The ‘Santa Claus’ Rally

That Was it!

It’s going to be a very different place come December.

This won’t be like ’08 -’09, where all the stops are being pulled to ‘rescue’ the market.

No, this time really is different.

We can all see by now; the plan is controlled demolition.

Paraphrasing Jerimiah Babe, and Pinball Preparedness, we haven’t even got started (with the collapse) and the public’s already folding up.

What’s it going to be like when it really hits?

This past week, all the major indices have gone through some type of relief rally. Call it a Santa Claus rally because there probably won’t be one this December.

Trading Consistency

Throughout this upward correction, the case has been made over and again, only biotech SPBIO’s in a technical (and fundamental) condition that would allow it to decline farthest and fastest (not advice, not a recommendation).

Wyckoff analysis along with Livermore’s strategic approach that’s coupled with Loeb’s ‘focus’, has led us to (shorting) this sector exclusively.

Strategy, Tactics, Focus

Biotech SPBIO, Weekly Close

Looking at the far-right side of the chart, SPBIO rallied this past week. It looks like it may head higher … that is, until we put in the trend-lines.

Now, let’s put in the trendlines.

Extended trendlines show the downside potential.

We’re about to see how this works out.

Friday’s upward action in SPBIO slowed with inverse LABD, posting narrow (downside) action as well.

Ready to reverse.

Summary

Trading action in the past week amounted to reducing the position size in LABD-22-05, by about 4.6% (not advice, not a recommendation).

If and when SPBIO continues is downward trajectory, that position (shorting via LABD) will again be increased as the market allows.

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.

The Danger Point®, trade mark: No. 6,505,279

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