Cat & Mouse

It’s rigged.  It’s been rigged from the beginning.

Back in the day, the father of technical analysis, Richard D. Wyckoff, called this sort of manipulation, the ‘composite operator’, or the ‘central mind’.

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If one could figure out what the big players were doing, there’s opportunity to position for profit.

That’s why tape reading was (and is) so important.  The moves and potential moves of the big players show up on the tape.

So, what’s happening with the cat and mouse chess game now?  Where should one look for potential profit?

A better question is not ‘what’s happening?’, but rather, ‘what’s not happening?

Until price action proves otherwise, what’s not happening is biotech (IBB) is not participating in the swift rally over the past month.

It stopped-dead right around May 13th.  That’s where to look.

While all others are focused on if/when the market’s going to new highs or crash, biotech looks like it’s under distribution.

Attempts to move higher are being sold off.  The market has stalled.

Things can change quickly.  Distribution can turn into accumulation if there’s a breakout to new highs.  However, at this point, price action is tight and (short position) risk is low.

 

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.
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