Deep Dive: Biotech

Biotech Reversal

Downside Projections

Nuremberg 2.0

For what seems the longest time, a recurring focus of this site has been the biotech sector.

Specifically, the IBB (ETF) and SPBIO (Index).

There’s good reason for that. In this update, we’ll go deeper into the downside opportunity.

Biotech Reversal:

SPBIO, topped out on February 9th this year. The IBB (ETF) topped one day later.

Both went on to form a Quarterly reversal bar; indicating a long term change in character.

Of the two, SPBIO has showed more weakness having posted monthly lower lows for three successive months.

That relative weakness over the IBB index, has resulted in focusing on the inverse of SPBIO; specifically the 3X inverse, LABD.

Working with leveraged inverse funds is only profitable on a short-term basis or when the underlying index is in a persistent down-trend.

Otherwise, typical market chop results in value erosion of the inverse fund (not advice, not a recommendation).

For the reasons discussed in the last section below (Nuremburg 2.0), we’re anticipating the index to have a sustained and persistent drop to much lower levels.

Downside Projections:

Going way back to Reminiscences of a Stock Operator and the Wyckoff Stock Market Institute training materials, both in their own way indicated a speculative position was only entered if there was sufficient potential.

Livermore’s 10-points or more and Wyckoff’s cause and effect

In Wyckoff’s case, the ’cause’ was price action congestion built up in the P&F chart.

The ‘effect’ was the resulting move.

Which brings us to now:

Many times on this site, we’ve said biotech has built up congestion in a way, when it reverses and begins its decline, price action itself will create lower targets.

We’ll present two charts showing how that’s happening.

The first P&F chart in this update and provided below, has a projected downside target for IBB around, 116 – 120 area:

Note, the downside is not to scale as the real location is far below the noted area.

Biotech IBB, then went on to post lower action. That in turn has resulted in an updated downside target:

Once again, the downside is not to scale.

It’s apparent, as IBB heads lower, it successively builds lower targets and it’s only (potentially) just getting started.

The weekly chart of IBB below, spells it out:

If and when IBB price action gets to the initial targets, it enters a congestion area that will (by that time) be over seven years wide.

If the trend is still down, that congestion in turn would target even lower levels.

The “-80%” interestingly enough, comes from a quote by Steven Van Metre at this link.

That 80% drop also corresponds to a downside Fibonacci (not shown) projection of 423.6%, on the above chart.

Nuremberg 2.0

This phrase has become so ubiquitous you can do a search for it.

So far, not a single mainstream financial site or YouTuber (still on that platform) has mentioned this fact in their analysis.

The speck injections are mass genocide and intended as such.

Two recent events resulting from injections are here and here.

If all of a sudden, injected pilots can’t fly (the first link), how are goods going to be transported?

Not generally known to the public, commercial air-transport is also used to haul freight (while carrying passengers).

Exactly how all of this (world crime) will break is unknown.

If and when it does, the result in the biotech sector as well as equities in general, could be successive air-pockets all the way down.

Stay Tuned

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.

Gold, Dollar: In Tandem

Dollar Rally, Gold Rout

Markets Remain Inversely Correlated

First, let’s start with a review of the dollar reversal.

Back in early May, this report pointed at the possibility for a bullish set-up in the dollar.

That type of head’s up gives one time to investigate the correlations.

Correlations like, ‘is gold still inversely correlated to the dollar (and bonds)?’

Over the weeks as the set-up unfolds, confirmation or negation can be added by observing price action.

By the time we get the dollar penetrating support levels, we have gold at interim highs.

In fact on June 9th, the day the above ‘penetration’ report was posted, gold (GLD) had already reached its peak and was in a reversal.

Five days later (before the major down-move), this report was published on gold.

Therefore, at this juncture, we’re still inversely correlated.

So, what does that mean?

The updates on the dollar have proposed, since the bullish divergence (now turned rally) is on a longer, weekly time frame, the ensuing move could have the potential to carry the index UUP, to the top of the trading range shown here.

Then, what happens to gold?

If the negative correlation remains intact, gold gets whacked.

The weekly chart of GLD (above) has the index closing right at the Fibonacci 38.2%, projected level.

Wide bars tend to get tested. There could be some kind of rally in the coming week but it’s not required.

The Fibonacci projections highlighted as the orange bars, go all the way down to 161.8%. That’s equivalent to GLD at ~ 118.65, or the futures market somewhere around $1,300 – $1,350.

With the Dow 30, (DIA) penetrating and closing below the 336, support levels on Friday, we have a Dow Theory Sell Signal (not advice, not a recommendation).

The markets appear to be rolling over.

The last market reversal in February – March, of last year, had GLD dropping over – 14.5%, in two weeks.

Fast forward to now; GLD, is already down over – 15.2%, from its August 2020, highs.

Stay Tuned.

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.

Biotech: It’s a Set-Up

12:57 p.m., EST

‘Breakout or Set-Up’ has been resolved

Biotech IBB, posts new daily low.

Going back a few days, we had the chart above:

Price action then stalled, retraced, penetrated support (blue line).

Yesterday, it edged higher in a low-volume test. Today, it reversed again and has just now, posted a new daily low.

It’s high probability the set-up is complete:

The expectation is for biotech IBB (and SPBIO) to decline from here.

Measured move targets have already been discussed as well as Point & Figure targets.

Several times in these updates the word ‘collapse’ has been used to describe the potential for biotech.

The monthly chart below shows a Fibonacci projection based off current price action.

Note how projected levels match up with support and resistance areas:

Obvioulsy, this is a long term projection.

It may work out the short position in biotech via LABD, (not advice not a recommendation) will have to be exited and re-entered several or many times if/when the sector heads for the bottom.

Stay Tuned

Bonus:

The hourly chart of IBB below, shows Wednesday’s price action touching, then bouncing off the first Fibonacci projection.

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.

Update: Dow Theory, ‘Sell’

9:05 a.m., EST

Dow 30 (DIA) breaks trendline

Price action declining towards support

Price action rolls over and in the process, breaks the uptrend.

The prior update, had this link to an explanation of the sell signal (not advice, not a recommendation).

The sell signal is confirmed if/when the support at the dashed line is penetrated with a close below that line.

Summary:

The markets were volatile yesterday with sharp moves in the dollar, gold and the gold miners.

Pre-market action has gold (GLD), continuing sharply lower; – 4.1 points, or – 2.37%.

Inverse GDX, gold miners DUST, is trading higher as well; up about + 1.1 points, or + 6.65%.

For those monitoring this site on a regular basis, none of the above is a surprise.

We’ve been reporting on the pending dollar reversal for weeks; how gold (and silver) still appear to be inversely correlated.

Stay Tuned

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.

Biotech & Fibonacci Time

8:39 a.m., EST

SPBIO, pivots at Fibonacci Day 89

LABD inverse fund (3X inverse SPBIO), marked with time pivots and potential channel.

The plus or minus one-day on the Fibonacci counts, is well within acceptable limits.

There’s been so much focus on biotech because of the opportunity.

Trading congestion equals directional potential.

A good way to show that (downside) potential, is with the P&F chart of biotech IBB, below:

The initial projection targets the 120-area which is below the support levels at, 143 – 145. If penetrated, those support levels would likely become resistance to any upward retrace.

We’re about an hour to go before the regular open. LABD is trading flat to slightly higher.

Stay Tuned

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.

Gold Channel … Down

10:47 a.m., EST

Contact points confirm channel

Gold (GLD) heading lower

The two hits on the right side channel line provide confirmation of the trend.

An expanded version of the daily is below:

So far, we’ve had the blockage of the Suez Canal. Auto parts being sent to the bottom of the ocean off Japan. ‘Mysterious’ grain silo fires destroying harvested crops.

But wait, there’s more. This just in:

A fire has destroyed the largest grease plant in the U.S.

If transportation is shut down as a result of cyber attack, fuel pipelines off-line, no grease to lubricate the wheels or any number of other (planned … and don’t think there’re not) events, the last thing that’s going to help get anyone through, is a ‘stack’ of inedible metal.

It’s no secret this site’s been using the Biblical precedent of Genesis 41.

That is: Grain and Corn come first … then gold and silver.

The ‘stacking’ public has got this message reversed. Of course, this is not advice or a recommendation.

However, for those that can see, it’s so obvious the goal is ‘controlled demolition’ of the supply chain. All of it.

We’ll put everything back to ‘normal’ if you just get injected.

Meanwhile, biotech IBB, and SPBIO, have both posted a new daily low.

IBB is poised to penetrate the resistance area identified in this update, and come back to test the wide bar.

If that happens, we have a Wyckoff up-thrust in play. More analysis of biotech to follow.

Stay Tuned

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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.

Moderna “Throw-Over”

11:35 a.m., EST

Price action posts new weekly low

Now, back into the (wedge) range

In a situation that’s straight out of any typical trading text: ‘When a market goes into a throw-over and then enters back into the range, it’s a classical analysis sell signal’ (not advice, not a recommendation).

That’s where Moderna (MRNA) is now.

Moderna’s the ‘chief cook and bottle washer‘ for the world-wide kabuki theater. So, we’re using it as a proxy for the biotech sector as a whole.

Separately, biotech index IBB, is retracing but has not posted a new daily low.

Inverse SPBIO fund LABD, has formed an hourly reversal bar and looks to be forming a daily reversal bar. As of this update, it has yet to post a new daily high.

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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.

Dow Theory Sell & Gold

9:23 a.m., EST

Dow Theory; Sell signal nears

Gold, in Wyckoff ‘Up-Thrust’ reversal

Even though the current environment is anything but traditional, the report at this link shows how close the market is to a Dow Theory sell signal.

It could be. Even with valuations and markets at never before seen extremes, the traditional theory will still hold.

Wyckoff analysis, developed during the same time as Dow (published in 1910), does not concern itself with ‘valuations’.

That’s the key

Wyckoff discovered early on, that ‘markets have an energy of their own’.

This ‘energy’ has nothing to do with valuations.

Gold (GLD) has been discussed several times over the past few weeks; that it has stalled and in potential reversal.

The weekly chart shows the blue line resistance area. Price action has struggled at this location for weeks.

Now, with the market about to open, GLD is trading down a solid -2.5 points, or – 1.4%.

If that level is held to the open, it puts GLD below the June 3rd (weekly) low and below the resistance area.

With all the inflation, and hyperinflation talk, GLD has not made it to new highs.

Last week, the dollar reversal was confirmed with UUP posting a new weekly high. At the same time, weekly MACD confirmed its bullish divergence.

The stage appears to be set for some kind of surprise; in the markets, the dollar and gold.

Stay Tuned

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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.

Random Notes

The usual suspects for the week.

No. 1

Succession Planning

Note: This source (linked) has not been vetted. However, it could be one of many to come; therefore, it’s included in the list.

One more brick in the wall showing major corporations all on the same script.

A script like ‘we’re all in this together’ popping up instantly nationwide. Now, we have those same entities planning to replace all those who have been injected.

No, it’s not the ones who have refused but those who willingly lined up (in most cases except children) to limit, or eliminate their lifespan.

Just in case the first link may not have the right pedigree, here’s one showing that Goldman Sachs wants to know your ‘status’.

The mainstream paints it as working to ‘be safe’ (and get injected).

It really may be to identify who needs to be replaced.

No. 2

Lumber Crash, Economy Next?

That was the update for June 5th. Now, we have the mainstream report.

Hidden within the article is a miss-statement or outright lie:

“With that being said, when you think about the amount of housing we’re going to have to build in the U.S. over the next three, five, 10 years, that’s a significant amount of demand for wood products.”

Sorry … anybody with two studs rubbing together knows there’ll be no lumber demand … except for coffins … but then again, FEMA got that worked out years ago.

No. 3

Food Supply Controlled Demolition

Ice Age Farmer bats-a-thousand as he puts out two reports here and here discussing the latest salvo in food supply destruction.

He’s been on the forefront; politely admonishing his viewers to get going with their own food production.

Anyone who’s done so in a serious way realizes quickly, there’s a big learning curve to get a private garden up to maximum production.

It takes years as the first harvest needs to produce seeds acclimated to the local region. After that, they come up like weeds.

Logically then, one needs enough stored food to last for one year.

What’s in your pantry?

No. 4

Take heed that ye be not deceived

Even though this link contains a presentation on what may be truth, the poster Rogersings NWO News! , notes correctly (in his comments below the post) there’s something wrong.

To put it succinctly:

I am the way, the truth and the life …

From this site’s perspective (The Danger Point), the presentation above allows these two (Madej and Stone), to be crossed off the list of truth sources.

Just listen to the new age lingo. What a load of bollocks.

Enough said.

No. 5

Clown Show at The G7

A world of illusion.

Is the ‘elbow bump’ just a new version of this salute?

No. 6

Priced Out of The Market

Jerimiah Babe presents (time stamp 5:38) that this firm, article linked here, has decided to take the money and run.

The middle class is priced-out for now. However, if the U.S. population craters over the next three years, won’t the joke be on them?

No. 7

It’s Tough Being An Idiot

First, they tell me I can’t travel unless I get injected.

Of course, I ‘follow the rules’ and do the right thing; get myself injected.

Now, they tell me I can’t travel because I’ve been injected.

Personal anecdote (skip to No. 8, if not interested)

Way back, right about the time Mask on, Mask off, was posted, I had a conversation with the Janitor at the local home improvement store.

Just to be clear, restrooms at these outfits are some of the most disgusting I’ve ever seen; Worse than your typical Allsup’s gas station on Hwy 287, heading to Amarillo.

This guy was South American and had lived in Brazil. During our conversation, he proceeded to tell me the ‘speck’ was a hoax. He said it was just like the propaganda being pumped out down there before elections.

His comments were additional confirmation of my own research.

The point here, he’s not ‘educated’.

He works for minimum wage, cleans up never ending human excrement from the floor and yet, he’s awake to the lies and deception.

At the same store, you can find a middle-aged ‘lot loader’ gathering shopping carts in the parking lot.

Talking with him about current events has him quoting Revelation.

So what gives?

I’ve heard one presenter (Amazing Polly, if memory serves) say that ‘stupidity is a choice’.

It’s uncomfortable to recognize and act on truth. It’s much easier to stay in the crowd where we’re all safely injected.

Therefore, our rule following traveler above chooses stupidity rather than the raw edge of reality; that reality is, nothing … absolutely nothing, is ‘safe’.

In their intentionally compromised mind, they’ve convinced themselves they’re doing the ‘right thing‘.

So be it:

The difference is, they have to stay home now as they’re not allowed to travel anymore.

No. 8

Color Blind

Two moms are filmed testifying in front of school boards.

The links are here and here.

One topic is more intense than the other; taking that part into account and closing your eyes, you will not be able to tell which one of the mom’s is black.

Just from watching, you can tell they both have character and courage. They are well spoken and educated.

Those are the exact things ‘the world‘ seeks to destroy.

Stay Tuned

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.

Moderna: Reversal Review

‘Reversal at hand’ said the prior update

Reversal still imminent?

MRNA has pushed above resistance on declining volume (shown above) . The next chart has MRNA in a terminating wedge pattern:

Price action this past week has just contacted the top portion of the wedge.

MRNA is the fifth-largest cap equity in the IBB index. Its market moves have a definite effect on that index.

IBB, shown below:

On Friday, the market eased back a little. Will it come back to test the resistance area next week?

There’s no doubt about the wide high volume bar. That day (last Monday) posted the highest daily volume in four years.

Wide high-volume areas are usually tested.

It just so happens, that wide area is below resistance.

To test the wide bar, price action would need to move below the resistance area. Doing so, would put a Wyckoff ‘up-thrust’ into play.

The next chart shows another resistance area not easily discernable:

Although somewhat hidden, there’s another resistance level that for now is putting a limit on the upward travel of IBB.

Summary:

MRNA’s at an extreme. The previous update linked to a site which shows insiders bailing out in the tens-of-millions of dollars.

The bond market, with its upside breakout is not confirming the ‘recovery’ narrative.

The dollar is reversing as well.

Gold and the miners have stalled; potentially reversing.

The narrative is shifting as the media (all controlled don’t forget) has decided on its sacrificial, e-mail lamb.

Don’t worry, nobody’s going to jail. It will just be another distraction to keep the mask wearing masses from getting prepared for the fall.

As a reminder, this is how they think; ‘Just doing the right thing’ Almost like ‘Just following orders’.

Stay Tuned

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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.