Thursday, November 30, 2023

Taking another look at this rally in Gold

 A 1 day short covering rally in gold, which was telegraphed by Fast Money traders - weeks ago - doesn't a bull market make, and any time I see the usual suspects pumping a rally on TV, I usually take the opposite side of that trade; at least in the longer term; so perhaps my opinion is overwhelmingly bias, but the fact remains, gold has NOT broken out. Talk of a breakout is just talk 

1. Is the $USD crashing? No, despite what the host of Fast Money falsely reported this week.

2.  Is the 4th time (testing the$2000 level) - in 4 years - going to be a charm? Maybe 

3. Could we see another false breakout  - like the one we saw earlier in the year? Possibly 

We know the rats of Wall Street will drive anything into a breakout, in order to squeeze a few short sellers, and especially on low holiday volume. 

Couple things in the charts; to add to what I pointed out yesterday: 

$USD - Doesn't look like a "crash" to me. 




$GOLD Weekly View - 1. Buying of the moving averages. 2. The slightly higher false breakout we saw earlier in the year. Does that count? Not in my book. Looks like a quadruple top; if there is such a thing. 



$SPX: Gold The rug was also pulled on the $SPX priced in Gold. Who does this? 


Another thing I noticed yesterday, was that Silver was also driven higher.... 

$SLV - Silver - another orchestrated 1 day short squeeze. Looks like a bearish zigzag pattern. If you know Elliott Wave Theory then you know....   



I think it's more likely that yields are about to spike, with the $USD, and that will likely crash gold, or silver, or both, so watch for that.   

What I can't figure out is, why did traders choose Wed. of this week to pull this stunt?  

Take care, AA 



Wednesday, November 29, 2023

Looks like I may have been wrong about Gold

 Trading has been really dull, minus yesterday's washout in Natural Gas, and the rally in gold, and gold miners.  

It was back on Nov. 6th, I covered the gold pump -  as I watched it take place on Bloomberg & CNBC simultaneously - linked here

Gold was predictably bought in early November - at the 50 day moving average - but it wasn't until yesterday that we saw any unusual moves in gold. 

$GOLD - breaks out on light holiday volume 


I'm not really sure what to make of that move, but one important thing to note is that it didn't happen until after the Dec. contract expired. 

I also noticed some unusual looking breakouts on several beaten down gold miners, including names like Harmony Gold. 

$HMY -  Obviously manipulated, in order to squeeze some short sellers. 

I wanna say the usual boiler-room crew is driving this rally, and Fast Money seems to be on board with it, but I would have expected to see names like Rio up more, if that were the case.  

It seems to me that this gold rally wasn't well thought out, and is being performed by a bunch of amateurs. I do however think these gold stocks will hold up into weekly OPEX Friday.

It could actually be weeks before we see a reversal in Gold, and gold miners. Just look at how long the broader market takes to form a top - weeks! - and especially on such light holiday volume.      

One thing to watch is the 20 day moving average on the $GLD: 


Homework - chart several gold miners, including the most important one - Barrack Gold - and see if you notice any obvious patterns. 

The broader market: 

$SPX - seeing st support around the 4400 level.  



I expect to get back to more normal markets when traders return next week. 

Hope you all had a happy Thanksgiving. 

Take care, AA |

PS I completed the new computer build over the weekend, and just in time to kill time playing some of the latest video games. 




Friday, November 24, 2023

Very unpredictable market environment could turn volatile Black Friday

Trading Activity Around Holidays

Seasonality often plays a part in any investor's trading strategy. Some holidays in the U.S. market provide periods of decreased trading volumes, as many investors and traders are busy with vacations and family plans. There tends to be little business news released right before a holiday, too. investopedia.com

 With volume so light, it's possible to see very unpredictable trading.  

This in part explains the low $VIX, which was hammered down over the past several weeks, just as it was around the time of the 4th of July holiday. It's almost comical that this is the only market environment, in which the bulls can seem to stage a market rally.  

Here's what I'm seeing on the $VIX: 

You have the majority of investors believing that this rally is based on AI, and a possible "soft landing", and every other ridiculous excuse the financial matrix media can come up with, and at the same time they are very careful not to report on how short covering - ahead of the holiday - has contributed to the rise in equities. That sets up a very complacent market environment. 

Watch the Bond Market 

It was not so long ago, that the financial matrix media were telling us to fear the bond market, and that was about the same time I sent out a newsletter, in which I informed my followers that I was piling (the 401k) into a bond fund, and that trade worked great as we saw the bond vagilanties cover their shorts, ahead of the holiday season.     

To refresh your memory: 

Bill Ackman covers a bond bet because there’s simply too much risk out there to not do so. tipanks.com

Black Friday 

Today is Black Friday, and the market closes early, so don't expect much market movement. It's not technically a banking holiday, but most traders are on vacation.   

But when trading returns to somewhat more normal volume in Dec., anything can happen, and I'm a little afraid of the possible backlash... I mentioned earlier (above).

I've already exited the (long) bond trade (on Wed.) and I'm planning to send out another newsletter, warning my people. 

Have a great weekend, and try not to run up your credit cards on this Black Friday, as I believe we may be looking at a very gloomy 2024, and beyond.  

AA 

  



Wednesday, November 22, 2023

Best Decision I Ever Made

 A few weeks/ months ago I blogged about how I was going to start trading commodities more, and that has turned out to be one of the best decisions I ever made! 

To give you some idea, I closed that trade up 25%, and by diversifying into some commodities trades, I'm up 50% in the past 3 months.   

Meanwhile: Fast Money has remained bullish energy all year 

Guy Adami didn't read my tweet on the show, but the very same day, he did own up to being totally wrong on oil drillers, yet, he still doubled down on $OIH, and that was good for a 3 day rally. 

You can catch the whole show at this link, if you're dumb enough to pay for CNBC Pro

One of the reasons Oil is falling off a cliff:  

Biden Breaks Campaign Promise in Allowing New Offshore Drilling wsj.cm 


I suspect another reason Oil, and Natural Gas are getting killed is due to the coming economic crisis, because copper is also falling.  

This morning, the broader market continues to trade like crap, yet Oil is falling off a cliff.

Oil futures - 1 min. chart view, as it's being reported that a decision by OPEX... may be postponed. Yeah, a lot of good these so-called "production cuts" have done for the price of oil! 


In related news, Carter Worth covered his oil short, weeks ago, once again proving he isn't the chart master, CNBC claims he is.  

You can catch that free video here: Chart Master: What's next for oil and energy stocks?

The reason Carter Worth gives for covering his oil short, is that oil was down $20. 

Word of caution: We routinely see big moves in commodities - in either direction - and that carries with it, added risk, and especially when trading on margin, or trading leveraged ETF's. 

Take care, and have a Happy Thanksgiving! 

AA 


Tuesday, November 21, 2023

Looking for support on the Nasdaq, and how to trade it

 I decided to look for support on the Nasdaq this morning, and I didn't have to look too far.... 

Some of you may be asking, why would you be looking for support, rather than a top?   

 That's because markets tend to overshoot, and especially in the type of pattern we're trading in. Plus you see short squeezes this time of year, and that can cause markets to overshoot. 

You'd be hard pressed to find the absolute top, and sell it precisely.

This leaves you with 2 options: 

1. You can either sell into strength, and scale in over time. 

2. Or you can wait until you see support break, and pile on... 

I always prefer to sell into strength, but that can get you into trouble, especially if you start building a position too soon, or at the wrong time.

This is really the wrong time to sell, because short sellers are covering ahead of the long Thanksgiving holiday, but I suppose this time could be different.  

We've seen the windows dressed, and many funds are closing their books on a blow-out year - if you were overweight tech. To give you some idea, there are certain tech funds that are up over 40% for the year! 

$FSPTX - Fidelity Select Technology - for example - 

 


I suspect the bulls won't take profits until after the first of the year, so they pay lower taxes.

I can't share any of my Nasdaq charts, because they're just too valuable, and the hedge funds don't deserve any help from me.  

The broader market: 

I can share with you an interesting view of the New York Stock Exchange chart, because it doesn't give away any targets.  

$NYSE - in contrast hardly even up for the year. 2% maybe? I'm also seeing several bearish indicators, including a right shoulder target, near the top of the same range we've been trading in since march. 

 


Here's some easy homework: Pull up a 3 year (DCS) view of the Dow Jones, and count the number of times it has tested this 35,000 level. 

I can't say that the market is going to sell off any time soon, but I sure as hell wouldn't be chasing it up here. 

Take care, AA 


Monday, November 20, 2023

Investors may look back on this moment, and say... RE: $SPX Nasdaq $MSFT, $INTC, $NVDA $TSLA

 Investors may look back on this moment, and say, "this is where we should have sold the AI rally"!

This morning we're seeing Microsoft trade at fresh all-time highs in pre-market, on more Sam Altman news. 

Satya Nadella's Big Announcement On Sam Altman After OpenAI Sacking


"....we're extremely excited to share the news that Sam Altman and Greg Brockman, together with colleagues, will be joining Microsoft to lead a new advanced AI research team."

 

If in fact this news marks a major top for Microsoft shares, then the 345 level becomes short term support. 

Liked by Guy Adami: 

Speaking of AI

This rally is looking like capitulation on certain semiconductor stocks namely $INTC, as I revealed on Friday.  

$INTC - 

Of course everyone is watching for $NVDA earnings, which are due out after the close on Tuesday. 

Speaking of all these chip names: 

If you recall; I put off upgrading my - 10+ year old computer system -  for the past 2 years, because of the chip shortage, and the effect that was having on highly elevated prices. Well, my patience has finally paid off!  

A couple weeks ago, I upgraded to AMD 5600X3D, and it only cost me around $299 for the chip, cooler, board, ram, and 189.99 for a new video card - capable of running all the latest games.  

AMD Ryzen 5 5600X3D Review: New Mid-Range Gaming Champ Is a Micro Center Exclusive  tomshardware.com


I'm stoked about this purchase, and can hardly wait to start the new build. 

I still need to upgrade to Windows 11, but as I understand it, that can be done for less than $20.     

How to get Windows 11 cheap (or even for free) pcworld.com

If you're in need of some computer hardware, I highly recommend microcenter, either directly on their website, in store, or on Amazon. 

This is similar to the bundle I purchased, although the deal I got is limited to in store only. 


3xtraders.com may receive compensation on purchases made through affiliate links.  

Another Stock I'm watching closely over the next several days/ weeks, as we close in on the end of the quarter is Tesla 

Tesla $TSLA - in case you haven't heard, the deep state is working hard to cancel Elon Musk, again. 

Of course CNBC is joining in the fun!  

Elon Musk’s behavior and damage to Tesla brand is ‘absolutely outrageous’ cnbc.com

Notice how they falsely accuse Elon Musk of being an anti-Semite, just as they do Trump, and his supporters?  

I'm out of time, so that will have to wait for the next blog 

The Broader Market 

My read on the broader market is that the $SPX continues to tread water above the 4500 level, for a 5th day, with the next resistance level looking like - 4545 - the Nov. 2021 high. 

Volume and volatility is expected to be super light over the next couple weeks, and I wouldn't expect anyone to want to get very short, going into the Thanksgiving holiday.   

Take care, 

AA 




 

Friday, November 17, 2023

Does this rally have legs? The Short Answer

 Does this rally have legs? 

The short answer is no. Sure, we could see more short covering as we get further into the holiday season... and money managers are being forced to chase gains into the end of the 4th quarter (window dressing), but this is a low volume - short covering - rally, just like we saw back in July. 

I recognized this several months ago, when I pointed out that retail was being sold (shorted), ahead of the holiday shopping season. See the weekly update blogged Friday August 25, 2023 

Looking at Yesterdays Bearish Engulfing Pattern


"Some hedge funds returned from their summer break early, in order to try to shake the weak hands, on light summer volume, because they don't want to be forced to chase a summer rally. 

Who else would be taking retail down, only a few months ahead of the holiday shopping season? 

Eventually these hedge funds will be forced to put money to work, and probably sooner, rather than later."

Walmart $WMT - Walmart is an exception. Instead of selling Walmart ahead of the 4th quarter, Walmart was driven to new all time highs, before it was suddenly dumped yesterday. 

Same could be said for names like Cisco, which was recently pumped to 2 year highs, before giving back nearly all the gains of 2023.  

Cisco $CSCO chart - this is a good example of why you should always be  suspicious of fake headlines, like 18 month highs, and 10 day winning streaks, which are nothing but catch phrases, designed to trigger animal instincts.   

 

This must spook some money managers, and I suspect the buying frenzy we've seen over the past few weeks is about to come to an abrupt end. 

Financials tell a story - see all the gaps being left behind on the chart? Those point to panic buying, by the short sellers, but most gaps fill within a certain amount of time.   


Speaking of Gaps 

Starbucks $SBUX - seeing an upside -gap fill - target, but a much larger gap was left behind...  



Another gap target I'm watching, and especially today, since it's Nov. Options Expiration Friday; and that would be the gap left behind on the $VIX, at the 50 day moving average. 

I'll let you track down that target for yourself. 

Some gaps never fill, and some don't fill for years. 

The $UAE chart is one of the most gappie charts of all, and especially over the past few weeks! 

$UAE  - gaps, gaps, and more gaps!  


Of course this market offers excellent trading opportunities, if you know where to look, you have some patience, and you don't let your emotions get the best of you. 

Take Care, and have a great Thanksgiving holiday, 

AA  

Thursday, November 16, 2023

The Biggest Market Rallies Happen In Bear Markets

 The Biggest Market Rallies Happen In Bear Markets 

I thought this was common knowledge, until I saw this tweet yesterday 

 When I see the number of likes on a tweet like that, I'm left asking myself, "is the average investor really this dumb"? 

I don't know what his motivation for spreading false information is, but all you have to do is look back at the bear market rally of 2020, to see a comparison...  

$FRCSX - Small Cap Fund - for example  



$SML S&P 600 Small Cap Index - for comparison. Nearly identical! 


Granted, it's a welcome rally, but nothing compares to the rally we saw coming out of the bear market of 2020, or the one coming out of the bear market of 2008, for that matter. 

For this reason I'm always looking forward to the next market crash, because they make for the best investment opportunities. 

$SML  - DCS View - Looks like the bears aren't giving up that easily.  


As far as the short term trade, I'm trying to sit on my hands for the next couple of days as we trade into Options Expiration, because I suspect the bulls are keeping their power dry... 

The Street is already calling the market "near overbought". Nice of them to warn the average investor, before taking the market down again, but to be honest, I'm not sure when...   

Markets Near Overbought, Inflation Analysis, Trading Cisco, Palo Alto and More yahoo.com/ thestreet.com 

Take Care, 

AA 


Wednesday, November 15, 2023

Michael Burry of 'Big Short' fame has closed bets against S&P 500, Nasdaq

We'll get to the headlines in a minute, but first; to update you on the market action. 

Yesterday's lackadaisical market action came to an abrupt end, no sooner than yesterday's CPI number was released, and just as expected, that's what was used as an excuse to continue squeezing the short sellers. See how the market action of the past 2 weeks, perfectly ties in with today's headline? 

Wall Street bulls always want to, "get the short seller" (make him capitulate), and they know how to do it! 

Case in Point: 

Investor Michael Burry of 'Big Short' fame has closed bets against S&P 500, Nasdaq yahoo.com/ thestreet.com

That's the face of a loser!


I remembered mocking this hedge fund manager back in August:

Apparently he hasn't learned his lesson, that loose lips sink ships, because now, this genius has decided to announce that he's betting against, the chips (semi-conductors) sector. 

Why ‘Big Short’ Investor Michael Burry Is Betting Against Chips, Including Nvidia barrons.com


Bloomberg asks, Are Markets Acting Irrationally? 

Of course they are. Markets act irrationally all the time, and especially when trading short squeezes.

I'm sure you've heard the term, "market can stay irrational, longer than you can stay solvent"? Well, that's true, and especially true, if you're a short seller. 

The only reason Bloomberg would have a guest on to claim that the market was not being irrational, is because it is.... 

First we were led to believe that a Fed Pause was hawkish (bearish), and and today we're supposed to believe that a Fed Pause is bullish lol 

One look at the charts, and the calendar, proves that the market is acting irrationally, not to mention yesterdays CPI number was nothing spectacular. 

$XLK Technology - gaps up to new highs, in order to force capitulation. 


It was not only tech that led yesterday's rally. 

I made big gains in several different sectors. 

In fact I spent most of the morning taking profits..

I'm still unsure if the bulls will get paid on their bullish Options, on Friday, and I think some giveback is overdue. 

Take care, AA

 




Tuesday, November 14, 2023

It's as if someone turned the spigot off

 Ever since Friday's short squeeze in big tech, it's as if someone turned the spigot off. I can't find a decent trade, so I've moved to cash.  

It could be we're already seeing a lack of volume, since Thanksgiving is next week. 

Typical Holiday Trading 

 Energy was sold and Big Tech bought 

I'm not sure if that trend continues, but we're about to find out. 

I think the fact that news of a new NVIDEA chip is being published, points to another pump n dump rally in the tech space, but we could see a little pullback first. I think that depends on who is short, going into Friday OPEX, and if we're about to see some profit taking. 

This mornings CPI Report  

Seems a little unpredictable here 

Nasdaq 

Take Care, 

AA 


Friday, November 10, 2023

Bitcoin Touches 38k, and speaking of CNBC

I started this blog yesterday, so I had to update the title to 38k, from 37k, after yesterday's pump n dump. 

CNBC even reported on yesterday's rally in Bitcoin, but they left out the fact that it looked like a blow-off top, followed by a swift $2000 point decline. 

Speaking of CNBC 

CNBC likes to report bear market rallies as "winning streaks" as if any investor counts the days... 

I guess it's just their way of trying to put a positive spin on a bear market. 

As I see it: The $SPX only managed to hold the 50 day moving average for 4 days, and technology - as usual - was leading... That was until yesterday afternoon! 

 Getting back to tech leading...

Microsoft  actually closed at new recent highs on Wed., and since the powers that be like to pump the high fliers - or the magnificent 7 as they like to call them - to new highs - in order to force bearish capitulation - before they take profits.... - $MSFT is the name to watch.

It's hard to predict if we're going to see a pullback before or after Thanksgiving, since that's just around the corner, but after yesterday's reversal, a short term pullback is looking more likely.  

Stocks may struggle until Thanksgiving as bond yields bounce. And one sector in particular is a turkey. 

The levels to watch today are the 50 day moving averages. 

$SPX continues to trade into a downturned triangle pattern. This image was saved before yesterday's midday reversal. 

  

Bitcoin Bounces back to 37k 


There's nothing historic about that target, since Bitcoin used to trade near 70,000, but this reminds me of when the Dow traded to 37k, in early 2022.

Dow Jones 37k 

In hindsight the Dow 37k target looks like a zigzag pattern, in a head fake wave "B", and the selling continued until we saw wave E, of A complete. 


And that bearish leading diagonal triangle set the course for the remainder of the bear market, in 2022.

Today we continue to see a lot of sideways consolidation, and that will likely continue into 2024.  

I'm out of time. 

Take Care, AA 




Monday, November 6, 2023

Gold, Seasonal Trend

I was watching gold bug Chistopher Verrone, on Bloomberg this morning, and it just seems a little too coincidental that he would come on TV and pump gold, just 2 days after Tim Seymour did exactly the same thing on CNBC Fast Money last week.  

It's not like we've seen gold breakout above $2000, so what gives? 

Gold, Seasonal Trend

 Gold seasonality comes into play in Nov., and that can set up for a rally that continues deep into February. 

Gold Futures Seasonality Chart - over the past 20 years   

Chart from equityclock.com

I added the green breakout line. 

The seasonality in Gold totally explains why traders are pumping gold in early Nov., but will this seasonal trend work in 2023? 

I can tell you Gold already broke out, back in October.  

$GOLD - gold rallied off the recent lows back in early Oct, and broke out above the 1940 level. 


Looks like Gold has already had a nice run, and I see two analysts grasping at straws! 

Take Care, AA 



Saturday, November 4, 2023

Bullish Reversal Confirmed

In my most recent newsletter - dated Saturday Oct 28th - I stated that it was clear to me that we were getting "very close to a bullish reversal", and here we are - only 1 week later - coming off the biggest rally we've seen since July! 

A week ago Friday I blogged: "if the $VIX is taken down below 20, then this rally has legs"  

Judging by the way all the bears on CNBC Fast Money continue to badmouth stocks, we could see a massive short squeeze..."  

I even alerted to the Bear trap on the $VIX 

This was after watching the head clown on CNBC Fast Money brag about the $VIX levels. 

The truth is the $VIX could barely manage to hold the 20 level, after briefly testing 23 a couple weeks ago. Low 20's are not high $VIX levels, regardless of the bearish (false) narrative Fast Money traders try to spin. 

If the $VIX could manage to trade into the 30's, like it used to... then we would be seeing far more effective shakeouts, followed by far more explosive market reversals (to the upside). 

Does this rally have legs? 

Fast Money Traders think it does... and since they seem to be the best contrarian indicators I'm watching, I want to take the opposite side of that trade.  

There are several gaps that were left behind on the chart, and it's likely that we see those backfilled sooner, rather than later.  

$SPX - fastest rally since July. Trend remains bearish  

I think we would see the market go back and build a base, before rallying into Thanksgiving.

Fast money is also bullish Gold miners, so watch for that sector to follow gold lower. 

 

Good luck, AA