Friday: After the close

Two markets being watched at this time are biotech (IBB) and natural gas (UNG).

Today’s session in nat-gas was strong but on the downside, price action closed below last week’s high.

There’s a lot going on with the hurricane in the gulf; potential earthquakes (threatening to rupture lines), already happening in the New Madrid zone.

So nat-gas could literally explode at any time. 

We’ve analyzed price action enough to show a reversal underway.

The downside; it’s a bit weaker than expected. At least at these initial stages.  However, commodity markets tend to start slow and then build into a blow-off top. 

So, we could still see intense action during November and December.

Next, is biotech and specifically IBB.

The chart below is an interesting picture.  Price up and volume down.  This type of scenario has one of two meanings:

No. 1:  There is no commitment to the upside and reversal is imminent

No. 2:  Volume has decreased as sellers are backing away from the market … prices may drift higher.

With the negative report from Amgen (AMGN) during the week, the bloom may be off.  Amgen is the leader (market cap) of the sector.  If it has reversed as has been proposed several times, it may be strategic and long term.

The chart wedge that had been discussed here and here has now been officially and decisively penetrated to the downside.

Barring some miraculous recovery, the measured move for AMGN is in the vicinity of 192; about 20% down from current levels.

Charts by StockCharts

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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