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 of this situation can’t be over emphasized.
Not only do market levels and depth of penetration need to be watched but also the time; time spent pushing higher or lower.
Biotech SPBIO, indeed moved higher and penetrated our previously stated 6,384.50 level; here’s the important part: As of now (11:34 a.m., EST), it’s struggling to hold that level.
Looking at leveraged inverse fund LABD, on a 30-minute basis, the market itself is showing, each successive thrust lower (higher for SPBIO), spends less and less time at the new level.
Like a drowning swimmer coming up for less air each time.
The market (SPBIO) may get itself together and somehow continue higher.
However, at this point, we’ve got a hard stop; this morning’s LABD low, of 20.90 (not advice, not a recommendation).
SPBIO, Leveraged Inverse Fund LABD: 30-minutes
Today’s close is likely to be important.
A failure to push lower for LABD, may indicate “we’re done” and now ready for a decisive reversal.
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.
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.
“As the economy (if you can call it that) falls off the cliff, one of these two (KMX, CVNA), is not likely to survive.”
It looks like Carvana is swirling down its ‘disruptive’ vending machine wormhole, leaving CarMax to pick up whatever’s left of the car ‘consumer’.
The latest earnings release of KMX, confirms what’s left of the typical consumer’s purchasing power, is evaporating if not completely gone.
Still Clueless …
It’s not necessarily the linked earnings report on KMX that’s important, but the comments.
We’ll not call out any specific one but after reading them, there’s an uneasy sense, the typical American is still wandering around in a type of hypnotic, delusional state, namely, mass psychosis.
They’re stunned … ‘looking for the bottom’.
Everyone has their own timeframe but let’s see where an ultimate bottom for KMX, might be on the charts below.
CarMax, KMX, Yearly Chart
The big … big picture
There are three-months left in the year but already the thrust energy lower (magenta arrow) for KMX, is the highest in nearly 26-years of data presented.
Not even the ’08 – ’09, meltdown had downside energy anywhere close to what’s happening now.
That’s a clue in itself, we’ve got a long way to go.
How long, is long?
The quarterly chart of KMX gives us a clue where we might see a ‘bottom’.
CarMax, KMX, Quarterly Chart
Above, we’ve got a terminating wedge (blue lines) that’s been decades in the making.
As the magenta arrow shows, there could be small blip up to resistance in the 85-area before potentially rolling over into a descent that projects to the 4.00, level.
If and when that happens, CarMax rival Carvana, may be long gone; its disruptive vending machines possibly being used as homeless shelters or insect farms.
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.
Every market has its own characteristics; patterns that repeat.
Biotech (SPBIO) is no different.
Based on its own repeating fractal characteristics, probabilities continue to point to the downside; but first, the ‘reset’.
Out Again, In Again
Everyone has their own style, risk, and pain tolerance.
What’s presented on these posts is NOT financial advice.
It is however, how one professional is approaching, managing, and positioning in what may go down in history as the largest financial, societal, and political collapse ever.
Let’s not lose sight of that ‘macro’ condition.
It’s difficult to grasp the enormity. The ‘pundits’ are already looking for a ‘bottom‘; a bottom that in reality, is probably years if not decades away.
This past Friday, saw a complete exit of the short position LABD-22-05 & TDA-LABD-22-02 (not advice, not a recommendation).
As we’ll see below, once SPBIO, price action showed itself to be failing its up-move and subsequently reversing to the downside, the short was re-established: LABD-22-06.
In effect, the entire short trade was ‘reset’.
At the close, LABD-22-06, was well in the green.
By the way, After The Close … was released just before 6:00 p.m. EST, yesterday. That gave anyone who wanted, a two-hour window to position in the after-hours market (not advice, not a recommendation).
Now, on to the fractals.
Biotech SPBIO, Weekly
We’ll go straight to the marked-up weekly.
The Fibonacci retrace tool shows SPBIO, dipped down to 61.8%, before rebounding higher; a deep retrace, indicating overall upside weakness.
The zoom version below shows the detail of price action rebounding off the 61.8%, then going straight to 38.2% before backing-off.
Here’s The Fractal Part (below)
Getting closer-in on this past week’s action, we’ll use an hourly chart.
It shows the closing low on Monday, the rebound from Tuesday through Wednesday, the retrace on Thursday and the Up-Thrust on Friday.
SPBIO, Hourly
And with zoom.
Once again, during the retrace, price action went to the 61.8%, level just like it did on the weekly.
Characteristics repeating on multiple time frames.
Deep retrace typically indicates overall weakness.
Test, Fail, or Not
This coming Monday, anything can happen.
Price action can come back to the up-thrust and then reverse lower: Test.
It can come up and penetrate the up-thrust, moving decisively higher: Fail
It can gap-lower, move lower, never look back: Not.
The Danger Point®
That’s where we are now.
If price action moves decisively higher and penetrates Friday’s high, it then precipitates an exit of the LABD position.
The other two scenarios, indicate maintaining the position; adding to the size as the market allows (not advice, not a recommendation).
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.
Most important of all in trading, are the failed moves.
Failed moves offer the potential for low-risk entry.
What originally appeared to be a strong launch higher that may have taken SPBIO to a 50% retrace, failed at 38%.
The sector closed up for the day but far below its session high.
Biotech SPBIO, Daily
Price action closed well below the resistance area.
Zoom version below shows slight new daily high (mini-up-thrust) before retracing lower.
The technical details of what is going in will be covered over the weekend.
However, from a positioning standpoint, the short was re-established (via LABD) as it was obvious the move higher was failing (not advice, not a recommendation).
The new short position is labeled LABD-22-06, with an initial entry of LABD, 22.12.
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.
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.
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.
That’s what the ‘analyst’ at this link has to say.
If you know your market history, ‘opinions’ like that were pushed out all the way down to the bottom after the crash of 1929.
As for me, I’m going with the 78-year-old money manager that was quoted saying (paraphrasing):
‘It’s the biggest bear market of my life.’
Back to the analyst above, another opinion could be (looking at price action), we’re not in the ‘final stages’ of anything … except maybe the beginning.
Before we leave the topic, IYR real estate closed at 103.84, when the ‘old-timer’ spoke. Yesterday’s close was 81.43, down -22%, from that level and down – 30.3%, from all-time highs … and counting.
The ‘final stages’ of this decline is (potentially) years, if not decades away.
Biotech Decision Point
With about twenty-minutes before the open, biotech SPBIO, is set higher with leveraged inverse (pre-market) LABD, down approximately – 1.6-pts. (-6.3%).
We’re at a decision point for the sector.
Looking at the chart of inverse LABD below, a trend (and potential trading channel) is clear.
This morning’s gap-lower open is set to test that trend.
SPBIO, Leveraged Inverse LABD, Daily
If biotech remains in its downtrend that started at the August 11th, high of 7,399.86, expectations are for some kind of upside LABD, reversal within the first hour of trade.
If not, price action then opens the door for a move above established resistance at SPBIO, between 7,400 and 7,700.
As unbelievable as that would be, it could still happen.
Summary
The first hour of trade will be watched closely.
Price action itself will define if SPBIO, has fished its down move or if we’re just confirming the trend already established.
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.
Know what’s happening now; then plan for what’s likely to happen.
There could be only a small window of opportunity to acquire needed items (at a deep discount) to whether a sustained level of social, financial, and infrastructure chaos.
It’s no secret the clothing retailers are, and have been offering product at heavily reduced prices.
What about the really important stuff?
Stuff like tools, generators, chest freezers and ‘protection’.
Home Depot (HD) Weekly
We’ll get straight to the analysis; showing HD may be forming an H&S pattern, about to break below the neckline.
If HD breaks lower in the vicinity shown (may or may not happen), expectations are for a measured move to the area somewhere around $160-ish.
A drop like that represents a decline of about – 62%, from all-time highs; plenty of motivation for herd following ‘corporate executives’.
That would be the time and the location to expect those executives to throw in the towel and offer product (the good stuff) at a deep discount.
The ‘Experiment’
If there’s another market leg lower, it’s likely to be chaos.
Banks may restrict access; credit cards may not work, and nobody will want to part with actual physical cash; likely to be in short supply.
With that in mind, a product has been picked from a Home Deport nearby that would definitely be of use in a grid-down, social chaos situation.
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® 