It’s one hour before the close; biotech is hitting multiple technical flags simultaneously.

The weekly chart below, shows IBB retracing to Fibonacci 23.6% of its move from the July top.

Then it reversed.

Such a shallow 23.6%, retrace, where 38.2%, and 50%, are more common, indicates severe weakness. 

It’s a harbinger of lower prices ahead.

In today’s session, just minutes ago, IBB posted an outside down (key reversal) daily bar. 

So, we have a daily reversal within a larger, weekly reversal.

To make it technically correct for outside down, IBB would need to close below yesterday’s low of 127.99. So, we’ll see.

The short (not advice, not a recommendation) position via BIS, implemented by Three Ten Trading, has not changed.  In fact, the short position has been increased since the last post.

There’s been no major break in IBB, yet.  No air pockets, no negative news announcements.

As Livermore said a century ago (in 1923), ‘surprises happen in the direction of trend’.

The trend of IBB is down.

Let’s see what happens next.

Charts by StockCharts

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