While all eyes are focused on the “V” recovery, the bond market is in a stealth reversal; interest rates moving higher.
Everyone’s expecting negative rates. What if that does not happen?
Today (Tuesday, May 12th) could be the day where the long bond (TLT) makes a new daily low; confirmation we may be in a dangerous reversal to higher rates.
For those who can remember the fall of 1987, the market was extended; bonds had already pivoted to the downside.
Part of success in the markets is the ability to catch the nuances of price action or sentiment.
Once such nuance is the decision of Sven Henrich to take (up to now, no cost) market updates, and move them behind his website firewall.
Just a casual viewing of this latest YouTube post, should be enough to determine that his level of skill and market acumen is at the highest level.
So, the market (S&P 500) made a potential historic reversal last week and Mr. Henrich goes behind the firewall.
One can take that nuance and project it out (based on unprecedented market extremes), that we’re in the very beginning stages of a world-wide, historic market crash and ensuing economic depression.
What are the odds?
What are the odds that IWM, the Russell 2000 tracking ETF is going to make it above the resistance level shown?
This resistance area is an exact Fibonacci 38% retrace off the lows.
Other markets such as S&P are doing better in their retrace. Small caps seem to be the worst off.
Using Wyckoff theory, in a bear market we are to focus on the weakest sectors (for shorting).
IWM and its tracking inverse TZA are at the danger point. Upward risk for a short position is low; while downside opportunity as previously stated (in the “Whacked!” update) is near the 2009 lows.
With fossil fuel coal plants being shut down and solar still a minimal amount of the power grid, natural gas is it.
The chart below has nat-gas poised for a sharp winter rally … possibly to much higher levels than last year.
An expandable version of this chart can be found here.
It’s been over two years since Carl Ichan gave his Blackrock “Party Bus” speech right in front of the Blackrock CEO himself: Larry Fink.
Our short video of BLK shows just one dramatized (but then again, maybe closer to the truth) outcome if we have indeed seen the highs.
For a more serious look at the technical picture, go to this link for analysis.
Sharpening one’s pencil to the nub, attempting to calculate corporate earnings down to the gnat’s gonads, is a futile task.
The consensus miss on the recent earnings release from Chicago Bridge and Iron (CBI) is just one case in point.
A much better approach, one that’s been proved since the early 1900’s is the method used at this link.
Clicking on the S&P Sector Archive shows two recent charts of the S&P 500. Price action of the market itself identifies the next likely direction.
A century ago, the father of technical analysis (Wyckoff) stated it himself:
‘The most important thing in Wall Street is to know what will happen next.’
So now the S&P has reversed. That fact presents the next question … what will happen next?
The answers do not lay in earnings reports, interest rate pronouncements or unemployment numbers.
The answer to market direction is in the market itself.
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For technical analysis on individual stocks, markets or indices, please visit our parent site at www.ten-trading.com
That’s the direction of the Dow Jones 30, the S&P 500 and the Russell 2000.
Intermediate and advanced trading professionals understand what this means.
When a market has experienced a long, sustained advance that may cover months and years … near the end of that advance and just prior to the ultimate top, the market thins out.
That’s the process whereby fewer and fewer stocks are participating in the advance. Essentially, the bear market has already started as more and more stocks fall away from the uptrend.
In fact, ZeroHedge just reported the S&P 500 in its narrowest (11-day) closing range in history: An unprecedented event.
Now that we appear to be at the upward extreme, what happens next may be unprecedented as well.
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For technical analysis on individual stocks, markets or indices, please visit our parent site at www.ten-trading.com
If you want to get rich, you have to go broke first. Maybe you’ll have to go broke several times.
It seems this step is an invariable requirement in the acquisition of wealth. The market masters of the early 1900’s went broke. Speculators like Livermore, Keene and Wyckoff.
Even Robert Prechter of Elliott Wave International has stated as much in his interviews; He puts it a little differently:
‘Be sure to lose your first fortune(s) early … so that you have time to recover.’
Note his inference on ‘recovery’. Winners recover. Losers recount.
I have an acquaintance that wants to begin trading in earnest; searching to gain significant wealth. He’s already had a successful career having been a weapons officer in the Air Force and later, an aerospace engineer.
Now, he asks me market questions, the answers to which require that he invest countless hours (and possibly years) of study and dedication to learning the craft.
After a recent barrage of such questions and in a sense of exasperation, I simply said:
“If you want to learn about the markets, the best way to do that is to start losing money.”
How much better it would have been for my own firm to have understood that fact. We would have set up at least three separate trading accounts … the first two of which were expected to go to zero.
If by that time (the third account), a concise plan had not been developed, well then, one can at least decide to exit the profession altogether having lost only 2/3rds of one’s wealth instead of it all.
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For technical analysis on individual stocks, markets or indices, please visit our parent site at www.ten-trading.com
For there to be a lasting blow‑off capitulation up‑thrust (and reversal downward) in gold, the stage needs to be set.
Reports like the one at this link help to set the stage for investor panic.
Personally, I appreciate Greg Hunter’s weekly wrap up and have watched it for years. Mr. Hunter was an investigative reporter, unique in his style and ideas … as is typical of someone with an edge or focused capabilities, he found himself on the receiving end of a corporate pink slip; or as he put it, ‘We have chosen not to renew your contract’.
On the flip side and by definition, Mr. Hunter’s guests are part of the masses; they are in the public eye. In that case, their ideas are public and mainstream. In the final outcome, the total of all mainstream and public (trading) ideas must result in loss.
Will this time be different? Will gold and silver see a blow‑out move to the upside and keep on going? Certainly, it could happen. Anything can happen.
As has been reported previously, sentiment indicators do not favor a long term sustainable upside move. There is too much bullishness.
What’s more likely, is some kind of penetration above known resistance with the attendant mass hysteria about “This is it!”
If and when that happens, we’ll be on the sidelines monitoring volume and price action … with an eye on going short. If so, we’ll be positioned for a potentially dénouement down move in the precious metals and mining shares.
For technical research and analysis of the precious metals and other sectors, please visit our parent site at ten-trading.com
’cause Kansas is going bye – bye.”
If there’s a spot for the market to reverse, this is it.
With markets at stretched, bloated and obscene valuations (as reported by David Stockman), we even have an article that tells us the bull market is just getting started.
Well, anything can happen but false narratives abound at the extreme end of a trend. A ‘new bull market’ could very well be false.
In depth technical discussions of the S&P and other markets are on our corporate site located here.
The bottom line is, we might already be on the ride … to much lower levels.
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The Danger Point® 