Multiple Scenarios, Going Forward
The ability to see multiple scenarios is like a Rorschach Test.
With each additional tick on the chart, it takes on a different character.
So, let’s look at what’s most likely, based on where we are now with one of, if not the weakest sectors; biotech SPBIO.
For reference, we’ll start with the big picture … the weekly chart to show the two-month long, bear flag.
Biotech SPBIO, Weekly
Next, is the daily for the past several months.
We’re at The Danger Point®; the test, where there’s not much distance between pass and fail.
Price action can (easily) go either way.
However, from a probability standpoint, we’ve been in a bear flag for months; the expectation is the test will pass, price action reverses and we get a downside breakout.
The hourly chart has the most likely potential outcome.
Pre-market action shows flat (as of 9:08 a.m., EST).
The chart has two likely scenarios: one pass, one fail.
A less likely outcome is a straight up launch above resistance.
However, anything can happen.
With the Fed out talking hawkish again, we’ll say it again; there is no ‘pivot’.
Whether or not the press is intentionally miss-directing the narrative, in a sense, does not matter.
We’re looking at the price action.
Right now, it says, we’re at a dangerous spot and may be about to pivot (pun intended) to the downside.
Not advice, not a recommendation.
No change since yesterday.
Short position in SPBIO via LABD; details are as follows:
Entry @ 18.72: Stop @ TBD
Note: Positions may be increased, decreased, entered, or exited at any time.
***, Indicates change
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