The Usual Suspects

December 16, 2023 By in $SPSIBI, AMT, Biotech, BOIL, Bonds, CVNA, DRI, Federal Reserve, Food Supply, Genesis 41, GLD, Gold & Silver, Gold Miners, IYR, LABD, Natural Gas, Real Estate, Semiconductors, SLV, SOXS, SOXX, SPBIO, TBT, TLT, Uneducated Economist, UNG, Usual Suspects, WEAT, Wyckoff, XBI 1 Comment

Everything Happening At Once?

Not in any particular order; not advice and not a recommendation.

No 1. There (still) is no Fed Pivot. Seriously, have rates really, actually been lowered? Everyone has a huge case of ‘normalcy bias’. i.e., what the Fed did last time will happen this time.

The 40-year bond bull market from the 80’s, ended in 2020. We’re in a different paradigm now.

No. 2 Natual Gas UNG, is reversing. We’ll see whether or not there’s going to be a supply disruption.

No. 3 The semiconductors SOXX, now have a monthly bearish MACD divergence; daily and the weekly indicators posting even to prior tops (as of Friday’s close). 

No. 4 Components of biotech index XBI, are being shuffled around faster than deck chairs on the Titanic … or, the Olympic 🙂

Seems like a mad dash to add/remove, increase, reduce equities to prop things up. We’ll see how that turns out. Currently, XBI is right at resistance level, 86.50 – 87.0

Here’s just one example from an index, riddled with equities that have no P/E.

No. 5 Carvana is very close to posting new highs and potentially, running the stops.

No. 6 Has Darden Restaurants, topped out? 

The consumer is certainly tapped-out and no-one ‘needs’ a restaurant.

No. 7 Wheat is reversing; It is and has always been about the food supply.

No. 8 Gold, GLD, is currently not going higher (look at the divergences); silver (SLV) is in a major non-confirmation, down nearly – 55%, from all-time highs.

During the 1980s inflation, precious metals moved (upward) together.

Silver looks like it’s responding to the destruction/collapse of (economic) demand.

No. 9 American Tower (AMT), number two in the IYR index, posts a clear false breakout and reversal. 

If rates really are going (materially) lower, interest rate sensitive real estate should continue going higher, right?

No. 10 Which brings us to the bond market, TLT. 

Price action broke above established resistance, currently hovering above that level. 

It’s at The Danger Point®

We can see the set-up, a price action pattern repeated time and again, between the lower and upper blue lines, called a ‘Spring-to-Up-Thrust.

While the media laughs at the bears, let’s just see how this all works out.

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, ‘Double’ Divergence

December 13, 2023 By in Positions, Semiconductors, SOXS, SOXS-23-11, SOXX 1 Comment

Weekly & Daily … Bearish MACD

With the SOXX at 52-week highs, price breaking out above resistance, Fed announcement hours away, the index is showing signs of reversal, posting a bearish divergence on two timeframes.

Both weekly and daily MACD, show divergence.

Add to that, we now have the best ‘inter-Fed’ market performance since 2009.

Semiconductor SOXX, Weekly

The chart shows we’re at The Danger Point®

As this update is being created, the SOXX is pulling back slightly, from its early session up-side; currently trading (11:45 a.m., EST) near unchanged @ 544.39.

Positioning

As one would expect, short positions are already in-place (not advice, not a recommendation).

Entries via 3X Leveraged Inverse SOXS, @ 7.14 and 7.07; Hard Stop TBD, but likely to be today’s session low @ SOXS 6.97 (not advice, not a recommendation).

As a housekeeping note, all other market positions have either been closed or stopped-out.

At The Extreme

SOXX price action could continue higher from here. 

If there’s even a hint of renewed upside pressure, the existing short position is likely to be closed … quickly, possibly without notice (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

Biotech Bellwether … CRSP

December 9, 2023 By in $SPSIBI, Biotech, CRSP, IMGN, LABD, LABD-23-16, MRTX, Positions, SOXS-23-10, SPBIO, Spring-to-Up-Thrust, Wyckoff, XBI

Repeating Trend, Cashing-Out

Once again, there’s a repeating trend of (potential) reversal.

This time, it’s biotech, specifically CRISPR Therapeutics, CRSP.

Before we get into it, a point of housekeeping; SOXS-23-10, has been closed, exited at SOXS 8.43; loss is manageable at -2.9% (not advice, not a recommendation).

CRSP, Market Proxy

CRSP, is being used as the proxy for biotech as it’s number five in market cap at this link.

However, the first two IMGN, and MRTX, are buyout (acquisition) candidates, eventually to be removed, making CRSP, number three with no additions.

Set-Ups That Repeat

Market behaviors repeat. Set-Ups repeat. The title above, was from a post over two years ago, link here.

Taking a look at CRSP, we have the same pattern.

CRISPR Therapeutics CRSP, Weekly

The volume spike for the week, is the largest ever; ergo, someone is selling.

From a CRSP, price action catalyst and news standpoint, the link is here.

This coming Wednesday, is the Fed interest rate announcement, link here.

Wyckoff said, ‘somebody always knows something and that “something”, shows up on the tape’.

It’s likely those that know, are cashing out ahead of the meeting (not advice, not a recommendation).

Positioning

If it’s presented on this site, a position has already been established or it’s in preparation for entry.

So, it is with biotech.

A biotech short was opened this past Friday via LABD with two entries: LABD 13.93 and LABD 14.17.

Trade is labeled, LABD-23-16

Hard Stop @ LABD 13.82, for a combined (both entries) risk of 0.23-pts/share (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

SOXX: Gap Close, Then Lower

December 6, 2023 By in Positions, Semiconductors, SOXS, SOXS-23-10, SOXX

Look For Continued Downside Pressure

At the open, SOXX launched higher, closed its gap near 515.0, and then began an immediate retrace.

Price action has oscillated for the first couple of hours, testing the gap and attempting to move higher.

So far, it’s not happening.

If we get a lower close for the day, it’s likely to be nasty business for the bulls from here on out.

As this update is being created (12:08 p.m., EST), price action is getting nearer to posting negative for the day; currently trading at SOXX 510.50

Semiconductor SOXX, Daily

We’re using a bar chart as it’s easier to see the gap area that was closed early this session.

Warning: However unlikely, SOXX price action could begin to exhibit buoyancy for an attempted move higher; anything can happen.

Positioning

The short position, SOXS-23-10 remains active (not advice, not a recommendation).

From the original entry, SOXS position size has been increased by over 60%

At the close of the day, the stop is likely to be moved from its current level (SOXS 8.30), to just below today’s session low @ SOXS 8.38 (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

There’s a ‘Hole’ in The SOXX

December 2, 2023 By in NVDA, Positions, Semiconductors, SOXS, SOXS-23-10, SOXX, Wyckoff 1 Comment

Two-Weeks of Churn

The SOXX, has been churning at 510- 525, for over two weeks with no net progress.

What happens if it can’t go materially higher?

It’s reasonable to think, good news is already out; evidenced by Nvidia’s price action.

If we look at NVDA, using it as the proxy, it has reversed off all-time highs, slipped below support and on Friday, came back to test; a weak one at that (so far).

SOXX Highs, Long Ago

The SOXX posted its all-time-highs nearly two years ago with the most recent rebound in August, this year.

Now, after a subsequent move lower, price action has come back up to test, forming an apparent hole.

Semiconductor SOXX, Daily

The chart says it all; We’re at The Danger Point®

Price action appears to be struggling at this level.

If it can’t break higher and/or, posts a new daily low, it may be confirming a false breakout (Wyckoff, ‘Up-Thrust’).

That would open up possible testing of gaps (lower), potentially the Trading Range lows, as well (not advice, not a recommendation).

Positioning

As one would surmise, a short position was opened on Friday via Leveraged Inverse Fund SOXS.

Entry @ SOXS 8.59, Hard Stop @ 8.22, Soft Stop (discretionary) @ 8.30 (not advice, not a recommendation).

Trade is labeled: SOXS-23-10

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

The ‘Sleeper’ Trade

December 1, 2023 By in Natural Gas, Positions, UNG, UNG-23-07, UNG-23-08

All Quiet, In Nat-Gas

We’re likely in the ‘Desperation’ phase of the Nat-Gas market.

Longs have literally been beaten to a place where there appears to be no more downside.

Today’s opening posted a new daily low of only 0.01-pt, before reversing, now trading higher (as of 1:17 p.m., EST).

Nat-Gas UNG, Hourly

One more new low, then reversal.

An hour-long upside bar shows ‘Sign of Demand’ and then a shallow retrace.

Positioning

Yesterday’s trade UNG-23-07, was exited in today’s pre-market session at the stop low of UNG 5.44 (not advice, not a recommendation).

After the upside reversal, the trade was re-opened.

The new position is labeled UNG-23-08 with a Hard Stop at today’s low of UNG 5.43 (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

UNG … Target Lows, Reversing

November 30, 2023 By in Natural Gas, Positions, UNG, UNG-23-07

Price Capitulation?

Since early October, the Nat-Gas longs have been absolutely bludgeoned.

UNG, went from a high of UNG 7.98, to today’s low of UNG 5.44, a – 32%, decline (almost, ’33’) in just a Fibonacci 8-Weeks.

Now, UNG may have capitulated.

When looking at the Nat-Gas Jan-24 futures NGF24, (hourly chart) we see a large volume spike near Tuesday’s low and today’s.

Massive volume spikes, typically represent capitulation.

The (weak) longs have sold out.

Nat-Gas: The Set-Up

The work has already been done here, here, and here on the potential opportunity for a long position in Nat-Gas.

With that said, as UNG hit the ‘5.55’ target and then declined slightly, an initial position was opened at UNG 5.4999 (not advice, not a recommendation).

Nat-Gas-UNG, Daily

Price action hovers near the ‘5.55’ target for three days and now appears to be reversing.

As this post is being created (11:55 a.m., EST) UNG appears to be moving away from the session lows.

Positioning

Trade entry as shown @ UNG 5.4999 (not advice, not a recommendation).

Trade is labeled as UNG-23-07

Hard Stop is TBD but will most likely be the session low @ UNG 5.44 for a ‘risk’ of 0.06-pts/share.

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

What To Expect … For Biotech

November 25, 2023 By in $SPSIBI, Biotech, LABD, LABD-23-14, Positions, SPBIO, Wyckoff, XBI

When The ‘Thrust’ Shortens

The balls clicking away on a Newton’s Cradle, will eventually come to rest; so, it is with markets and reversals.

Price action moving in one direction will eventually stop, then reverse.

The ‘how’ and ‘when’ of that action, is what we want to know.

Years ago, Wyckoff observed, reversals were likely when price action began to have a ‘shortening of the thrust’.

We can see that in the chart of inverse biotech fund LABD.

Biotech 3X Leveraged Inverse Fund LABD, Hourly

Friday’s action posted a new LABD low of 0.01-pts, corresponding to new XBI high, of 0.02-pts.

From a shorter thrust perspective, we’re looking for net downside progress, not overall distance.

Looking at the chart, it’s reasonable to expect biotech SPBIO, $SPSIBI, XBI to decline in the coming sessions with leveraged inverse fund LABD, rising accordingly (not advice, not a recommendation).

Positioning

Those monitoring this series on trading the sector, have been privy to the actions taken by one speculator to position (and re-position) short via LABD.

With the understanding, anything can happen, I have an open short via LABD, noted as LABD-23-14.

Hard Stop is last Friday’s low of LABD 17.61, with Soft Stop, discretionary, near LABD 18.00 – 18.09 (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

Biotech Bump & Run?

November 24, 2023 By in $SPSIBI, Biotech, LABD, LABD-23-13, LABD-23-14, Positions, SPBIO, XBI 1 Comment

Posting A Slight New High … And Then?

Is biotech price action nerve-wracking indecision, or just the normal process of clearing out weak hands?

First, The Housekeeping:

Short trade, LABD-23-13 stopped out @ LABD 18.40 (not advice, not a recommendation).

Trade was re-opened as LABD-23-14, with entry @ LABD 18.28, Hard Stop @ the session low, currently LABD 17.61 (not advice, not a recommendation).

Did we just have a double bottom?

Biotech 3X Leveraged Inverse Fund LABD, Hourly

This is how it looks as of 12:00 p.m., EST.

Right now, LABD is hanging slightly below the trading range (blue lines).

If price action manages to re-enter that range, it adds weight to a sustained reversal case.

Positioning

As noted, a new short position was opened at a lower LABD entry; LABD-23-14.

If we get continued downside action in LABD during this session (upside in XBI, SPBIO, $SPSIBI), then a discretionary exit could be made regardless of stop location (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

‘Counting’ … So, Old School

November 23, 2023 By in $SPSIBI, Biotech, LABD, LABD-23-13, Positions, SPBIO, XBI

If Nobody’s Doing It …

The Fibonacci count may be something, it may be nothing.

However, if nobody’s doing it, then probabilities for success could increase.

We’ll find out soon enough, maybe tomorrow.

The set-up criteria for biotech are here, here and here.

Now, biotech is at The Danger Point®, where risk of being wrong on a short position, is least (not advice, not a recommendation).

Biotech XBI, ETF, Daily

From the beginning of the potential trading channel, to the XBI high this past Monday, is a Fibonacci 89 (+1) Days.

Note, there were three days in succession, July 17 – 19, 2023, at essentially the same high; indicating the Fib count (at 11/20/23) could be 89(+1), 89, or 89(-1).

The channel lines are self-explanatory; note the symmetry.

Positioning

As noted previously, there’s an open short, LABD-23-13, with Hard Stop @ LABD 18.40, yesterday’s session low (not advice, not a recommendation).

The stop is tight (similar to this trade), so we’ll see.

Happy Thanksgiving Everyone. 🙂

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