Cash Crunch, Layoffs & Bankruptcy

So, here we are.

Crypto FTX implodes, Amazon to lay-off 10,000, Health system(s) in cash crunch, solar farm Toucan Energy, goes bankrupt.

But wait, it gets better; Pfizer and Moderna, are going to investigate themselves.

All of this, just within the past few days.

At this point, it should be clear to all paying attention, we’re accelerating to the downside … at least in economic terms.

Market Disconnect

Yet, the markets appear to never-mind … going about their (manipulated) business as if nothing’s happening.

Walmart has even announced they are going to buy-back their own stock to the tune of $20-Billion.

Maybe, they’ll do it. Maybe, they won’t.

They fully admit (in the press release), the buy-back announcement, was to make sure the earnings report was ‘well received’.

The Next ‘Shoe’

Those of us ‘awake’, are collectively attempting to plan and position for the next shoe to drop.

We’ve got the usual suspects such as real estate and biotech; however, this link to The Burning Platform, could provide more potential catalysts.

Either way, disconnected market or not, one has the feeling it’s just a matter of time.

Life After The ‘Short Squeeze’

‘The shorts were carried out on stretchers’.

Well, yes and no.

As said in this update, the historic short-squeeze, while damaging to account P/L, was a huge public service.

This chart confirms the majority of short-positions have evaporated. Meaning, the potential fuel for relentless upside (from those shorts), is no longer there.

That fact is being mirrored in price action as we speak.

As covered above, two markets are hanging by a thread: biotech and real estate.

Both are bubbles on a world-wide scale, but biotech is the one that may affect all others.

Biotech SPBIO, Inverse LABD

As this post was being created, biotech leveraged inverse fund LABD, has just printed (as of 12:40 p.m., EST) outside-up; also known as a ‘key reversal’.

The daily chart is below.

LABD, Daily

To make it an official outside up, price action will need to close above yesterday’s close (LABD: 17.87).

We’ve already shown that SPBIO, price action has formed a huge bear flag lasting more than eight weeks.

Action from the past three days can be considered a Wyckoff up-thrust as well.

Now, we have a potential key reversal.

If so, this market may be in serious downside trouble.

Positions: (courtesy only, not advice).

Yesterday, JDST-22-05, was exited at 9.0341, with a loss of – 1.45%, so that focus (and capital) could be directed to biotech, SPBIO and inverse LABD (not advice, not a recommendation).

LABD-22-10:

Entry @ 18.1398, 17.565***, 17.65***: Stop @ 16.29***

***, Indicates change

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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