The good news for the bears and the shorts; this morning’s action was probably the final push higher for biotech SPBIO.
The bad news; if that’s the case (a reversal) and the right-side trend-line has been verified, it could be the very beginning stages of a massive collapse.
It’s about midway through the day’s session. The leveraged inverse fund LABD, is printing a repeating characteristic that identifies a reversal.
Biotech SPBIO 3X Leveraged Inverse LABD, Hourly
This is how it looks around 12:50 p.m., EST with no mark-up.
Next, we’re going to zoom in on two areas of interest. A previous reversal and the apparent reversal in progress.
The price action is near identical.
First a false reversal that’s followed by the real one. That’s where we are now with today’s action.
Summary
A follow-up post using the weekly time frame is due out before the session open tomorrow.
All short positions remain active (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.
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 the weeks and months that followed, dollar updates proposed that because we’re looking at the longer weekly timeframe, ‘any rally is likely to go farther and last longer than anyone expects.’
So now, here we are.
ZeroHedge just acknowledged the obvious, with this report.
At the time of the original dollar analysis, it was (still is) popular to talk about the ‘imminent dollar collapse’.
That (dollar) post was released in the face of overwhelming opposition to any upside.
All of which, brings us to gold and silver.
Gold’s ‘Changing of Hands’
With the passing days and weeks, it looks like the insight of gold (GLD) changing hands (here and here) is proving correct.
It’s not a popular view and it’s sure not getting any ‘clicks’.
However, as we’ll see below, there’s potential for gold and silver to head to much lower levels if not just temporarily.
Gold (GLD), Weekly Bar
The wedge breakdown with measured move.
It’s clear, the 130 area, is an obvious support level.
The sticky part, previously discussed here, what if somehow, gold heads lower after the measured move?
We may have something that looks like this:
If that happens, think of the confusion that would result.
From an ‘oligarch’ standpoint, it makes perfect sense.
We’ll not elaborate on that in an open (unsecured) forum.
However, let’s just say, we should keep in mind, it’s the corn and grain first, then gold and silver (not advice, not a recommendation).
Silver (SLV) projections are similar; potential targets at SLV 13 -14, then, if lower to single digits, around SLV 9.0 – 9.5
Summary
First it was, ‘The dollar’s going to collapse’, it’s ‘Imminent‘ (years ago).
Then, when that did not work out, it was the ‘Silver short-squeeze’ and we’re going to ‘Put it to the man!
Then, when that did not work out, it was ‘Gold’s going to $3,000/oz. in months, not years!’
Then, when that did not work out, it’s now ‘The Fed’s going to seize all your money.’
Ah ha! … We may have some truth but not in the way that’s obvious.
If the typical middle-class individual is maxed-out with debt, having overpaid for depreciating ‘assets’ such as cars and housing, there really isn’t much left in the banking accounts, right?
Retirement accounts … now, that’s different.
Covered many times (scroll to No. 3) on this site is just how easy it is (will be) to confiscate the IRA.
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.
Summarizing trading actions for the week and the action plan, going forward.
Open Positions:
Currently there are two open positions: details below.
TDA-YANG-22-01
Short the Chinese FXI via YANG (not advice, not a recommendation)
Enter YANG @ 10.95, with current stop @ 10.89
Friday’s close @ 14.05, Open profit = 28.3%
FXI, 3X Leveraged Inverse, YANG, Daily
Shown above, YANG appears to be in a trading channel (grey lines).
As a result of moving decisively higher (FXI, lower), the stop on the position is to be moved to YANG 12.79 (not advice, not a recommendation) at the next trading session.
LABD-22-05
Short the biotech SPBIO via LABD (not advice, not a recommendation)
Multi-entry LABD @ 28.11 (combined), with current stop @ 26.57
Friday’s close @ 26.98, Open loss = – 4.02%
SPBIO, 3X Leveraged Inverse, LABD, Daily
Last week contained both record daily volume (since inception) for LABD, as well as record weekly volume.
Downward thrust energy has dissipated. The down-move appears to be exhausted.
Supporting the assessment LABD is at or near a pivot point (reverse higher), we’re going to review the 3-Day chart.
SPBIO, 3X Leveraged Inverse LABD, 3-Day
Note, there is one more trading session (this Monday) needed to complete the current ‘3-Day’ bar.
First, we can see downward thrust dissipating as on the daily chart.
The prior three-day bar is identified as ‘Ease of Movement’.
It’s the first bar in the entire down-sequence starting on 6/14, where upside action was able to penetrate the prior (3-Day) bar’s high.
That’s an indication of demand.
After upside penetration, price continued lower.
However, here’s the important part, LABD, closed higher and posted a higher low when compared to the prior 3-Day bar; subtle clues a reversal may be in the works.
There’s one more trading session needed to complete the current 3-Day bar and anything can happen.
However, based on the analysis thus far, it’s reasonable to expect LABD, to continue to post higher; that we’ve reached the extreme of downside action.
The 3-Day below shows the higher lows and includes a zoom of the area.
Adding to the reversal case, on a weekly close basis, SPBIO reached underside resistance during the week of 7/8. This week just past, it closed slightly lower (chart not shown).
Summary
It’s the weekend and so we have the usual suspects of bad news … any of which could be the butterfly in the amazon, the final upset for the markets.
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 so, during the next leg down, we may be about to get the revelation.
The previous post was valid but a little early … by one day.
As we’ll see below, If the current action holds, it’s a potential major pivot to the downside.
Biotech SPBIO, Daily Chart
The un-marked chart does not look like much at this point. However, the mark-ups below reveal the potential.
We’ll start first with an obvious trend-line.
Next, is a similar trend to the left of the original and then, a potential trend at the right edge.
Where it gets interesting, is when the chart is compressed to show the symmetry of the trading channel.
It’s hard to dispute that it does not exist … there it is.
Positioning
Currently short this sector via LABD (not advice, not a recommendation), with LABD entries at 27.58, and 29.29 for a combined entry of 28.11.
Trade identified as LABD-22-05, with current stop at the session low LABD 26.57.
Summary
SPBIO, is edging lower with near term support areas on the hourly chart (not shown).
We’re still at the danger point; price action can reverse its nascent down move.
However, this time the fundamentals could provide the backdrop; a potential black swan (of ‘side effects’) and especially if the overall markets (S&P, Dow, NASDAQ) have also reversed.
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 the CPI just released, the article at this link says, ‘the Fed’s work isn’t over.’
They’re so right; but it’s not the work they (at MarketWatch) think it is.
We should all know by now, the truth is right in our faces, but we have to be able to ‘see’.
What was seen yesterday, was that biotech appeared to be reaching an extreme.
As a result of the price action, a change was made in positioning out of (Basic Materials short) SMN and into a biotech short via LABD (not advice, not a recommendation).
Part of the reason to focus on LABD was the record volume as shown on the chart below.
Biotech 3X, Leveraged Inverse LABD, Daily
Note how the Force Index shows downward thrust energy is dissipating … even with the record down volume.
Next, we have the terminating wedge formation; indicating a potential reversal is at hand.
A wedge formation is a typical signal for an up-coming (potential) reversal.
It occurs at the tail-end of a sustained move; meaning a wedge is the last pattern to be formed. Sometimes there’s a throw-over (or under) and sometimes not.
Either way, it’s the end of the directional move.
After The Open
We’re just after the open; this is how it looks for LABD.
The first order of business is usually an attempt to close the gap.
As with the prior set-up in YANG, linked here, the objective is to allow LABD, close the gap as much as possible before adding to the existing position, LABD-22-05 (not advice, not a recommendation).
That may happen or not. This market’s already at a pivot extreme.
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.
At this link she explains to the kindergarteners (who even at this late stage, STILL believe the lie), the truth about ‘The Speck’.
Go to time stamp 6:37 and watch; you can clearly see her exasperation as she has to go through it one more time.
We also have this going on behind the scenes as well.
On the other side is the continuous stream of fear propaganda. Just go to your local TAAS (sorry, FOX) news outlet to hear the latest lie du jour.
With that in mind, let’s go straight to the index for the day, biotech SPBIO.
The last analysis proved to be flat wrong.
There was a breakdown as anticipated but that move did not follow through. It was the precursor to an up-leg which is where we are now.
Biotech SPBIO, Weekly Close
It’s obvious.
Last week was a test of the resistance (blue line).
Thís week started with biotech sharply lower (early today) but then coming back to test … where we are now.
That test is starting to reverse late in the session (around 3:00 p.m. EST).
Let’s go straight to the inverse fund LABD
SPBIO 3X Leveraged Inverse LABD, Daily
A very tight wedge has formed.
Price action attempted to break out but has come back for a test. This is where risk is least (not advice, not a recommendation).
Positioning
The Basic Materials short (SMN-22-01), while profitable, was not going as planned. That position was exited at SMN 14.29 … you can see it as the low of this session on your trading platform.
SMN 14.29, is me 🙂
That capital has now been used to position short biotech, SPBIO at LABD 27.58. trade LABD-22-05 (not advice, not a recommendation).
The current stop is the low of the day @ 26.98.
Summary
Even as this post is being generated LABD is pulling away from the lows. With about one hour left in the session, it’s at 28.18.
The LABD entry was an initial position; there’s plenty of capital left to increase the line if trade conditions warrant.
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 last report on China, FXI, stated we’re in a Wyckoff set-up that was about to be tested.
More specifically, it said the leveraged inverse fund YANG, was in ‘spring’ position; ‘spring’ is opposite of up-thrust, because we’re looking at shorting the FXI, via inverse fund YANG.
Back then, two charts were provided with the most probable outcome of the set-up. One showed a ‘pass’ of the test and one showed ‘fail’.
Well, it’s obvious now; pass it is.
The original hourly chart is repeated below with the current chart (ninety minutes into the session) following.
Leveraged FXI Inverse YANG, Hourly
Prior to the ‘test’.
And now … ninety minutes into the session:
Back in the day, over a century ago, Wyckoff wrote that ‘somebody always knows something’ and that ‘something’ shows up on the tape.
What we in the Proletariat didn’t know last week, was this week, would bring us this report from ZeroHedge.
The important part is that Wyckoff analysis allowed one to see what was happening (on the tape) and position ahead of time (not advice, not a recommendation).
“Risk on a position short FXI via YANG (not advice, not a recommendation) can be reduced by allowing YANG price action to retrace as much of the opening gap as possible.”
That’s exactly what was done with an entry made near the lows of the day.
For the haters (if any), here’s a reproduction of the entry exactly as it appears in the trade account:
Check for yourself if you like, that YANG was at 10.95, right around 10:51, a.m. EST.
The low of the day occurred several minutes later at YANG 10.90. The stop is set just below that low @ 10.89 (not advice, not a recommendation).
The trade’s identified as TDA-YANG-22-01. The ‘TDA’ references that a separate account (TDA Ameritrade) is being used for this position.
Hopefully, that’s enough ‘transparency’ and we can move on.
The Wyckoff Edge
Properly done (without being skewed by personal bias), there’s nothing else needed other than Wyckoff analysis.
It’s important of course, to understand the context of our (global) environment such as ‘everything’s going according to plan’ but allowing the mainstream to influence the analysis, other than providing a contrarian view, is an absolute waste of 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.
From a strategy standpoint, we’re now ready for the next round of financial destruction.
If we use this article from ZeroHedge, as the pivot point, consumer credit has maxed out.
The consumer (i.e., middle class) is now on the downward slope, just as the layoffs are about to begin in earnest.
Following the typical corporate model, expect job losses (time stamp 15:18) to start slow, then accelerate into December of this year.
The latest employment numbers provide the perfect backdrop to raise interest rates into a declining economy; all going as planned.
Market Response
As is typical, everyone’s focused on the major indices; The S&P 500, Dow, NASDAQ, SOXX, and on.
However, there’s one sector covered in the past, that’s mostly ignored: Basic Materials, with ticker DJUSBM.
That sector has held up until recently; probably because the thinking was, we’re going to have infrastructure projects to keep the economy going.
Looks like someone got the memo; Basic Materials has broken down.
As of this past Friday, it’s at a critical point.
The prior post from last November, does an excellent job of highlighting the divergences (which have only become worse) as well as downside potential.
Basic Materials DJUSBM, Weekly
On the chart, we’ve got a breakaway gap that looks like it won’t be filled.
After that break, price action has formed a congestion area over the past three weeks.
However, it’s the congestion area giving us clues; the sector’s set up for an imminent break to the downside.
If that congestion holds true, it’s a stunning revelation of what may be about to happen.
We’ll go to the daily chart and start with a Fibonacci time correlation between pivot points.
Basic Materials DJUSBM, Daily
Well, it might not look like much.
However, let’s go one step further with another time correlation, shown below.
If you’re reading ahead, then you already know a trading channel has been defined.
The next chart shows the result.
For this channel to confirm Fibonacci ‘Day 21’, Friday’s action had to post lower … and it did.
That lower action also confirms, the channel’s a Fibonacci 13-Days wide.
Even more disconcerting (depending on one’s viewpoint), the channel lines are declining at approximately – 96.5%, on an annualized basis.
It’s not straight down but it’s close.
The next chart has a zoom of the congestion area.
Note how the grey dashed ‘center line’ is perfect in its contact points … further confirmation of the channel.
Leveraged 2X Inverse SMN, Daily
Although volume is still light, it has improved dramatically.
On a weekly basis, last week was the second largest trading volume at least going back to the ’07 – ’08, meltdown.
The inverse fund is shown below with the trading channel.
Liquidity is still marginal but has picked up over the last three weeks.
The Week Ahead
Obviously, the expectation for the next open is to post lower for basic materials.
Even with all the analysis, it’s the market itself that’s the final arbiter.
Positioning
As the hyperlink tabs in this post (top-left) show, I’ve positioned one account short the sector via SMN (SMN-22-01), with a stop just below Friday’s SMN, low at around SMN 14.05 (not advice, not a recommendation).
It’s a very tight stop.
The analysis is either in-effect, or it’s not. By this Monday, we’ll find out.
A Decline of Biblical Proportion.
On a strategic basis, we can see how expertly the middle class has been maneuvered into a corner.
For the past two years and probably much longer, that sector has been positioned to not have any recourse when the real decline hits.
We may be there now.
At the same time, if you’re up on Biblical references, you already know that when destruction came, there was always a ‘remnant‘.
The remnant was left to either escape or re-build and was typically 10% of the population.
If you’re reading this, you have already decided at some level, to be part of that remnant.
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
Active: Short DJUSBM via SMN, as SMN-22-01, stop @ SMN 14.05
The last update’s high probability set-up was negated at the next session … only to morph into another high probability.
We’ll go straight to the FXI, leveraged inverse fund YANG.
FXI, Leveraged Inverse YANG, Hourly
It’s about twenty minutes after the open and YANG is trading at around, 11.15 – 11.16.
The chart below shows a Wyckoff spring set-up in progress.
What’s missing at this point, what’s to be expected during this session or next, is the test.
That same hourly chart is marked up below to show how that test may look with a pass or fail.
Risk on a position short FXI via YANG (not advice, not a recommendation) can be reduced by allowing YANG price action to retrace as much of the opening gap as possible.
It’s Friday and we’re heading into the weekend.
Does anyone really want to be positioned long? 🙂
It’s not as if anything bad is happening.
Nothing like British Members of Parliament (and the Prime Minister) turning in their resignations … all staged but that’s a whole other story.
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® 