Category Archives: ZeroHedge

Real Estate … Stretched

October 21, 2024 By in Bonds, DRV, Federal Reserve, Interest Rates, IYR, Real Estate, SRS, TLT, ZeroHedge 2 Comments

Massive Wedge Pattern

Bonds (TLT) reversed on 9/17/24, the day before the Fed ‘cut’ and never looked back.

Rates continue to rise.

Meanwhile, real estate (IYR), has been whistling past the graveyard; that is, until now.

Real Estate IYR, Weekly

If the wedge is in-effect and we’re in a throw-over about to return into the pattern, it signals a very bearish condition (not advice, not a recommendation).

Even the illustrious financial press is starting to catch on that something’s not quite right. 🙂

Of course, you have to ‘subscribe’ for information like this.

As for this site, the current (bond) reversal was first identified and discussed, here.

Back then …

“Looking at the Fed calendar, link here, it’s a very interesting date; ‘the day after’ November 5th.

Let’s see if the ‘rate cut’ is immediately reversed (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

Bonds … The October Surprise

October 6, 2024 By in Bonds, Dollar, DRV, DRV-24-05, Federal Reserve, Interest Rates, IYR, Prechter, Real Estate, TLT, Usual Suspects, UUP, ZeroHedge Tags: , , , ,

Will The ‘Wedge’, Close The ‘Spead’

Bonds traded down hard last Friday.

With the reversal now obvious (since the Fed announcement, September 18th), we have the usual suspects putting out ‘content’ (here and here) letting you know what’s already happened.

In Prechter’s book, The Wave Principle of Human Social Behavior, he states, being part of the herd, is hard-wired into the brain.

Therefore, it takes diligent, consistent effort, to go against the mindless (limbic brain) herd if you’re going to make an objective observation.

So, let’s do just that, taking an objective look at the potential effects of the bond reversal.

Bonds (TLT proxy) began its reversal, rates higher, the day before the last Fed announcement.

The IYR, reached its high that Wednesday, 9/18/24.

Real Estate IYR, Weekly

It’s been nearly three years since the all-time high in December, of 2021. The wedge shown below has been just over a year in the making.

The reversal action of the past few weeks can be seen in the ‘Throw-Over’ area of the chart.

If the wedge has been identified correctly, price action has now entered back into that formation.

Positioning

This post highlighted a short position was on the horizon.

This post confirmed.

This post connected the dots with the bond market.

That same post presented a tentative stop above break even on DRV-24-05 (not advice, not a recommendation).

Trend or Not

We may know as early as tomorrow’s session (Monday), if IYR has established and confirmed a downtrend.

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

Semi Industry at Risk?

October 1, 2024 By in Artificial Intelligence, Livermore, NVDA, Semiconductors, SOXS, SOXS-24-17, SOXX, ZeroHedge

Potential Bottleneck

‘Surprises tend to come in the direction of trend’; Jesse Livermore

The potential all-time high (reversal) for Nvidia along with the A.I. bubble, was identified here and here.

If that analysis holds (it is, so far), we’re either in sideways congestion or outright reversal (not advice, not a recommendation).

A Funny Thing Happened

If its reversal, that’s when funny things start to happen.

Like the only ultra-pure quartz mining operation in the world; used for semiconductors, possibly knocked off-line.

That kind of funny.

This article, link here, details potential risk to the semi-industry.

It doesn’t look like the semis’ are waiting around to find out.

The SOXX, just opened lower, currently trading lower (as of 9:42 a.m., EST).

Semiconductors SOXX, Daily

If yesterday was the (up-thrust) test, it was on contracting volume when compared to September 26th’s, resistance penetration.

With this post coming out just before the open on the 27th, the implication was, a short position was about to be opened (not advice, not a recommendation).

Positioning

Entry in SOXS, was at 18.87, early in the session on the 27th; hard stop @ 18.60, the day’s low (not advice, not a recommendation).

Trade labeled SOXS-24-17.

Speculator’s Notes

The objective here is not necessarily to be ‘right’, but to minimize the risk.

With a ‘risk’ (distance between entry and stop) of just 0.27-points, a sizeable position can be opened.

Example. A ‘risk’ of $1,000 means position size is around 3,700 shares of SOXS.

At yesterday’s closing price (20.25), the position of 3,700 shares, would now be up a modest but decent $5,100.

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 … Breakout or Fake-Out?

September 17, 2024 By in $SPSIBI, Biotech, Bonds, Federal Reserve, Interest Rates, LABD, LABD-24-17, SPBIO, TLT, XBI, ZeroHedge 2 Comments

The Bull & Bear Side

The last biotech trade (going short) was back in August, as LABD-24-17.

The trade posted a -3.6%, loss and from then, the decision was made to stand aside.

The sector was not validating its up-thrust (bearish) set-up discussed many times prior; price action itself, showed something else at work.

Fast forward to now.

At this point, we’re at (upside) resistance and threatening to break out; biotech has made the news, link here.

Biotech XBI, Weekly

“What do you see?”

Shown below is a wedge formation, the likely premise for all the hoopla in the linked article above.

Also shown, we’re just ticks away from a Fibonacci 38.2%, retrace of the entire move; February 2021 highs to lows, May of 2022.

Possibly as important, the volume (magenta arrow); where is it?

Where’s the volume (demand) for this underperforming sector, rising into some kind of (potential) breakout?

If there is a breakout, which could be as soon as tomorrow’s Fed announcement, price action will be monitored closely.

Bond Digression

The Fed does what the bond market tells it to do (not advice, not a recommendation).

From the last report, the potential downside reversal, was negated and bonds (TLT) are at their own breakout (up-thrust) level.

That being the case, probabilities favor a rate cut; finally, after 1.5 years of mainstream jawboning on the topic.

Back to biotech.

If we do get an upside breakout and it fails … we’ll cover the downside potential at that point.

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

CarMax … At The Edge

September 15, 2024 By in ALLY, KMX, NVDA, Semiconductors, SOXX, Wyckoff, ZeroHedge

Wyckoff Masterclass

Just twelve days from now, CarMax (KMX) reports earnings.

With that, we already have the backdrop of auto loan implosions; the cratering of Ally Financial (ALLY), link here.

Everybody seems to be waiting for used car prices to decline; conditions may now be in place to support an auto sector markdown.

Price action of CarMax supports the idea that lower prices, at least for KMX, may be just ahead (not advice, not a recommendation).

CarMax KMX, Daily

Right now, and similar to semiconductors, KMX, is testing the underside of resistance.

Numerous Wyckoff characteristics are shown.

First, the up-thrust, with a test.

Then, a decline that includes a wide (modestly) high volume bar; now being tested, as well.

Price action at this juncture, is at a Fibonacci 38.2%, retrace of the entire move starting from the August 26th, high.

Bear Market Characteristics

As with Nvidia and the SOXX, KMX, is posting wide bars, huge gap moves.

In the six-months of price action shown above, KMX, has oscillated in a range that’s 35%, wide.

This is not bull-market behavior.

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

SOXX at The Crossroads

September 14, 2024 By in Artificial Intelligence, NVDA, Semiconductors, SOXS, SOXS-24-16, SOXX, ZeroHedge 1 Comment

Decision Point

The SOXX, has reached a crossroads.

Shown in the chart below and similar to Nvidia (yesterday), the SOXX, is also at a potential inflection point (not advice, not a recommendation).

Maybe, it’s time to cue up the blues music; it could be an appropriate moniker for the road ahead.

Semiconductors SOXX, Daily

“What do you see?”

Below, what the market is saying about itself.

If this chart is in-effect, that is, if the market’s ‘respecting’ the trendlines and trading channel, we’re at the spot where one could ask, ‘Where to from here?’

As always, anything can happen and we could somehow, magically, power on higher; probabilities suggest not (not advice, not a recommendation).

Contra Indicators

If indeed, this past week was the infection point for Nvidia and Semiconductors as a whole, the euphoric ‘technology‘ conference, might go down as the most significant contra-indicator of the A.I., bubble (not advice, not a recommendation).

Let’s not forget, those in the know are cashing-out like there’s no tomorrow.

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

Nvidia’s ‘Power-Play’ … Part II

September 12, 2024 By in Artificial Intelligence, NVDA, Semiconductors, SOXS, SOXS-24-15, SOXS-24-16, SOXX, ZeroHedge

Wide Swaths of Instability

The last report on Nvidia, link here, nailed-it.

It said that demand had evaporated as seen by Force Index (thrust energy).

Nvidia went on to plunge over 15% before yesterday’s (what must have been a) short squeeze.

Coupled with that, was short trade (SOXS-24-15) in the Semiconductor Index (not advice, not a recommendation).

Yesterday, pre-market action (being short) for SOXX, did not look right; that position was exited just after the open.

Net profit for SOXS-24-15, was about +23.25%.

The whole scenario shows the importance of having the price action itself dictate the trading action.

The squeeze ‘excuse’ was the CEO of Nvidia giving a speech, then going off to sign women’s breasts … I’m not making this up.

All of which brings us to the chart.

We’re keeping the same Fibonacci 8-Day timeframe as the previous update.

Nvidia NVDA, 8-Day

There’s a lot going in with this chart.

First: Price action has become wide and unstable.

Second: The completed 8-Day, bar posted the deepest downside thrust energy ever.

Positioning

Once again, everyone has their own method and style.

With that, understanding where we could be in this market environment, i.e., the throws of reversal, another (tentative) short was opened in the SOXX (not advice, not a recommendation).

The stop on this trade (SOXS-24-16) is very tight … to be set near the (SOXS) lows of the session.

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

Silver & Solar

September 7, 2024 By in Bonds, Interest Rates, SLV, TLT, ZeroHedge, Great Depression 2.0, Federal Reserve, Artificial Intelligence, PAAS, HL, CDE, NEXA, GORO, Solar Power 2 Comments

Looks Like Demand Has Evaporated

Those who ‘drank the Kool-Aide’ about silver being bolstered to astronomical heights because, you know, ‘solar energy’, must be a little upset by now.

Just like the fabled ‘interest rate cut’, it’s not happening.

Although for interest rates, we’re just shy of two weeks away to find out; meanwhile, since the last report, the bond market has been bid up again, pushing rates down (again), so, we’ll see.

Back to silver.

We have yet another so-called ‘green energy’ company going bankrupt. That’s not so much news, except for this statement from the report (paraphrasing):

‘Solar demand has declined across the entire industry’

Um, it’s called an economic depression (not advice, not a recommendation).

While we’re talking collapse, let’s just throw in the Chat GPT (Artificial Intelligence) collapse as well, link here.

With all of that as the backdrop, let’s see what silver is up to these days.

Silver, SLV ETF, Weekly

A terminating wedge with an MACD crossover.

We’re at the spot with price could go either way. There has been no wedge breakout to the upside, or down.

If we do get an upside breakout, the position of the MACD is set-up for a potential bearish divergence.

Covered many times on this site; the possibility that precious metals could move higher as a result of the miners imploding.

Adding to that idea are the components of tracking SILJ, silver miner EFT. How many of these outfits have an actual P/E?

PAAS does not, HL … no, CDE … no, NEXA … no, GORO … no, and on it goes.

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

Nvidia, ‘Whack’ & ‘Back’

August 29, 2024 By in Artificial Intelligence, NVDA, One Way Pockets, Semiconductors, SOXS, SOXS-24-13, SOXX, ZeroHedge

Distribution On The Way Down

It was a wild ride in the after-hours session and the pre-market.

As of this post (8:31 a.m., EST), NVDA is trading down about -4 pts., at 120.70.

The SOXX, is essentially flat, less than one point lower than yesterday’s close.

So, what to do?

Distribution

If Nvidia is following the script of typical market distribution, then it’s a low probability it will make a new daily high above yesterday’s 128.33.

With that said, the action is simple (but not easy).

Since there’s a position short, SOXS-24-13, the stop has been moved as shown in the chart below (not advice, not a recommendation).

Semiconductors, Leveraged Inverse SOXS, Daily

If Nvidia is in distribution, it will be interesting to see if price action follows the script as presented over a century ago, in One Way Pockets.

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 ‘Secret’ Lies With Bonds

August 25, 2024 By in Bonds, Federal Reserve, Interest Rates, Prechter, TLT, Wyckoff, ZeroHedge 1 Comment

What Happens, When It Doesn’t Happen?

‘The truth has no defense against the man determined to believe a lie.’

Unknown

It’s been proven many times on this site and by others more notable (i.e. Prechter), the Fed is not a leader.

They are followers; essentially reacting (not responding) to what the bond market is telling them.

Done Deal? … Not Yet

The financial press acts like a rate cut is a done deal.

However, when looking at the chart (i.e., the real leader), long bond proxy TLT, it makes perfect sense the Fed would propose a cut at the September 17 – 18, meeting.

It’s what happens between now and then, that’s important.

For clues as to what that ‘then’ could be, we go to the bond market itself.

Long Bond Proxy, TLT, Daily

“What do you see?”

There’s a lot going on in this chart; the mark-up (below) is divided into two.

First, is the targeted measured move (that’s been met) out of the wedge formation (not advice, not a recommendation).

Next, we’re also in a Wyckoff Up-Thrust condition which may have been tested on declining volume, this past week (not advice, not a recommendation).

At this juncture, it’s not unreasonable to say bonds (TLT) are at The Danger Point®

It would appear, the weight of a feather could move prices either way.

The interesting part will be what comes next; Sunday overnight Futures open, is about nine-hours away …

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