Beginning Of The End ?

Or … Just The End Of The Beginning ?

Maybe, it turns out that some people don’t want to be in the spotlight after all.

Click on the link.

See if your jaw doesn’t drop with how casually the interview discusses things we (the serfs) should not know.

That interview (at least the ‘tweet’) is from February, this year. So, maybe this is old news to some.

Even so, it’s just one of the many bricks in the wall for biotech.

With that said, let’s take a look at our chief cook and bottle washer: SPBIO

SPBIO (and inverse, LABD) Analysis:

The last update said that we expected SPBIO, to decline and LABD, to rise from current levels.

That’s exactly what happened.

As usual, we’ll start with the unmarked chart:

Obviously, biotech’s not moving higher.

At Friday’s close, it’s down – 28.4%, from the all time highs posted February, this year.

Market Insight:

The ‘tweet’ in the link above, is dated February 9th, 2021.

The all time high for biotech SPBIO, was the very same day: February 9th, 2021.

Remember, there are no coincidences.

Let’s mark up the daily chart; showing that Friday was an outside-down (key reversal) day.

The right-most area of the chart has been zoomed-in.

Higher high, lower low and lower close:

The next chart is where it gets interesting.

We’ve included a Fibonacci projection; going from all time highs to lows in May and then counter-trend high on June 28th:

It’s clear the 23.6%, projection level has been an axis line.

SPBIO, price action has oscillated about this area for months.

With Thursday’s ‘a-b-c’ corrective move and Friday’s outside-down reversal, that axis oscillation may be complete.

If SPBIO is to head lower from this point (which is expected), we’ll watch to see if price action ‘respects’ the Fibonacci projections; that is, will price action head lower to 38%, then 50%, and on?

Positioning:

Friday was a good day to be short via LABD (not advice, not a recommendation).

Biotech, is nowhere near all time highs. The sector is essentially running neck-and-neck with GDX, to the downside.

The expectation’s for SPBIO to head lower in the coming week.

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.

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