The Blip
During that wipe-out, bonds (TLT) blipped higher into a false breakout, a Wyckoff Up-Thrust, and have since collapsed on the largest weekly downside (thrust) energy and volume ever seen.
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.
We’re letting the market decide what support/resistance, trendlines, and Fibonacci levels are significant.
We’ll even make an attempt to pick the timeframe(s) that best describes current action.
There’s a lot going on in a market sense, as well as ‘behind the scenes’ with revelations like this, and this, and this.
With that said, we’re looking at the 3-Day chart and Fibonacci levels.
Biotech XBI, 3-Day
The 3-Day is being used; it best shows current trending action (planned for next update).
The XBI, has near perfect (Fibonacci) symmetry.
Price action has made its way back to the 23.6%, level, and is hesitating.
Watching the action in real time, XBI gives the sense it does not know quite what to do … is it in a pause, gathering steam to move higher, or was the massive squeeze, on Wednesday, the 9th, all there was?
Positioning
As stated in the earlier update, XBI action on the 15th, put it at The Danger Point®; the location where risk was least for a short position (not advice, not a recommendation).
It’s been slow going since then (ratcheting lower) but the one thing XBI, is not doing … is moving significantly higher.
More trade discussion, stop levels, link here (not advice, not a recommendation).
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.
First, it was this (RFK Jr., nominated, then confirmed), then it was this, and now, the latest is this.
While the financial press toys with the idea ‘the worst is over‘, (which might be true), with biotech, price action itself says it may be preparing for its next leg … lower.
Biotech XBI, Hourly
We’re drilling down to the hourly; it shows (as of 12:24 p.m., EST) a Fibonacci a-b-c, corrective retrace.
Wave ‘a’, was the massive short squeeze.
Wave ‘b’ was a test of the lows; then on to wave ‘c’, the same (net) distance as wave ‘a’, making it a 1:1 (potentially complete) corrective move.
Also note the ‘alternation’.
Wave ‘a’, was essentially straight up. Then, wave ‘c’ alternates and is a labored slow process, ratcheting higher.
We’re at The Danger Point®, where the risk of a short position is least (not advice, not a recommendation).
Currently short, Trade: LABD-25-08, with stop at the LABD, session low (not advice, not a recommendation).
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.
To answer that question, or at least look at the probabilities, let’s step away from the breathless, me-too herd, and see what’s really going on.
Silver, One Year Later
Before we get to what the crowd’s doing now, as a reminder, last year at this time (the crowd said), silver was supposed to be launching into a hyperinflationary breakout.
Remember that? Well, it didn’t happen. 🙂
This site posted for months, price action itself (SLV) indicated the probabilities were low for a sustained breakout, starting with this link.
However, there are times when the masses are correct. Is this one of those times?
Let’s take a look.
First, The Hysteria
To get a gage on what’s going on, we have a sample of the current mind-set, listed below.
‘Sell America’ Trade Sparks Gold-Rush, Dollar Crush As US Bond Yields Surge Most In 43 Years, link here.
Gold Euphoria, Bond Mayhem, Dollar Disgrace, link here.
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.
You can’t make this up. Those two headlines (above) were one after another on ZeroHedge.
That’s probably enough. You get the idea. 🙂
In the case of Carvana, let’s look at what the price action is telling us is the most likely event.
Carvana, CVNA, Daily
After-Hours on April 2nd, trading posted briefly at 243.6, within the purple oval, creating an ‘Up-Thrust’.
Last Friday’s action penetrated support and is holding.
Note the price range of that day’s bar is less than Thursday’s, with volume slightly larger.
For now, CVNA, has stopped dead at support.
There may be follow-through on Monday, but with the (YouTube) crowd and others expecting a ‘crash’, that makes is less likely (not advice, not a recommendation).
When a real expert warns of a crash, it may look something like this (time stamp 6:42).
Note the condescension from the other panel member.
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.
If the trendline is in-effect, meaning the market’s hanging in mid-air in a false breakout, getting back into that trend may result in some dramatic downside action.
Well, we got the dramatic downside.
Biotech XBI, collapsed nearly -11%, and 3X Inverse Fund LABD, is up +38%, and climbing.
As Wyckoff said a century ago:
‘Someone always knows something … and that ‘something’, shows up on the tape.’
It turns out in this case, showing up on the tape, was this, and this.
Biotech XBI, Daily
The chart from the week-ago post, has been updated.
As is typical, the ‘reason’ for last week’s price action comes out later, after the fact.
Positioning
At this point, trade LABD-25-05, is being maintained (not advice, not a recommendation).
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.
Corporate Insiders Scramble To Buy Their Own Stock As Buyback Blackout Period Begins. Link here.
Last but not least, my personal favorite 🙂
Recession Canceled: US Industrial Production Jumps To Record High. Link here.
David Weis 1980s
Back in the 1980s, the late David Weis was a bond trader.
He published a series of trading articles using Wyckoff analysis; in one of those, this comment stood out (paraphrasing):
‘We considered none of these things …’
That is, stay focused on what the market is saying about itself. Ignore the press and any other distractions.
With that, we have Carvana.
Carvana CVNA, Daily
What can be said?
After penetrating support, some kind of bounce is expected … except, so far, it’s not happening.
This post is coming out before the regular open.
CVNA is trading a couple points higher (pre-market) but nowhere near the nearest 189-ish, resistance area.
The Fed has yet to announce their shenanigans for the day; that itself, could cause a bounce higher … or not.
While the press chases after squirrels and gold, the market itself (CVNA) is saying, if it can’t retrace higher but pivots down, it indicates significant weakness (not advice, not a recommendation).
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® 