8:49 a.m., EST
GLD, retraced 50%, now at edge of range.
Reversal is possible
Note: Both charts are inverted, turned upside down.
Above: GLD is currently at 50%, a common retrace level.
Next: We have GLD, in a possible trading channel.
With the Fed meeting minutes due out at 2:00 p.m., EST, that release could be used as the excuse for GLD, to complete its corrective action.
If GLD pivots lower, the dollar (UUP), could also make its move and reverse higher.
Stay Tuned
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10:47 p.m., EST
First, the daily chart with the familiar trendlines
The magenta arrow shows, down-thrust has diverged. Today closed lower but thrust energy was (nearly) nonexistent.
The right side trend is still unknown.
More contact points are needed. However, inverse fund LABD has shown consistent trend angles (above) at various points throughout its sideways, corrective move.
Taking the SPBIO hourly chart and inverting, gives a more accurate picture; we see the Wyckoff set-up:
This type of price action is high probability. Not perfect, but still potentially 75% – 80%, effective or higher.
The fact that inverse tracking fund LABD accelerated upward into the close adds weight, we’re potentially at the end of the correction.
The fundamental backdrop continues to implode.
The plan for world control (through speck injected depopulation) is out in the open now. No doubt.
Amandha Vollmer has this update on the decades long, mass hypnosis.
Stay Tuned
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3:34 p.m., EST
SPBIO may have completed its correction.
Above is the hourly SPBIO chart; inverted and annotated.
Under the conditions shown above, when price action penetrates support and then reverses, it’s called a Wyckoff ‘spring’.
From this point, the expectation is for a moderate rise, then test and then a dynamic rise to the top of the trading range.
5:29 p.m., EST. Updates in red
1:32 p.m., EST
It looks bad on the Weekly;
Even worse, on the Quarterly
Early this year, TSLA spent about seven weeks attempting to move significantly higher.
During the week of February 26th, it gave up and broke down.
Since then, its come up to test the underside of support … now resistance (around 740) before again, turning lower.
Down -37%, since the end of January sounds bad enough. However, it’s the quarterly chart that contains the real horror story.
TSLA has posted a huge 490-point trading range (when taken from support at 78, to current price).
A down move to support from today’s levels, is a decline of -86%.
Markets like to come back and test; better to count on it, than ignore it.
Not saying that will happen to TSLA.
Nearly simultaneous with this first post, we have this article on ZeroHedge about a huge short position.
However, if any real problem does come up like another high profile ‘incident’ (as if we don’t have enough of them already), meaningful support is a long way down.
Just a few hours later, we have this, also from ZeroHedge about a Tesla running over two police officers … in China no less.
The ‘usual suspects’ wrap-up for the week.
Items not in any particular order:
No. 1
Senior gold miners GDX, has retraced to 50% (37.84), and stalled.
Downward reversal from here, puts Fibonacci targets of 23, then 14-ish, in sight.
No. 2
California’s coming up on fire season. Here’s a short clip, just to remind everyone what it’s all about.
No. 3
Man on the street (in this case, a woman), calls out fake-news reporter. Download the file if the viewer won’t play.
No. 4
Complicit rats are starting to squirm.
Remember what happened to French ‘sympathizers‘ once the winning side was defeated?
The time to be on the side of truth, has long since passed. Note the date, May 17, 2020 … one year ago.
No. 5
A pickup truck in the Ft. Worth area of Texas, was spotted a while ago. The license plate read:
NO PPE
Gotta love them Bubbas.
No. 6
Following the rules will give you a magnetic personality.
Warning … language.
No. 7
Ventilator ‘graveyard‘. You be the judge.
Warning … language.
Stay Tuned
Was last week the correction?
Is it over?
To provide perspective on that question, we need to go back in time.
First, to Dr. Elder’s “Entries & Exits“, published in 2006.
Then, way back to “Reminiscences“, published in 1923.
As a reminder, we’re looking at biotech (SPBIO) from the perspective of being short the market.
The primary vehicle for that short, is highly leveraged inverse fund, LABD.
The last update gave a hint at the desired timeframe.
If the markets are in the process of reversing, ultimately going to the long awaited (since 2009), final draw-down (i.e. crash), then a likely bottom would occur where they (almost) always occur; during the third week of October.
In a nutshell, that’s the time frame.
Conversely, price action is the final arbiter. If biotech winds up effectively saying ‘not now’, well then, it has the final say.
Back to ‘Entries & Exits’.
One of the traders highlighted in the book (in addition to Weis), was William Doane; former Head Technician for Fidelity.
His timeframe is much longer than the typical market participant. He, like Weis are looking at monthly, quarterly and yearly charts.
That fact in and of itself, provides an edge.
One of the main take-aways from his section was (paraphrasing):
‘The first correction is the hardest. If you can get through that, it’s typically smooth sailing from then on’.
The biotech short via LABD (not advice, not a recommendation) may be at that point now. Painful to watch but necessary.
Next, we go to ‘Reminiscences’.
Those who have read the book, know all about ‘Turkey’; Mr. Partridge.
As the book states, he was much older than the rest who frequented the brokerage. Also, he did not appear to be that active in the markets (thus minimizing his transactions). He was interested in the big move.
The admonition from Partridge, was: ‘Don’t lose your position’. Don’t exit out, expecting a pull-back … that ultimately never comes.
So, we have two examples; three if you include Weis that begin from the very long time-frames and work inward.
Now, on to the market:
The long term, Quarterly analysis has already been done; linked here.
The chart in the link, is from last quarter and since then, (during this quarter), we’ve made new lows.
On the fundamental side, evidence is building by the day on what the ‘speck’ protection is all about.
If you’re really interested in the big picture, here’s a link to a five-plus hour presentation that spells it all out.
Here’s J. P. Sears’ take on the same thing.
SPBIO, the daily chart:
The SPBIO, has been inverted and annotated
We’re currently between support and resistance.
Momentum indicators MACD, on the Monthly and Weekly remain in a downtrend.
Using IBB, as the proxy for Quarterly momentum (not enough data for SPBIO), the indicator is flat.
Momentum’s in favor of (maintaining) a short position; not advice, not a recommendation.
The monthly chart of SPBIO (inverted), has price action coming back to former resistance (now support). This is normal market behavior.
Recall, that on the downside, if there is some kind of ‘event’, markets can slice through apparent support levels with ease.
With that in mind, on the inverted chart above, the next major ‘resistance’ level may or may not be of consequence.
Summary:
Each trading week is important.
However, next week will likely a pivotal one; providing more information on whether to maintain short or exit and stand aside; not advice, not a recommendation.
Stay Tuned
3:37 p.m., EST
Another adverse move in SPBIO and LABD.
Still a short?
We’ve pulled out to the weekly time-frame on inverse fund LABD.
The chart’s been annotated with the same repeating trend line concept but with adjustments.
It may seem like an obvious statement but to form a trendline, price action needs to contact that trendline.
The internal lines (slightly lighter shade) show the repeating contact of price action … both on the left side of the lines and the right.
The left-most trend has three contacts. One on the left side before the down arrow and the others on the right.
The right-most trend starts at the low (Week 13) and has a potential push out of trend that returns … which may be in the process of confirmation this week.
This trade is currently being managed (not advice, not a recommendation) with an eye on a potential exit in the fall; possibly October – November time-frame.
11:51 a.m., EST
The bulls upside attempt in biotech has failed
The last update said if biotech SPBIO, made a new daily high, the bulls would be gaining a foothold.
That new high and the foothold, have come and gone.
Admittedly, the retrace in SPBIO and inverse LABD went farther than anticipated.
However, as of this morning’s action, the attempt to move higher in biotech has either failed outright, or has been severely damaged.
If it’s failure, then we’re set up for a major downside move.
The daily chart of inverse LABD, has the now familiar trend-lines that are a repeating pattern.
The last two days may have formed yet another right side trend; rising at the same angle as the others on the chart.
There’s a remote chance, as price action nears SPBIO support (LABD near 30), the bulls could once again attempt to reverse course.
With the overall market oscillating to the downside (today’s counter move notwithstanding) and with biotech in the downside lead, an upside move seems unlikely.
The Project Stimulus position remains unchanged.
Stay Tuned
9:09 a.m., EST
If there’s going to be a big move, the market will make sure you’re not along for the ride.
The proverbial ‘gut check’, as David Weis used to call it.
It’s an adverse move that’s intended to shake any (all, if possible) weak hands out of their positions.
How will we know if that’s what’s going on with biotech’s, SPBIO?
Yesterday, was an upside reversal bar on the daily SPBIO, chart. Will the market go higher (LABD, lower) from here?
The first clue will be the open.
If SPBIO opens lower, with inverse LABD opening higher, we’re on the right track for more biotech downside.
If LABD makes a new daily high … above yesterday’s LABD, 30.42, high, we have confirmation of a shake-out.
Right now, we’re still in the pre-market.
However, LABD is already trading up between +3.5% – +4.7%, which weighs probability to more upside … downside for SPBIO.
If SPBIO somehow makes a new daily high (LABD, new low), the bulls are gaining a foothold.
At this point, the Project Stimulus account remains unchanged (not advice, not a recommendation):
Stay Tuned
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9:51 a.m., EST
Everyone loves to hate the dollar.
That sentiment extreme is a set-up … for the bulls.
If the UUP dollar index ETF, manages to push below the 24.00 – level, it presents the opportunity for a significant bullish divergence.
As Van Metre has stated many times over the past few months, the market’s not expecting, and not in position for a dollar rally.
How can it be … with the rabid gold bulls thrashing about with each upward blip in GLD, GDX and GDXJ.
From this site’s perspective, we’re staying away from that (gold) market and have focused on biotech … where things are really getting underway; but now, back to the dollar.
The weekly chart of UUP, shows the potential set-up.
If somehow we get a (narrow range) push below the 24-level, it would set up a clear bullish divergence on the MACD.
At this point, anything can happen.
Saying that gold will crash if the dollar launches upward is certainly possible. However, in today’s world, the opposite could happen as well.
Just one more reason to say away and focus on shorting an index that’s decisively moving lower: Biotech (not advice, not a recommendation).
Side Note:
The whole ‘divorce’ thing, you know what I’m talking about, could be a signal in disguise.
The ‘higher ups’ may have decided our cardigan wearing benefactor has reached the end of usefulness.
If so, how many biotech rats are now going to jump ship (before the paddy wagon arrives) knowing the jig is up?
Could that be why SPBIO, posted new lows in five time-frames; Daily, Weekly, Monthly, Quarterly and Yearly, last week?
Stay Tuned
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The Danger Point® 