Separating From The Crowd

July 17, 2021 By in Biotech, BIS, David Weis, IBB, LABD, Oswald Chambers, SPBIO, The Speck 1 Comment

Work and think in isolation

Intuition does not ‘collaborate’

If you’re serious about your growth with market analysis and trading, at some point in the journey, you’ll discover this fact:

The most successful and effective market speculators operate alone.

Livermore had his office with the ticker, ‘board boys’, and not much else.

Wyckoff (from his autobiography) refused over and over the overtures of his wealthy clients to establish a more personal relationship.

The late David Weis was the same; managing his own account.

One difference with him; he provided a mentoring service that passed on his valuable insight.

It was a steal of a price (back in 2011) … just $1,500.

Personal Anecdote (being mentored by Weis):

It was April, of 2011:

As Weis interviewed me on the phone, asking all sorts of questions about my background (engineering), my parents (my late father, a Yugoslav national, shot by Germans in an attempted execution during WWII), and my trading objectives, it became clear to me, I would pay whatever price necessary to gain an audience with him.

This all took place before his website was complete and before his book was published. It was sort of a ‘golden time’.

Stretched Growth:

Weis traded the futures markets. If I was to be mentored by him, I would need to get up to speed and trade futures as well.

I knew almost nothing (except they were highly leveraged) about those markets. However, I was determined to learn very quickly.

During the phone interview, which lasted maybe forty minutes to an hour, he did not mention (and I did not ask) the cost of his services.

As the call progressed, I was literally getting sick with anticipation.

Coming to a close, almost absentmindedly, he said: ‘It’ll be $1,500’.

I fully expected him to say, and would have gladly paid $5,000 or more … which was the going rate for a typical trading course.

He then ‘suggested’ that I open a futures account; our mentoring sessions would start the next week.

Fast Track:

After that call, three things happened in quick succession.

First: A check (he was old-school) was mailed off to him in Boston so that it would clear before the next week.

Second: I contacted TradeStation and got their futures paperwork to open an account. That happened quickly and $15,000 (an amount suggested by Weis), was wired to the account.

Third: Buy the time of the first session, I already had the futures account set up and had determined what markets I would be trading: The LIFFE mini-futures (now part of ICE Futures Europe) for gold and silver.

On The Fly:

One last thing about trading futures and learning quickly.

I noticed about two weeks into trading silver, the volume on the contract I was in, started to drop off.

I did not understand why the liquidity was drying up … that is, until I checked my e-mails.

Turns out, I was about to ‘take delivery’, and pay $37,000 for a bar of silver if I did not exit the contract (that day).

The entire time with Weis was a growth experience. Very painful most of the time as knowledge had be acquired on the spot.

During our sessions, I would have the phone to my ear and be feverishly taking ‘screen shots’ of his computer (via gotomeeting,com) as he progressed through the session.

This link is probably as close as one will come to a typical mentoring session.

No Group Consensus:

Going to the link and watching for even a few minutes, it’s obvious this type of analysis is in a class of its own.

Nowhere in the video does he mention P/E ratios, Sales-to-Book or any number of useless metrics.

Deciding to pursue this type of trading, will of itself, separate you from the crowd.

The mainstream financial press will never present this level of detail. The general pubic does not have the intellectual capability or discipline to really get down and craft this skill.

Of course the financial media, YouTuber’s and the like, are all too happy to cater this (mediocre) crowd by showing their supposed prowess on dissecting financial reports and/or pontificating on the latest Fed speech.

Little does the public know, this type analysis (fundamental metrics) is just a ruse; a distraction promulgated over the life of the markets to distract and disable the masses.

The fact that ruse keeps going, is proof in itself of its effectiveness.

Which brings us, once again, to biotech.

SPBIO (LABD): Analysis

In this case, which could be one of a kind in history, the fundamentals are important.

Those in the biotech sector have intentionally (depending on whose data is used) fatally poisoned millions if not billions.

Their natural immune systems have been forever destroyed and their life expectancy drastically shortened.

Even so, this fundamental backdrop must not cloud interpreting the market behavior at hand and the Wyckoff analysis.

We’ll start as Weis does in the video link, with an un-marked chart. Daily close of inverse fund LABD:

Next we’ll show how the right side action is alternating its behavior:

At this juncture, the market is not able to retrace.

Price action from the last intermediate low in late June, has formed a double, then single, and then no bottom.

Adding in the repeating trendline study, LABD is currently near a contact point on the right side trend:

Price action itself points to more downside for SPBIO (LABD higher).

With the overall markets closing poorly on Friday, the implication is for lower action in the coming week.

Consumer All Done:

The post on Friday, showed how the consumer is literally spent.

About an hour later, Steven Van Metre came in with additional details.

Then, couple that with Dan’s (iAllegedly) assessment: “The Party’s Over”; the pressure continues to build.

We might take the example of lumber futures as a model for upcoming price action; essentially, straight down -66.3%, in 48 trading days.

Wistful Conclusion:

David Weis is now gone (passed away last year).

After listening to his voice once again, I have let it personally admonish me to remain focused and diligent.

Even a decade after our mentoring sessions, with focused effort, the search for mastery is never ending.

To borrow a quote from Oswald Chambers: “One must determine to be limited and focus their affinities.”

We’re at a critical time in world history and that’s not overstated.

Our conditions have brought so many cowards to the fore.

In a way, it’s a tremendous public service.

It’s clear to see who is leading and who is cowering in place.

If anyone has a hope of surviving (even prospering) in this environment, for some it will be taking control of their own market decisions; separating themselves from those who want them to remain ignorant.

Stepping out into the raw edge of life, has no guarantee of success.

However, what is guaranteed, is stretching of oneself into a new level of thinking, experience, and wisdom.

That, is its own reward.

Stay Tuned

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.

‘Read My Lips …’

July 16, 2021 By in Biotech, BIS, Bonds, GOLD, IBB, LABD, S&P, S&P 500, SPY, Van Metre, ZeroHedge 1 Comment

3:21 p.m., EST

No More High Prices

This article, just out from ZeroHedge, says ‘consumers’ are in a revolt.

No more high prices.

Buying plans for the major items, housing, auto, appliances has declined dramatically.

One chart, linked here, shows consumer complaints about high prices are the most since the data started … 1961.

The reality is the retail consumer has come to the end of the rope.

To loosely quote Von Mises; ‘If you don’t voluntarily get your spending under control … the market will do it for you.’

To quote another financial source, Steven Van Metre; he has discussed for months, that high prices will be rejected. The economy will contract and bond prices will rise.

Bonds have indeed gone up in anticipation of contraction; or forecasting an outright collapse.

Throw into the mix that we’re going to have some kind of ‘fatality event’ this coming winter; for sure, there won’t be much demand for high priced items … just from the contraction of the population itself.

Which brings us to biotech (SPBIO).

SPBIO (LABD) Analysis:

The unmarked chart of inverse fund LABD is first (just to give perspective):

Next we’ll show that LABD has or is testing support and at the same time, confirming a trendline:

Biotech is the downside leader … sometimes tag-teaming with gold but for the most part it’s biotech.

Positioning:

It’s no secret I have positioned my firm short this sector in a big way since April of this year (not advice, not a recommendation).

That position has been adjusted over the months but has been steadily increased since the intermediate low on June 28th.

Since that low, the position has been increased six times (including yesterday) and may also be done so today.

Summary:

Once again, we’re heading into the weekend. The S&P (SPY) has just printed ‘out-side-down’.

Anyone still want to hold long the market?

Stay Tuned

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.

Economic Collapse … The Model

July 15, 2021 By in Biotech, BIS, Bonds, David Weis, IBB, Jerimiah Babe, LABD, SPBIO, TLT, ZeroHedge

1:44 p.m., EST

South Africa shows us how it’s done

‘Hey J.B., when’s the collapse?’

That’s a comment often seen on any number of Jerimiah Babe’s updates; openly mocking his doom and gloom assessment.

Whether he’s at the local homeless camp in Los Angeles, or in his home next to the golf course, the question remains the same;

‘J.B., When’s the collapse?’

Sometimes his response (if he’s at home) is to turn his head to the window and say “Have you looked outside?”

A good number of American’s have become so pathetically weak, ignorant, and just (to overuse the word) plain stupid, they expect to sit on their newly built patio deck (using last year’s stimmie check) and observe the fall of the U.S. from the comforts of their own back-yard.

Of course, there are some (including this author) who are first generation Americans. Their parents and grandparents emigrated (or escaped) from communist countries.

Those people do not have to ‘wake up’; they were never asleep.

Coming Attractions:

South Africa gives us the model for what’s in store … at least for sections of the U.S.; probably starting first with the blue sates (we’ll see).

You might say, it’s already happening in Portland.

One news item of note shown in this report from South Africa, is neighborhood patrols.

If that’s coming our way, then we’ll need to get outfitted (if not already). Here’s a good place to start.

All of which, brings us to the markets.

Bonds (TLT):

Yesterday’s update showed how the so-called ‘bloodbath‘ was actually a set-up to go long (not advice, not a recommendation).

It didn’t take long for bonds (TLT) to give a Weis method ‘buy signal’. That happened at the open today.

The bull move in bonds does not confirm the ‘re-opening’ hype. That in itself, should be all that’s needed to make decisions.

It is interesting to note; on sites like ZeroHedge, there’s no talk whatsoever that biotech has (already) reversed and is leading the way down.

As of this post, inverse biotech fund LABD, is up about 38%, from its lows of late June. It appears poised for yet another breakout; lower for SPBIO and higher for LABD.

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.

Building The Case For Collapse

July 14, 2021 By in Biotech, BIS, Dow 30, IBB, LABD, Livermore, Positions, S&P, S&P 500, SPBIO

2:46 p.m., EST

Biotech SPBIO, Down

Inverse LABD, Up

Inverse biotech, LABD above, is confirming a pivot.

The magenta arrows show contact points morphing into a pivot that has two more contacts.

The new trendline was copied, then pasted to the far left of the chart.

It’s clear the new (pivot) trend is identical to the one created when LABD bottomed out this past February.

While the overall markets (S&P, Dow, COMPX) are still showing green, biotech looks like it has started the next leg down.

The original short position via LABD, has remained intact (not advice, not a recommendation) and has been increased five times (including today) since the beginning of this month.

In our view, biotech’s signaling the potential for a very dangerous situation.

Biotech’s headed down and we’re already short; not advice, not a recommendation..

As Livermore said a hundred years ago, ‘surprises tend to happen in the direction of trend.’

Stay Tuned

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.

Garbage In … Garbage Out

July 14, 2021 By in Bonds, David Weis, TLT, TMF, Van Metre, ZeroHedge 1 Comment

10:49 a.m., EST

Another day spent digging in the trash

This morning’s perusal through the usual suspects of finance, leaves the feeling you’re sifting through garbage.

Every once in a while, like yesterday’s post, there’s something useful.

Most times, not.

Today is no different.

Here we have an article about the ‘bond bloodbath’ and how inflation is not transitory.

Instead of falling into the trap of contesting the current false narrative, we’ll take a different approach.

How can the constant stream of financial nonsense, lies and miss-direction, be put to use?

Since the article linked above is about bonds, we’ll use that for our example.

The Bond Market (TLT):

First, the David Weis training video (linked here) has been discussed many times over the years.

We can’t make recommendations but we will make a suggestion; that is, whatever the video costs at this point is well worth it.

Our TLT market entry technique (below), is taken from that video (not advice, not a recommendation).

We’ll start with an unmarked chart of TLT. The ‘bloodbath’ referred to in the link above, is yesterday’s down-draft.

Steven Van Metre has already laid the fundamental groundwork (for about a year) on why bonds will rally.

We’re there now but the market’s not going to let anyone get positioned long easily.

The next chart shows how the Weis technique can be used to get aboard the rally.

Yesterday’s so-called bloodbath, is really a trade entry set-up.

Notice how the market does not come back to the ‘entry’ levels. This chart fits the Weis example to perfection.

The bond market’s signaling there’s something very wrong with the ‘reflation’ or ‘re-opening’ trade.

The reflation, re-opening does not exist.

The economy is not coming back.

Summary:

It took over twenty years of searching to stumble across the Weis video. As with a lot of things in life, it was almost by accident.

After watching him dissect the ‘Apache Spring’ (APA) trade, it was obvious the search for ‘truth’ had ended; the education was about to begin.

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.

Psychologically Unprepared

July 13, 2021 By in Biotech, BIS, DIA, Gold & Silver, Great Depression, IBB, LABD, Northman Trader, Sven Henrich, Wyckoff 1 Comment

11:43 a.m., EST

When the break comes … it’s not coming back

Nearly 100-years ago, Wyckoff, stated:

‘If you can’t completely ignore the news and the financial press, you will never be successful in the markets’ (emphasis added).

In line with that, we have this: The very first sentence from this article out of barchart is questionable to say the least.

First:

There is no rapid ‘re-opening’. There never was. There is no ‘pent up’ demand.

Massive credit card usage shows the U.S. consumer has been decimated; using credit just to survive.

It should be (but somehow for some, it’s not) obvious we’re in a controlled demolition of the economy (including the food supply) on a world-wide scale.

Second:

Price increases are the result of supply chain (also, controlled demolition) shutdown not inflation.

Uneducated Economist has probably done the best job of ‘boots on the ground’ work to completely dispel the inflation false narrative.

He called the current and now waning lumber price spike two years ago. That’s how you know who to trust or believe. Take a look at their past analysis and see how it ‘aged’.

Third:

The U.S. population collectively, has never experienced real hardship. Those who made it through the Great Depression have all but died off.

There is no one around to give said population a swift kick in the pants and tell them to ‘suck it up’.

Northman Trader

Sven Henrich has come out with an excellent market update, linked here.

Towards the end of his analysis he states; ‘when the break comes, it will be quick, deep, keep going and most (if not nearly all) will be psychologically unprepared.’

Which brings us to biotech.

LABD Analysis:

Biotech SPBIO, is back as downside leader: Down just over -25%, from its highs in February, this year.

The daily chart of (inverse fund) LABD is below. The market itself is showing us it wants to follow the repeating pattern of trendlines (not advice, not a recommendation).

If the entire structure (from the February low) is actually a trading channel, it’s hard not to overuse the word ‘massive’.

Non Confirmation:

As of this post, the Dow, the S&P and the Composite are unchanged to slightly higher. Yet biotech SPBIO, is down -1.2%.

We won’t know until it’s all over … but it looks like biotech could somehow be the catalyst (along with the dollar and gold?) that precipitates the final reversal in the overall market.

Stay Tuned

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.

SOXX: Testing The Top

July 12, 2021 By in SOXS, SOXX, ZeroHedge

12:03 p.m., EST

Underside Test of Resistance

The last update on SOXX, noted one thing missing was a new daily low confirming the reversal. About 15-minutes after that post, SOXX printed a new daily low.

Now, we’re in an underside test of the breakdown.

The daily close chart (above) shows price action coming back to the underside. This is how the market squeezes out risk of a short position (not advice, not a recommendation).

Yesterday’s update had a link to ZeroHedge about how the market ‘has to’ move higher this week; the ‘selling’ is finished.

A healthy way to view this type of information is to be aware of the source.

If it’s a major retail brokerage or trading firm, their own (internal) market stance is likely to be completely opposite their financial press release.

Let’s see what happens next.

We’re not looking to short the SOXX but it’s still an educational exercise to monitor the sector.

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.

Random Notes

July 11, 2021 By in ice-age-farmer, Northern Brewer, Random Notes, Van Metre, ZeroHedge 1 Comment

The usual suspects for the week

No. 1

The market does not ‘have’ to do anything.

Here’s a link to a Zerohedge report letting us know why the market ‘has to cover shorts‘ and move higher this coming week.

The reason retail money managers, pundits and the financial press don’t focus on price action and volume (a life-long pursuit of mastery), is because it’s hard.

As the late David Weis said:

‘There’s a lot to this game of reading the chart.’

Just as Steven Van Metre has drilled down into perfecting his style of bond ‘macro’ management, so too has this site drilled down into the nuance of volume and price action.

That in turn, is coupled with the externals (the ‘macro’, if you will) of sentiment and fundamentals.

It’s more art and intuition than science.

That’s a good thing.

The pointy headed ‘quants’, can’t quantify intuition.

The market (which is thinning out as we speak) may indeed rise this coming week. However, if it does, it won’t be because it ‘has’ to.

No. 2

The ‘knock at the door’

Awaken With JP has a humorous but educational approach on how to help those who want to ‘help’ us.

No. 3

Get the ethanol out

Here’s a brief video on how to get the ethanol out of gasoline.

Once that’s out, you’ll need octane boost. This seems to be highly rated stuff.

No. 4

Grow and store your own. Food, that is.

In this report from iceagefarmer, the picture at time stamp 10:27, should dispel all illusion. ‘Shaking hands with Klaus’.

At time stamp 16:02, notice how many farmers have been notified.

Once awake, anomalies like these ‘numbers’ are spotted instantly. It serves to remind us, who is ‘of this world’.

‘My kingdom is not of this world‘

No. 5

Brew your own. Beer, that is.

At this point in time and with global shutdowns on the horizon again, maybe we just brew our own.

I have purchased the exact kit shown in the link.

Report on the results to follow.

Stay Tuned

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.

Deflation = Credit Destruction

July 10, 2021 By in Credit Destruction, Deflation, Economic Ninja, Gold & Silver, SLV, Uneducated Economist, WFC

Silver Collapse Ahead?

If and when food shipments halt nationwide and there’s nothing at the grocery store, is everyone going to run to gold and silver?

Will that be the savior?

It certainly wasn’t during the ‘Texas Freeze’. Not even on the list of must-haves.

The next planned event(s) are in plain sight for those who can see.

Mega drought in the corn belt (whether real or not), power substation blows up in Houston (that one was real) and planned destruction (or total control) of semi-trailer shipping (also real).

It’s the food supply and infrastructure first; then gold and silver (not advice, not a recommendation).

The Wells Fargo incident; inflation has likely run its course.

The dollar (and bonds) are in strong upside reversals; gold and sliver are (still) inversely correlated to those markets.

Inflation is credit expansion. Deflation is credit destruction. That’s where we are now.

Analysis: Silver

It’s the job of the mainstream financial media to make sure as many as possible are on the wrong side of the trade.

They have done well with the ‘inflation’ narrative.

Uneducated Economist puts it well; price increases are the result of supply constriction not inflation.

Which brings us to silver.

The weekly close of silver proxy SLV, has the ‘short squeeze’ already complete.

Shortages of product, continued inflation pummeling by the press, have not moved the metal higher; that’s the ‘tell’, something’s wrong.

Wells Fargo has kicked off the next round; deflation or deflation impulse.

One has to be prepared; silver may (even if only for a few days or weeks) head down to below where it started the squeeze.

Even to single digits … $9/oz., anyone?

If that happens, it means that gold and silver are being dumped onto the market while everyone’s scrambling for food, water and protection.

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.

‘Ripple Effect’

July 9, 2021 By in Banking, Biotech, BIS, Economic Ninja, IBB, LABD, Nissam Taleb, SPBIO, WFC

12:23 p.m., EST

Wells Fargo: Just the start?

The short answer is probably yes; but that’s only one problem.

Everyone’s subject to ‘normalcy bias‘ as Nissam Taleb puts it; Today’s like yesterday and tomorrow will be like today.

The news on Wells Fargo shows how quickly that can change.

Here’s a YouTube link; one man’s assessment on what happens now.

He proposes a ‘ripple effect’.

Events have been set in motion; not necessarily immediately but it has started nonetheless.

Market Positioning:

So, here we are going into the weekend.

Does anyone want to be long the market at this point (not advice, not a recommendation)?

There must be some that do as we’re still at elevated levels.

The trade approach implemented on this site (i.e., positioning short), takes into account and actually plans for a ‘disconnect’.

Only the inexperienced or naïve think (at this time in market history) they can get out as easily as they got in; i.e. day and swing trading.

Analysis: SPBIO (LABD):

We’ll start close in first and look at the hourly LABD:

Price action has come back to test the boundary (blue line).

As frustrating as it might seem (and it is), this is normal market behavior. The market itself has to define who is in control; bulls or bears.

It’s never ending.

That’s why a case has been built on the fundamental side; why biotech is subject to a massive implosion.

That backdrop, is being supported (little by little) with price action and thus, helps keep the mind focused.

If we pull out to the daily, we see the familiar trend-line(s):

We’re at another danger point. Price action can go either way.

If LABD pivots higher from here, it’s one more confirmation that we’re trending higher (SPBIO, lower) into our October-exit timeframe (not advice, not a recommendation).

Stay Tuned

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.