Bid/Ask spreads on Biotech (IBB) indicate a lower open.

From last night’s update, this was the expectation if we’re in the early stages of reversal.

Empirical observation over many months shows IBB, tends to move counter-trend for the first 90-minutes of trade … then resumes its original direction.

If that holds true for today (and we’re in a reversal), expect IBB to open lower and then attempt a move higher during the first hour and a half; right up to about 10:30 a.m. to 11:00 a.m. EST.

Note:  That’s empirical observation; typical market action for IBB. 

However, each day is different and price action itself has the final say.

Both accounts being managed already have significant positions (BIS & LABD) with a BIS stop @ 24.64 and LABD stop @ 27.63 in the market (not advice, not a recommendation).

Following Livermore’s approach (get in big … and do it early) the plan is to monitor price action for another opportunity. 

If somehow there’s a higher open for IBB, then we’ll wait for a lower daily low (to increase position) or be stopped out … whichever comes first.

It’s still quiet in the markets.  No one expects a major reversal.  Retail is all in (although insiders are selling en masse).

There are fundamental reasons why biotech may be about to crack (big time) but those reasons are for another report.  Here’s a preview.

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.