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 that’s where we are now (a big if), price action SPBIO, will not stay at elevated levels long.
Summary
If we’re in yet another shakeout, the expectation is for price action to retrace the opening gap higher within the first hour of trading.
How price action behaves if/when that happens will help determine if we’ve had a failure; SPBIO, heading much higher or one more shakeout before lower levels.
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.
Sometimes you feel like an idiot and sometimes you don’t 🙂
Question: How do you know where the market’s going to go?
Answer: Put in your stop; that’s where it goes.
The stop level mentioned in yesterday’s update was not physically placed in the market but a mental identifier; indicating if the LABD trade was subject to failure.
As if on cue; no sooner was the stop posted than today, the market heads right for it.
In or Out
With the level being tagged so easily, it means that one’s thinking is right along with the amateurs, doing the same thing. Ouch.
So, price action penetrated the LABD 26.50, lows.
It’s what happened next that’s important.
It took less than one hour for LABD, to reverse off the lows and begin to print decisively higher.
Therefore, we just witnessed a run on the stops.
At the trader’s discretion, LABD-22-05, was maintained throughout the stop-run process.
The hourly chart of 3X Leveraged Inverse Fund LABD, provides detail; note LABD got itself back above an existing trend line.
SPBIO 3X Leveraged Inverse LABD, Hourly
Time is approximately 2:11 p.m., EST
Typically, a ‘bump-and-run’ move like this signals the kick-off for price action.
Summary
Biotech appears to have gyrated enough at the extremes to frustrate both the bulls and bears.
With today’s run, we may now be ready for a directional move; LABD to the upside.
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.
Biotech has similar price action to gold (GLD), back when it changed hands (link here).
The 3X Leveraged Inverse Fund LABD, shows the detail.
SPBIO, 3X Leveraged Inverse LABD, Daily
The message of LABD, is straightforward if you know where and how to look.
We’ll start first, with the un-marked chart.
The record volume spike is obvious and noted below.
Immediately after the record volume, LABD shows a change of character; it’s reversed to the upside.
The next chart points out that LABD, just finished three consecutive up closes with heavy volume.
There have been higher single day up volume(s) but not ever three in a row at this (elevated) level.
The inference: This reversal is or has potential to be significant.
Summary
Starting on July 12th, and all through the reversal, a short position (LABD-22-05), has been and continues to be accumulated (not advice, not a recommendation).
There have been minor adjustments (small exits) throughout, but the core position has been maintained and increased as the market allowed.
As long as LABD, price action remains agreeable, stays calm, potentially ratcheting higher, the plan is to continue to increase the position until volatility or hitting the stop prevents further action.
Current stop is now located @ LABD 26.21 (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.
With a new daily low printed for biotech SPBIO, we’ve got confirmation of yesterday’s sell signal (not advice, not a recommendation).
To show that biotech is the weakest of them all, an updated chart (below) has the major indices ranked in order of downside action.
Prices as of 11:12 a.m., EST
Index Table
It’s a no-brainer (almost).
Even with the recent rebound, SPBIO remains the weakest.
From a Wyckoff standpoint, if one is going to short the market, his approach was to select the weakest sector(s) as they’re likely to fall farther, faster.
It’s the complete opposite of the amateur who spends his time trying to pick the top of the highest flyer.
We’re interested in opportunity; not bragging rights.
Let’s go straight to the 3X Leveraged Inverse Fund LABD, hourly basis.
SPBIO 3X Leveraged Inverse LABD, Hourly
Slowly but surely, LABD is competing the spring set-up and testing action.
If you’re not looking, it’s nearly imperceptible.
However, we’re still at the stage where the test can fail. We’re still at The Danger Point®
A reasonable soft-stop would be today’s low @ LABD 26.21, with a hard stop at yesterday’s low @ LABD 24.60
‘Soft-Stop’ meaning, if it’s hit, probabilities of trade failure have just increased significantly.
Summary
As can be seen on the side-bar, we’re short this sector with LABD-22-05, and TDA-LABD-22-02 (not advice, not a recommendation).
If price action continues to proceed as expected, the next update will show a repeating trendline that’s sure to catch one’s breath.
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.
In what may be just the beginning of similar actions, is this the pivot point?
Part of a lawsuit’s process is ‘discovery’. That’s probably the last thing any ‘institution’ wants.
ZeroHedge picked up the news, linked here; the comment section is telling.
Potential for a significant reversal in SPBIO, has been on the radar for about three-weeks.
What’s price action saying at this juncture?
SPBIO, Daily
For starters, within the first hour of today’s session, we’ve already had an ‘outside-down’ print; last session’s highs and lows have been exceeded by today’s action.
Shifting gears for the next chart, we’re looking at 3X Leveraged Inverse Fund LABD.
LABD, Hourly
The Wyckoff spring set-up is clear. The testing discussed in this update, is per-the-book for Wyckoff action.
‘Tests’ can always fail.
That’s why it’s called ‘The Danger Point’. It’s the location where the risk of being wrong is least (not advice, not a recommendation).
The next chart, also LABD, highlights the record volume on two time-frames, daily and hourly.
This is a potential ‘changing of hands’ from weak to strong for the short-side on SPBIO.
It should be noted, last week’s volume for LABD, was also a record, making it three time-frames.
Summary
As this post was being created, LABD continues to rachet lower into what is now a deep test.
Currently trading at LABD 25.98 (mid-session), we’ll see if the test holds and LABD finishes higher for the day.
Meanwhile, the fundamental backdrop and pressure continues to build.
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.
As if on cue to support the prior post highlighting silver’s ‘mysterious’ decline, we have this just out, on Newmont Mining.
Newmont’s in free-fall.
For long-time visitors to this site, today’s events should be no surprise.
These reports, here and here, posted back in April, identified reversals in gold miners GDXJ, and implicitly GDX, to the day.
We’ll include a quote from the first linked report below:
“It’s a fairly safe assessment, nobody expects a downside reversal … nobody”.
And yet, here we are.
As the administration and the financial press, becomes ever more confused and bipolar; even now, re-defining the long-held definition of ‘recession’, we have Wyckoff analysis time and again, cutting through the media trash to determine the highest probability for the market.
Newmont Mining (NEM) Weekly
The chart below has current conditions for Newmont.
Also shown is the location of the first post linked above, released before Newmont began its decline.
At this juncture, NEM has penetrated long established support; technically it’s in ‘spring position’.
The expectation is for some kind of (weak) rally attempt. We’ll see if it’s able to get back above support.
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.
Media analysts and YouTubers alike, are scratching their collective coneheads.
They’re asking; why is silver down a whopping – 39%, from its print high of February 1st, this year?
If we factor in the high of SLV 48.35 (from April of 2011), silver’s been pummeled – 65%.
With the ‘rampant’ inflation and never-ending money printing, silver (along with gold) should, there’s that word ‘should’, be skyrocketing higher.
It’s an apparent mystery; steeped with smoke-filled back rooms and intrigue.
The ‘Inflation’ Narrative
Let’s help unravel silver’s decline by taking a look at some of the facts.
First up, is ‘inflation’.
The inflation narrative is false. There; glad we got that out of the way. 🙂
How do we know?
We know it’s false because the price action itself, tells us it’s false.
It’s obvious at this point, what we have is supply destruction and not inflation.
The Economic ‘Connection’
Next up, is the economy.
Silver along with copper are industrial metals. They follow the economy … more so with copper. Copper futures are down – 32.5%, from their March 7th, highs.
Coper’s industrial uses are linked here. Nearly half of copper production is for building and construction.
Since the largest real estate bubble in world history has just popped, copper demand is essentially going to collapse.
If at this early stage of Great Depression 2.0, the average person can’t pay the phone bill, where are they going to get any money to drive precious metals demand higher?
Moving on to ‘truth’, we have price action.
Silver SLV, Weekly Close
The chart below has SLV, penetrating one support level (upper blue line) and just now, at the next support.
Since gold (GLD) is in position for an upward test of its wedge breakdown (chart not shown), it’s reasonable to expect another bounce off support for silver.
Using the ‘rule of alternation’, we already had a brief move off the first support level before reversing.
The next contact at lower support, will likely bounce for longer or not at all.
If silver can’t go higher … look out below.
Silver SLV, To Single Digits?
The economic depression is just getting started and industrial metals demand is already collapsing.
Although a data point of one, the following is significant.
Supporting the ‘depression’ assessment is this link; specifically, time stamp 3:20, with a recent graph of housing listings in California … going vertical.
SLV, is in position to test higher; thus, confirming the wedge pattern (grey lines) shown below.
Added to that pattern is a measured move target should SLV, break down to lower levels after an upward test.
There it is: ‘Mystery’ solved.
Silver is heading lower because price action said it would.
Now, the fundamentals are kicking in to add a potential mass acceleration to the decline.
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.
The Danger Point® 