Category Archives: ZeroHedge

Biotech Breakdown

December 11, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-21, SPBIO, XBI, ZeroHedge

Is The Channel Confirmed?

While confusion in the rest of the market rages on, Trump-bump, no-bump, consumer optimism never higher, back at the ranch, biotech XBI, is posting some ominous signs (not advice, not a recommendation).

With a backdrop of ‘the jig is up’ for some sectors, it’s possible, biotech is part of that (potential) long term reversal as well.

Biotech XBI, Daily

The work has already been done, showing the potential of a significant reversal, link here.

As stated in previous posts, the corporate account is positioned short; tracked via LABD-24-21, in the side bar above (not advice, not a recommendation).

Stay Tuned

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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

Short Squeeze ‘Exhaustion’

December 8, 2024 By in Car Questions Answered, KMX, ZeroHedge 1 Comment

Anybody Left, To Cover?

Has the market extracted just about all it can from the shorts?

Is the ‘consumer’ giving it the ‘last hurrah?

Are autos, real estate, about to implode?

When, will the plug be pulled?

The problem is, in the markets, when the plug (really) is pulled, it’s too late to get into a low-risk short position.

That work needs to be done ahead of time.

All of which, brings us to CarMax.

Company earnings are coming up in nine trading days, before the open.

CarMax KMX, Weekly

Let’s see if KMX, uses earnings as an ‘excuse’ for launch to 38.2% retrace level (or higher).

If or when that happens, it’s what happens next, that will tell us if there’s an opportunity to go short (not advice, not a recommendation).

Stay Tuned

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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

Copper’s (economic) Warning

December 7, 2024 By in Copper, FCX, ZeroHedge

As Copper Goes …

We’ve all heard the saying:

‘As copper goes, so goes the economy’.

While the financial press attempts to figure out the ‘real economy‘, one barometer of said economy, has already headed lower.

Copper’s initial top, more specifically, Freeport-McMoRan Inc., (FCX), was first covered in this post.

It’s been a struggle ever since.

Freeport-McMoRan Inc., FCX Weekly

The original ‘Up-Thrust’ data point is shown along with a (potential) terminating wedge.

After the top, were several tests higher; all have failed.

Now we’re at the wedge boundary, set for a breakdown (not advice, not a recommendation).

Looks like FCX, is showing us the ‘real economy’.

Stay Tuned

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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 … Slammed !!!

November 16, 2024 By in Dollar, Gold & Silver, Great Depression 2.0, SLV, UUP, Wyckoff, ZeroHedge, zsl Tags: , , 1 Comment

What’s Next?

We can see how the typical ‘investor’ would be angry; having believed the hype about silver’s imminent ‘hyperinflation’ launch.

Pontificating hype like, silver’s going to ‘catch up’ with gold, ‘go along for the ride’, ‘close the gap’, massive ‘physical demand’.

Well, this so–called ‘launch’ (so far), is not only not happening, but appears to be in a bearish divergence downside reversal … What???

Setting The Stage

From the recent high set on October 22-nd, to the close on Friday, Silver (SLV) is down -13.3%, a decent hit, but not quite a wipe-out, yet.

Putting that brief opportunity in perspective, during the same period 2X Inverse Fund ZSL, is up over 31.5%.

For a clue on what might be coming next, we’ll go to this anecdote, link here.

The so-called ‘environmentalists’ don’t even believe their own hype.

Not only that, if we’re already in an economic collapse, then silver, an industrial metal, is subject to the same forces.

Pulling Back The Curtain

If or when the new administration takes office (January 20th, is a long way away), we can expect a lot of truth (but not all of it) to come out.

That’s already starting, with the blow-up in biotech.

Random Thought: Wasn’t the dollar supposed to collapse by now? But, I digress.

Lets’ get back to silver (SLV), and what the price action is telling us.

Silver SLV, Weekly

With the situation below, what’s the most likely event for the coming week?

We’ve had four down-weeks in a row. Price action’s at the wedge boundary (blue line) and minor support (black dashed line).

Last week was a narrow range bar with less overall volume than the week prior.

Therefore, the most likely event, is an attempt to retrace the prior four weeks of down action (not advice, not a recommendation).

Stay Tuned

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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 Rate-ing Game

November 2, 2024 By in Bonds, Federal Reserve, Interest Rates, TLT, ZeroHedge Tags: , ,

Rates Spike Big Time … Who Could Have Guessed?

Let’s use the ‘Way Back’ machine with Mr. Peabody and return to this post.

Back in mid-August, that analysis presented rates heading higher (not lower), as more probable.

One month after that, this update showed a ‘terminating wedge’ in the bond market, TLT.

Now, two and a half months after the first post, the rate spike’s hitting the news.

Once again, you have to ‘subscribe‘ to find out what’s already happened. Hmmm

Contrary Indicator

The fact rates are just now in the mainstream, could (as we’ll see below) indicate a potential hesitation of downside or an upside retrace.

Long Bonds TLT, Daily Close

We’ll start first with the original ‘wedge’ post.

Now, for the updated version.

Obviously, there’s a lot going on in the chart.

Price action blew-through the measured move and has (potentially) culminated in a downside wash-out.

Or, behind Door Number 2, it could be a signal, rates are about to press-on higher like a juggernaut (not advice, not a recommendation)

The Fed Rides Again

Remember our last post on the Fed (possibly reversing the reversal), said to get your popcorn ready.

Looks like the show’s about to start.

Stay Tuned

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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

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