Category Archives: ZeroHedge

Pulling Back … The Curtain

August 22, 2024 By in Artificial Intelligence, Federal Reserve, Interest Rates, Semiconductors, SOXS, SOXS-24-13, SOXX, ZeroHedge

The Truth Comes Out

Here’s a different take on Wall Street’s ‘outrage‘ over a year’s worth of fake jobs data.

No, the outrage is not about the data being fake, the outrage may be the curtain has been pulled back, allowing the public to see the truth.

That truth, discovered by Wyckoff back in 1902, was price action has no connection to so-called economic numbers.

In fact, he said (paraphrasing):

‘Dynamics were operating on prices that had no relation to any fundamentals.’

If market action really was based on fundamentals, an historic revelation of 818,000 fake jobs, would have sent the indexes into a frenzy, which did not happen.

In fact, nothing happened

Now, we have ‘The Street’ putting the pieces back together (trying to re-hypnotize their clientele) and come up with another fake narrative; surely, the Fed will lower rates this time … honest!

Well, let’s leave the clown show (for now) and get back to some real, reality, the A.I. bubble.

Semiconductors SOXX, Daily

What do you see?

If you’re a long-time visitor (welcome back), by now, your market recognition should be near instant.

That is, we have a Head & Shoulders pattern (not advice, not a recommendation).

Nothing is ever perfect in the markets, but this one is near textbook.

Positioning

Shorting this sector is more than a little dangerous.

Just take a look at the gaps, volatility, huge percentage swings up and down, with leveraged inverse fund SOXS.

With that said, and with the danger in mind, a potential low-risk short (via SOXS) was established early this session.

The trade is labeled, SOXS-24-13, with a stop at the day’s low of SOXS 20.63 (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

Oil … Where’s The Bounce?

August 21, 2024 By in DRIP, DRIP-24-02, Great Depression 2.0, Oil, Oil & Gas, USO, XOP, ZeroHedge 1 Comment

Not Happening

There’s no oil bounce.

Not happening (not yet anyway).

Instead, oil looks like it’s heading off a cliff.

Weren’t we supposed be forming some kind of ‘tradable bottom’ because the sellers were accumulating?

That kind of bottom-think may have worked under more ‘normal’ conditions.

However, it should be obvious to all (with some still clueless), we’re not in normal conditions.

Hedge funds dumping oil, giving a heads-up, demand collapse is either coming or is already here.

Great Depression 2.0

Presented many times on this site (click sidebar ‘Great Depression 2.0’, for a list of posts) that we’ve likely gone straight past ‘recession’, into depression (not advice, not a recommendation).

If that’s even remotely true, we should see demand collapse in heavy duty areas of the economy like trucking, right along with job implosions.

Oh, wait, here it is … and here it is, again. 🙂

Back to the oil patch. Let’s include exploration and production (XOP) posting lower as well.

Oil & Gas: Exploration, Production, XOP, Daily Close

The last position short XOP, via DRIP was stopped-out for a minimal -1.24%, loss.

Re-positioned via DRIP during yesterday’s session (not advice, not a recommendation).

Trade labeled as DRIP-24-02.

The purpose of the prior channel notation is to show, XOP will at times exhibit channel (trending) behavior.

There’s only one right side (verified) contact on the latest channel, the magenta arrow.

However, the overnight market (10:57 p.m., EST) has oil futures continuing lower.

The expectation is for some follow through (downward) on the XOP, at the next session (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

Bonds, Oil & The Squeeze

August 13, 2024 By in Bonds, DRIP, DRIP-24-01, Oil, Oil & Gas, TLT, USO, Wyckoff, XOP, ZeroHedge

Bond Market Model?

According to this just out from our financial press, hedge fund managers have reduced holdings of Brent crude futures to ‘lowest levels on record’.

That condition supposes some kind of bullish bias and potential upside reversal.

Never mind the chart only goes back to 2011.

So, it’s really ‘the lowest in thirteen years’.

That’s hardly the hundred years or so, one would infer without digging deeper.

The Bond Model

Let’s not forget, bonds had a similar ‘maximum short‘ condition back in 2020.

Back then (like now), the ‘max-short’ was supposed to result in some kind of history making squeeze.

The result? It never happened.

Instead, bonds collapsed, rates launched higher and here we are today.

With that, let’s look at oil proxy, USO.

U.S. Oil Fund, USO, Daily

As of today’s action, it’s not looking too good for the bulls (not advice, not a recommendation).

It’s somewhat self-explanatory.

Price action is in Wyckoff ‘up-thrust’ position and with today’s reversal, appears to be confirming (not advice, not a recommendation).

As the earlier post stated, I’m already short the sector, DRIP-24-01, with a definitive stop defined as yesterday’s XOP high (not advice, not a recommendation).

If the ‘max short’ for oil really is the pre-cursor to an upward squeeze, we may be about to find out very soon.

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 … Tops-Out?

August 12, 2024 By in Dr. Elder, DRV, DRV-24-02, FAZ, FAZ-24-01, Financial Sector, IYR, Real Estate, XLF, ZeroHedge

Series of Lower Highs

Real estate may have been held up by the expectation of lower rates.

With those rates, it’s been on-again, off-again, then back on again, only to go back off again.

Let’s not forget the real possibility, the entire dataset (employment, jobless claims et al.) could be fake. 🙂

So, it’s a good thing with Wyckoff, we’re not looking at so-called ‘data’ but the truth; the price action itself.

Real Estate IYR, Daily

We’ve got a series of lower highs.

No doubt, the price action is very subtle … slowing eroding away without much fanfare.

With this morning’s session, we have a new daily low.

If short, a good place for a stop would be yesterday’s high (not advice, not a recommendation).

Housekeeping.

From the last post on XLF, today’s session has essentially been a combination of the two scenarios.

As a result (and according to the trading plan), the short FAZ-24-01, was closed with a marginal profit of 0.62%.

The sector may still go into a sustained decline. However, it did not perform to expectations and therefore, exited.

As Elder said years ago, ‘when in doubt get out.’

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

Positioned For Trouble

August 3, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-16, SOXS, SPBIO, Wyckoff, XBI, ZeroHedge 1 Comment

When The Tide Goes Out

We all know the quote attributed to Buffett:

‘When the tide goes out, that’s when you find out who’s been swimming naked’.

Or, to put it another way:

‘Everybody’s a genius in a bull market’.

Well, ladies and gentlemen, here we are.

We’re about to witness what method’s best suited to handle typical ‘price destruction’ behavior of a bear market (here and here) along with possible chaos in commodities.

That challenge also includes this site of course.

Bear Market Behavior

If we’re really entering a bear market, prices typically do not go straight down unless there’s an outright crash.

No …Bear markets are all about what’s called ‘price destruction’.

That is, price action whipsaws a near infinite number of times; getting into (a short) position for the downside or (long for) an upside squeeze is incredibly difficult.

The most recent example of this was the volatile whipsaws in 3X leveraged inverse fund, SOXS:

Swings over +/- 20%, back-to-back in days if not hours.

With that said, we’re looking at biotech XBI, to see if there’s a chance of it being ‘well-behaved’ during a decline (not advice, not a recommendation).

Biotech XBI, Weekly

On a weekly close basis, we’ve had a double top.

Using the MACD, it shows momentum weakened on the leg up to the second top.

Watching price action (the tape) of XBI late Friday, near the close, it gave the appearance of short covering.

Upward spikes that appeared to be labored.

If that’s true, then a lower open at the next session would be the expectation (not advice, not a recommendation).

Taking Action

As the disclaimer states, this site is ‘not certified’ by the SEC and does not, cannot provide any advice.

What it can do, is infer the actions being taken.

With that said, this update shows the ‘category’ side bar with LABD-24-16, thus inferring a short position via LABD.

That’s the firm’s identifier used for spreadsheet tracking; the 16th biotech short via LABD, for the year.

Never Too Early, To Trend

In the next update, we’ll discuss how even in the early stages of (potential) XBI reversal, we may already have a trendline.

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

How To Use ‘Seasonality’

July 21, 2024 By in Livermore, Seasonality, SOXS, SOXS-24-12, SOXX, Trump, ZeroHedge

Three Months of Down

For the next three-months, until the end of October, the (net) seasonality of the markets is down.

That’s not all.

According to this link, we have a bevy of technical and fundamentals suggesting the overall direction of the markets is to lower levels (not advice, not a recommendation).

Lower is good … at least if one is positioned short.

With that, we’ll look at the semiconductors, SOXX, to see how seasonality might help on a (potential) short position.

Semiconductors SOXX, Daily

If the channel remains intact, we’re still at the beginning.

Of course, the very next session can completely blow this analysis apart. That’s the way of the markets.

For now, however, we do have a channel, we do have the above-mentioned seasonality; probability and pressure is to the downside (not advice, not a recommendation).

Turkey & Position

For those familiar with ‘Reminiscences‘, and ‘Turkey’, a.k.a. Mr. Partridge, we should all know the importance of maintaining position.

The objective, therefore, is to attempt to maintain a short position (via SOXS, or other short) as long as possible, given the trading channel and bearish bias (not advice, not a recommendation).

Simple But Not Easy

One of the very first things the Online Trading Academy (Dallas) told their class back in the day, working the markets with a profitable plan of action should be ‘simple’.

They also said, the problem is, it’s not easy.

Here’s just one unrelated example of a simple job (i.e. ‘protection’) that’s obviously, not easy.

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 A.I. Rope … Just Broke

July 17, 2024 By in Artificial Intelligence, NVDA, Semiconductors, SOXS, SOXS-24-12, SOXX, TSM, ZeroHedge

So, It Begins

SOXX, pre-market, down a solid -3.2%.

Taiwan Semi (TSM) is the primary reason with its own trading down over -5%,.

If this really is the top of the A.I. bubble, the potential (now apparent) reversal was covered well in advance, here, here, and here.

If this is not the top and there’s more to go, the SOXX would need to retrace significantly, find support and thrust energy to mount another rally (not advice, not a recommendation).

Note: MACD indicators are bearish divergent on both daily and weekly.

Making It Up, As We Go

Of course, the press has to make up a reason for the pre-market rout. So, for today, we have this and this.

Tomorrow is a whole ‘nother story, literally 🙂

Semiconductor SOXX, Weekly

The blue arrow notes only one other time (in history) in the SOXX, where downward thrust exceeded that of week ending, April 19th.

Otherwise, we have the usual suspects: Terminating wedge, dissipating energy, Fibonacci correlations for chief cook and bottle washer Nvidia, link here.

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

Nat-Gas … Another Set-Up

June 30, 2024 By in Natural Gas, UNG, Wyckoff, ZeroHedge

Watch For The ‘Bounce’

Nat-Gas, UNG, is at support right now.

So, what happens next?

Before we get to that, let’s first be aware of what’s being presented to the public. This recent link, says that upon increase in production, ‘go short’ (absolutely, definitely, not advice, not a recommendation).

So, the advice is, somehow tie the fundamentals to a trading action?

Given that going short on increase of production would even work (I wouldn’t do it), how is anyone going to figure out whether those numbers are real?

So, we choose not to play the game and instead, go straight to the truth, price action.

Nat-Gas UNG, Daily

First, it’s important to note the ‘Risk At A Low’, area.

That’s the location of this update.

With price action now at support, anything can happen.

There could be an immediate bounce, downside penetration, or some combination.

Note that Force Index (purple rectangle), shows action as ‘well behaved’.

That is, there’s no apparent craziness as was seen to the far left of the chart with wide swings in Force Index.

If UNG, does bounce higher from here, it increases the importance of the support level.

That, in turn, gives us a ‘heads up’; keep watching for a subsequent downside penetration and possible Wyckoff ‘spring’ set-up.

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

Neural Plasticity … Be Flexible

June 26, 2024 By in $SPSIBI, Biotech, Dr. Elder, LABD, LABD-24-13, SPBIO, Uneducated Economist, Wyckoff, XBI, ZeroHedge

Reviewing The Plan

From the outset, the premise for biotech XBI, was this:

We’re in a huge up-thrust, several years in the making (not advice, not a recommendation).

With a set-up that big, downside potential was projected to be just as big, link here.

Then came the hard part, validating the premise and getting into position.

Nural Plasticity

So, it’s been on again, off again; a total of seven short trades; LABD-24-06 – LABD-24-12, with an eighth, LABD-24-13 opened, as of today.

The entire (closed) series has been profitable.

However, during that time, assessment of (major) downside potential shifted from confidence to caution, and now back to confidence.

‘Sticking to one’s guns’, no matter what the market (the tape) is saying, is a sign of real trouble.

The market itself directed the entering/exiting.

With that, let’s move on.

The ‘New’ Paradigm

Reviewing the host of ‘experts’ in the press and YouTube alike, (except for UE), everybody has their reason on why nothing (bad) will happen until after the ‘election’.

The last go-round should have broken that paradigm completely; but no, we’re still hanging on.

The ‘new’ paradigm is probably, ‘no’ paradigm. 🙂

From a Wyckoff perspective, the financial press is to be ignored except for when data releases are scheduled.

What’s in the release is not important; it’s the time and date itself, warning of potential volatility.

Biotech XBI, Daily (inverted)

Once again, inverting the chart to show the short-side (LABD) potential (not advice, not a recommendation).

Note: The dashed blue lines, an extension of the support level shows we’re also in a potential spring set-up at one higher timeframe, the weekly; more background, link here.

Positioning

As noted above, a new short position was opened via LABD, during this session (not advice, not a recommendation).

Typically, discussion of open trades within the trading community is (or should be) taboo. As Elder said years ago, there’s the real risk of ‘ego’ causing errors in discernment.

With that said, I might exit this trade at any time, without notice, without explanation.

Veteran traders will agree with that statement; when something’s ‘off’ with a trade (only known to them), it’s time to get out.

Nonetheless, a hard stop for today’s position would be yesterday’s LABD, low of 6.97 (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

The Moderna Reversal

June 19, 2024 By in $SPSIBI, Biotech, Dr. John Campbell, Elliott Wave, IBB, Livermore, Loeb, MRNA, PFE, Prechter, SPBIO, Wyckoff, XBI, ZeroHedge 1 Comment

When Price Action Heads South …

Said many times;

‘When price action heads south, bad news comes out.’

That’s a slightly different take on Prechter’s (Elliott Wave) observation.

‘Price action leads the news; not the other way around’.

Going to BigCharts, typing in MRNA, shows they still have no P/E.

So, the ‘bad news’, can’t be they’re not making any money because they’re not doing it, now. 🙂

I wonder, who can it be now?

For a clue to the (potential) answer, we can look at what’s happening to Pfizer, link here and here.

However, let’s not get ourselves wrapped around the axle on events, forecast years ago.

Rather, let’s go straight to the truth, the price action and see what it’s telling us.

Moderna MRNA, Weekly

The entire move from low to highs is shown. Included on the chart, are two Fibonacci indicators.

One is the standard ‘retrace’ indicator; the other, is a ‘projection’ indicator.

The ‘projection’ is based off the ‘a-b-c’ move from the lows of November 2nd, 2023, to the highs on May 24, 2024.

The retrace and projections are hard to see, so the ‘Detail‘, arrow is where we’re headed next on the daily.

Moderna MRNA, Daily

If there ever was a chart to once-and-for-all, refute, dismiss, trash, the whole ‘Fundamentals’ argument, that earnings, interest rates or some other ‘Voodoo economics’, moves prices, this is it:

MRNA, price action hit the 23.6% retrace level (exactly) for two days before moving on to hit the 161.8%, projection (exactly) before reversing.

Note the ‘100%‘ level as well; price action confirmed this area (exactly) three times! Once on the way up and two times on the way down (third time, not shown).

A century ago, Livermore said, ‘It’s all about the numbers’.

Strategy, First

Just as Livermore was primary a strategist, so is this site’s method of analyzing the markets, i.e., Strategy, Tactics, Focus, in that order (not advice, not a recommendation).

The news has been replete with reports like this one and this one.

Another panic ahead?

Sounds like it but at least in the case of Moderna, the chart itself says (effectively):

‘There’s no money in it’.

That means, another wave like we saw several years ago, is not the most likely future event (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