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I’ve mentioned my put position on XME. This morning, I took advantage of weakness earlier and sold my January puts so that I only have March now. I intend to double this March position in the near future. The reason is simple: I think this beast is heading much lower, but it moves with the speed of Oprah Winfrey at the 24th mile of a Marathon.
Let’s take a fresh, up-to-date look at the 1930/2020 analog. I have tinted what I see as the four analogous zones (1929 is on the bottom, the present day is at the top). As always, click on the image for a huge version. I think you’ll be inclined to agree………….the similarities are compelling.
I’ve been noticing a very interesting relationship between the consolidation that’s been going on the past couple of months and what we saw back in late 2019/early 2020.
The company American Axle & Manufacturing (ticker symbol AXL) has been a long-time favorite of mine. It has one of the most amazing analog patterns I’ve ever seen, and it has crafted a steady series of lower lows and lower highs over a period of years. It’s down hard today, and I suspect the downtrend has many months to come.
