In Brief
At this point in time, the main components for biotech IBB, are listed here.
Note that ‘chief cook and bottle washer’ Moderna, is No. 5, on that list.
IBB’s closing price action shows a repeating set-up.
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The Danger Point®, trade mark: No. 6,505,279
The Final Kibosh
Exxon, may be in the process of a commodity style ‘blow off’ move.
What the chart appears to be telling us, oil (and gasoline) prices are going higher, much higher (not advice, not a recommendation).
That’s at least before they go lower, in a (potential) demand destruction, depression level event.
Exxon XOM, Weekly
If XOM, follows its current trajectory, measured move levels would be reached right about the end of this year (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Testing The Test, Complete?
Before we get to the chart, let’s start with this from ZeroHedge:
US Pending Home Sales Collapse To Record Lows In September, link here.
Next, we’ll paraphrase a comment.
Note: If you want to see the direct quote, it’s the first one in the article:
‘The reason real estate is not selling is because of doubt. Doubt about the economy, war, the country and whether ‘normal’ will ever come back‘.
Well, we have news, ‘normal’ is not coming back.
We’re in a new paradigm.
With that, let’s remind ourselves on ‘why’ ABNB launched higher this past August 7th, link here.
The link is of interest, as it tells us the ‘official’ narrative.
Now, looking at what price action is actually doing.
Airbnb ABNB, Daily Close
The last update on ABNB, was here, where it said, price action is likely in an upside test.
At this point, we may have the beginnings of a reversal (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Energy Dissipates
Today was supposed to be downside continuation if the trading channel was to remain in effect.
It didn’t happen
As the downside energy appeared to dissipate during the session, short trade SOXS-26-14, was closed with profit at +15.14% (not advice, not a recommendation).
The blue arrow shows Force Index losing steam to the downside.
The magenta arrow shows price action pushing through the trading channel.
Of course, more selling can come in late Sunday and into the Monday open.
However, at this juncture, a retrace to 38%, (and gap-fill) seems more probable (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Successive Gaps
The SOXX, posting a series of gaps lower.
At this point, it does not look like they’ll be filled anytime soon.
One can never be certain; nearly five months after AutoZone created a massive gap, it’s being filled as we speak (not advice, not a recommendation).
The channel lines on the chart are drawn to capture the majority of the price action.
If this is the ‘correct’ channel, yesterday’s price action was an attempt to push out that was quickly negated.
We’ve seen this type of ‘push-n-back’ market behavior before, in biotech XBI, link here.
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The Danger Point®, trade mark: No. 6,505,279
Takes The SOXX, With It
‘Surprises, tend to come in the direction of trend’.
The tenet, taken from Reminiscences of a Stock Operator, showing us the direction of trend for LRCX and the overall semiconductor index, is lower (not advice, not a recommendation).
In the after-hours, LRCX is down hard and the SOXX has taken a hit as well.
So, let’s look at what the SOXX is telling us.
Semiconductor SOXX, Daily Close
For about ten trading days, the SOXX moved steadily lower along the ‘demand’ line shown.
Then, it paused for several days with sideways, corrective action.
Now, with the index likely to open lower, next session, the question is, are we at the ‘supply’ side?
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The Danger Point®, trade mark: No. 6,505,279
All-Time-Highs
For a Fibonacci five days, AAPL has struggled to push past existing resistance at the all-time highs.
Todays’ close was below that five-day range and the after-hours, is trading lower-still (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Observing Market Action
CarMax, is posting a series of parallel trading channels with inflection points identified (so far) by a Fibonacci count (not advice, not a recommendation).
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The Danger Point®, trade mark: No. 6,505,279
Testing The Test
Yesterday’s update showed how Airbnb tested its wide, high-volume breakout with its own wide, high-volume downside.
That move culminated on September 23rd, which in turn, set up a test of those high-volume bars.
All of this action brings us to now.
The chart below, is a 2-Day Close of ABNB, going back to late 2021.
Airbnb ABNB, 2-Day Close
At the right side, we’re using Wyckoff terminology of ‘Up-Thrust’, ‘Sign of Supply’ and ‘Test’.
The up-thrust action penetrated long standing resistance at the far left. Then, reversed lower with what can be called ‘ease of movement’.
Now, we’ve come back up to test the up-thrust area.
Going Nowhere, Fast
It’s true that ABNB has oscillated in a wide range that’s over 100% from lows to highs.
However, there’s been no sustained long-term breakout to the upside.
With that said, ABNB has been posting (since 2020) sideways action.
In Wall St. parlance, a sideways market, is a bear market (not advice, not a recommendation).
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Charts by StockCharts, TC2000
The Danger Point®, trade mark: No. 6,505,279
Wide, High-Volume Bar(s)
Nearly twenty years ago, David Weis said in his training video:
‘Wide, high-volume bars, tend to be tested’
Now, twenty years later, we see that exact thing happening with Airbnb.
On August 7th, this year, ABNB launched 17.43%, with twice normal volume after an earnings release; links here and here.
So, we have a ‘wide, high-volume bar’.
What’s most likely to happen next?
Airbnb ABNB, Daily
What’s most likely, is the wide bar gets tested.
If we know that wide bars tend to get tested, then trades can be planned accordingly (not advice, not a recommendation).
After the launch phase and during the reversal, ABNB was traded profitably to the downside: ABNB-26-06, and ABNB-26-07.
With that said, what happens next, or what’s likely to happen?
We’ll cover that, in tomorrow’s update.
Stay Tuned
Charts by StockCharts, TC2000
The Danger Point®, trade mark: No. 6,505,279
