SOXX From The ‘Short Side’

May 10, 2024 By in Semiconductors, SOXS, SOXX 1 Comment

A Look At Leveraged Inverse: SOXS

Just a reminder, the Inverse Fund trades contacts that rise in value if the tracking fund (in this case, the SOXX) declines in value.

Add to that some 3-X leverage and it’s a potential rocket in either direction.

The last update on the SOXX, link here, said we’re at The Danger Point® and since then, nothing has changed.

At the open today, SOXX posted an attempt to launch higher that was quickly reversed. Price action then spent the rest of the day in a narrow trading range.

So, what happens now?

For a look at the probabilities, we’re going to use the 3X leveraged inverse fund SOXS.

Semiconductors 3X Leveraged Inverse SOXS

What we’re highlighting here on the hourly, is net distance traveled on the down move (upward in SOXX), getting shorter with each successive thrust.

Add to that, ‘tight’ hourly bars for five-hours of the trading session.

Tight action precedes (typically) some type of directional move or breakout (not advice, not a recommendation).

Obviously, with tight action in the upper half of the day’s trading range, one would expect a directional, breakout move to the upside (downside for SOXX).

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.

The Danger Point®, trade mark: No. 6,505,279

SOXX … About To Pivot?

May 9, 2024 By in David Weis, SOXS, SOXX, Wyckoff 1 Comment

Downside Energy & Acceleration

It’s been three weeks since the SOXX, competed nearly an 18% plunge that started back on March 8th.

Price has action rebounded since then.

However, in the past several days, it has completed an upside test and now (as of 12:05 p.m., EST) is posting a potential reversal to the downside (not advice, not a recommendation).

The 3-Day chart shows us the prior move had the second largest downward thrust energy, ever, for the index.

Semiconductors SOXX, 3-Day

The last downthrust energy, the largest ever, kicked off a decline lasting from January of 2022, to October the same year.

Moving closer-in on the details we have the following:

Do we have a ‘mini’ Up-Thrust, in the expanded view?

Whether the SOXX, is about to reverse down or not, one thing looks clear, it’s at The Danger Point®

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.

The Danger Point®, trade mark: No. 6,505,279

Biotech … Nears 50% Retrace

May 6, 2024 By in $SPSIBI, Biotech, LABD, SPBIO, Wyckoff, XBI 3 Comments

Will That Be The Top?

When we last left biotech XBI, a push higher into a potential stop-zone was expected, link here.

‘The tape is always right’ as they say, and price action, somewhat unexpectedly, blew past those stop levels.

At this point (12:27 p.m., EST) we’re nearing the 50% retrace on the XBI. That level is somewhere around XBI, 92.28-ish. Currently XBI is trading at 90.12, about 2-points away.

We’ll do a little experiment with the weekly chart by inverting it to show the longer-term view.

Biotech XBI, Weekly (inverted)

Note the MACD lines are still crossed to the upside.

One way to look at the action is that we’re in a test of the spring set-up (up-thrust, non-inverted).

The retrace to the 50% level may have already happened with last Friday’s action.

However, it’s just a sneaky suspicion, XBI may try to inch itself past the daily highs of April 9th, and April 11th (not advice, not a recommendation).

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.

The Danger Point®, trade mark: No. 6,505,279

Life Insurance … Another ‘Sleeper’

May 4, 2024 By in Natural Gas, UNG, Life Insurance, MET

The Biggest, Of All?

Just like the Nat-Gas reversal, which is now on-going, Life Insurance may be the biggest downside sleeper of all (not advice, not a recommendation).

Searching the YouTube vortex, turns up this, on the largest cap of the sector; Met Life, MET (time stamp 2:27).

It’s the usual suspects. Another (almost) knee-jerk, ‘buy-the-dip’.

Let’s take a look at what’s really happening with Life Insurance, looking at the long-term view.

Life Insurance Sector, Weekly Close

The last major melt-down during ’07 – ’09, had the index collapse over 76%

Moving to the topping action highlighted in the zoom area, we have the following:

Then, on to the largest cap in the sector, our chief cook and bottle washer, Met Life (MET), there’s this:

We may find out as early as next session, if MET is in a downtrend or spring position, ready to move higher (not advice, not a recommendation)

The chart nuance advocating against a viable spring is the reduced upside volume on Friday when compared to a day earlier; up volume contracts 46%, when compared to downside volume on Thursday.

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.

The Danger Point®, trade mark: No. 6,505,279

Silver Top … Part IV

May 3, 2024 By in David Weis, DUST, GDX, GDXJ, Gold & Silver, Gold Miners, JDST, SLV, Wyckoff, zsl

Below Resistance

When the upside comes to a halt, it’s the ‘evil manipulator’s’ fault.

At least, that’s the common lament from our friends and pundits, alike. 🙂

Just a reminder, the markets have always been manipulated.

Back in the day, Wyckoff understood this. He sought to find out through price action, the desired (market) outcome of those ‘manipulators’.

By using his technique and reading the tape, the most probable direction for silver (SLV) was either sideways congestion or downside reversal.

The last update, link here, had this to say:

“If we’re in an up-thrust about, to reverse lower or consolidate, this is the type of market behavior to expect (not advice, not a recommendation).”

From then, we see SLV has moved lower.

Silver SLV, Weekly

Can reversals themselves, be reversed?

Could SLV, somehow gain traction and move decidedly higher? As David Weis used to say, “Anything can happen”.

However, at this juncture, we have SLV closing lower the past two weeks. Volume was steady and elevated, indicating downside pressure.

Separately, the miners are struggling (especially the Juniors GDXJ) at resistance.

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.

The Danger Point®, trade mark: No. 6,505,279

Miners … Struggle At The Top

May 1, 2024 By in DUST, Federal Reserve, GDX, GDXJ, Gold & Silver, Gold Miners, Interest Rates, JDST, Wyckoff 1 Comment

Looking Behind The Curtain

Did rates get lowered? … No? … Not Yet?

Well, maybe next time.

Good thing we’re not wasting time, talking about the circus rolling into town every two months or so.

It’s hard enough ignoring the ‘experts’ to remain focused on price action and the truth.

This update will be brief, self-explanatory.

Junior Miners, GDXJ, Weekly Close

Gold is near all-time highs but Silver along with Platinum and Palladium are far below their respective highs.

This is not what you would expect to see in a hyper-inflation scenario.

The Juniors have been struggling at the axis line, now resistance line, for several weeks.

Today’s non-event, may be the catalyst, taking the punch bowl away from the six-week rally (not advice, not a recommendation).

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.

The Danger Point®, trade mark: No. 6,505,279

If, I Was Short Biotech …

April 30, 2024 By in $SPSIBI, Biotech, LABD, Richie Naso, SPBIO, XBI 1 Comment

Where, Would I Put My Stops?

As former floor trader Richie Naso says, ‘You have to think like a criminal’ (time stamp 10:50).

Using his example, a market-maker executes orders ‘to create liquidity’; where on the chart of biotech XBI (below), would that bundle of ‘order’ liquidity exist?

Biotech XBI, Daily

The purple oval shows where there’s a potential of congregated ‘stops’.

Also note, the MACD cross.

This trigger signal is on the Daily MACD, only as the weekly shows longer term momentum continues lower (not advice, not a recommendation).

At this juncture, XBI has broken out of previous trend channels and so, we have a new construct.

Positioning

Presently, I have no open positions in biotech (not advice, not a recommendation).

Back in the day, I would likely be holding short, placing my stops exactly at the location of the purple oval.

Let’s see if the market searches out my old stop location that if hit, would have taken me out of position (via LABD) right in time for a potential reversal to the downside. 🙂

Reminder, Fed interest rate announcement tomorrow.

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.

The Danger Point®, trade mark: No. 6,505,279

Newmont … Deep Kimchi Decision

April 27, 2024 By in Biotech, Bloor Street Capital, Ed Dowd, Genesis 41, Gold & Silver, Gold Miners, IYR, NEM, Real Estate, XBI 3 Comments

Time To Round Up, The Loonies?

If there’s one market attracting huge numbers of grifters, carpetbaggers, peddlers, and all-around crazies, it’s precious metals.

I’ve been hearing from this crowd, ‘the government’s going to collapse, the dollar’s going to collapse’, since the early 1980s.

As said many times before, I like precious metals as much as the next guy.

However, from a strategy standpoint, with each passing day, we see it’s the food supply (here, and here) that comes first (not advice, not a recommendation).

What’s currently taking place is so much more complicated (in my opinion) than just ‘stacking’.

Let’s not forget the flood of ‘fake’ or ‘diluted‘ precious metals and other chicanery; like having your coin-shop bank account closed for no apparent reason.

Well, we have to keep the loonies on the path which brings us to our case in point, Newmont Mining, NEM.

Newmont, Good News is Bad News

Gold price has moved higher over the past four to five months and expectedly, that’s been noted in Newmont’s latest Quarterly release, link here.

NEM, stock price at ‘nine-month highs’, what’s not to like?

It’s when we look at the chart, we see a different story.

Newmont Mining, NEM, Weekly

After all the ‘good news’, NEM has only retraced an anemic 23.6%, of its overall downside move.

Note the close on Friday was right at the 23.6% level, giving it even more significance.

This level has also become an ‘axis line’ as exhibited by price action going back to August of 2022.

By The Numbers

When looking through the major sectors, retrace (and reversal) from 23.6%, is becoming more frequent.

Two other indices posting and reversing from that level (measured from recent highs), are biotech XBI, and real estate, IYR.

NEM, What’s Next?

Thursday, 4/25, was a wide bar with heavy volume.

We’ve stopped at the retrace, which is also resistance, confirmed by price action in late December. ’23.

A reasonable expectation is NEM, retraces, testing the wide bar and volume before continuing to the downside or moving back higher to a breakout (not advice, not a recommendation).

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.

The Danger Point®, trade mark: No. 6,505,279

Market Perfection … Does It Exist?

April 25, 2024 By in $SPSIBI, Biotech, Katie Hopkins, LABD, SPBIO, XBI

When Everything Lines Up

Perfectly Imperfect.

The insert at left, is a picture of the Romanesco Italia Broccoli.

Is it perfect, imperfect, or perfectly imperfect?

When looking at the current biotech chart (below), the same question may be asked.

At this point, Fibonacci correlations are perfect. The counts, the retrace, the channel widths.

The imperfect part is, where the count started.

It was not at the ‘print’ top, the ‘closing’ top, but at the location where there was a ‘change of character‘.

Not In Any Book

There are many books covering Fibonacci; the retrace levels, projections, counting from highs to lows, and so on.

However, I have not (personally) seen in any book, starting a count that was not at the top or bottom of a move.

So, what else could the biotech sector (XBI) be doing this morning, that’s not covered in any book?

Biotech XBI, Daily

First off, let’s not forget why this sector may be down from its highs (February, 2021), as much as it is. This link may help as a reminder.

As the chart implies, the question for the day, or days ahead is, ‘will today’s opening gap-lower, be filled?’

The market itself has shown, at times, it will fill the gap and at other times, will not.

At this juncture (11:20 a.m., EST), XBI has penetrated the prior daily low (of 4/19) and has set up the condition of potential (minor) spring.

Price action’s rising as of this post but appears to be struggling on its way higher.

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.

The Danger Point®, trade mark: No. 6,505,279

Stretched … Squeeze … Over?

April 23, 2024 By in $SPSIBI, Biotech, Dr. Elder, LABD, SPBIO, XBI

Do We Have A Channel?

How do you know if it’s a countertrend move, or an outright reversal?

Do you stay with the trade or, as Dr. Elder said, ‘do you just take the money and run?’

For biotech XBI, it’s been a nasty two days of upside for any short positions, but the real question is, are we there yet?

Looking at the charts below, you’ll have to decide for yourself.

However, from my perspective, it’s possible that ‘today is the day’; meaning, we may be at the top of the correction (not advice, not a recommendation).

Biotech XBI, Daily

The chart is self-explanatory.

From the day a ‘change of character’ was identified to last Friday’s low, is a Fibonacci 21 days.

From that low to today, is a Fibonacci 3 Days.

We’ll compress the chart scale for a bigger picture view of the current action.

Also included is the grey centerline, showing the channel has a symmetrical ‘look’.

Also note, we’re at a 23.6%, retrace at the day’s high (thus far) and price action appears to be eroding downward.

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.

The Danger Point®, trade mark: No. 6,505,279