Test & Reverse ?

The Wyckoff ‘spring’ position in biotech was identified correctly.

Two days later, SPBIO launches straight-up.

So, let’s take a look at what’s likely to happen next.

Going way back to 1931 and Wyckoff’s teachings and course material (still available here), he stated:

‘When an up-trend is decisively broken to the downside, more often than not, there’s some type of attempt to rally as a test of that break.’

We’ll use a Fibonacci 3-Day Closing chart of Biotech SPBIO, to see if Wyckoff’s timeless market insight still holds up in today’s world.

Biotech SPBIO 3-Day Close

Starting with an un-marked chart, first.

Putting in the notations with a zoom into the recent action.

Well, it looks like nothing has changed in the last 100-years because there it is. 🙂

Biotech broke down out of its trendline and bear flag of the past five months and has now come back to test that area.

Fundamentals

By this time, we all know the story on this sector. The fundamentals are nothing short of horrific.

Just in case there’s someone new to this site and they’ve not yet got the memo, we’ll add two more to ‘The List‘

Contentious COVID-19 Drugs Are All Anti-Malarial: May Not Be A Coincidence

UK Study Finds “No Evidence” Face Masks Protect Vulnerable Against COVID

As always, it’s the comments from the ‘ZeroHedge Guys’, that are more valuable than the article itself.

Strategy

For my corporate accounts, I’m already re-positioning short via LABD, starting during the last session (not advice, not a recommendation).

The initial entry has been quite small as this market could push a bit higher (lower for LABD) just because of momentum alone.

We see that in today’s pre-market session (LABD down about 2%).

It’s now about five minutes before the open.

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