When we last left biotech XBI, a push higher into a potential stop-zone was expected, link here.
‘The tape is always right’ as they say, and price action, somewhat unexpectedly, blew past those stop levels.
At this point (12:27 p.m., EST) we’re nearing the 50% retrace on the XBI. That level is somewhere around XBI, 92.28-ish. Currently XBI is trading at 90.12, about 2-points away.
We’ll do a little experiment with the weekly chart by inverting it to show the longer-term view.
Biotech XBI, Weekly (inverted)
Note the MACD lines are still crossed to the upside.
One way to look at the action is that we’re in a test of the spring set-up (up-thrust, non-inverted).
The retrace to the 50% level may have already happened with last Friday’s action.
However, it’s just a sneaky suspicion, XBI may try to inch itself past the daily highs of April 9th, and April 11th (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.
Just like the Nat-Gas reversal, which is now on-going, Life Insurance may be the biggest downside sleeper of all (not advice, not a recommendation).
Searching the YouTube vortex, turns up this, on the largest cap of the sector; Met Life, MET (time stamp 2:27).
It’s the usual suspects. Another (almost) knee-jerk, ‘buy-the-dip’.
Let’s take a look at what’s really happening with Life Insurance, looking at the long-term view.
Life Insurance Sector, Weekly Close
The last major melt-down during ’07 – ’09, had the index collapse over 76%
Moving to the topping action highlighted in the zoom area, we have the following:
Then, on to the largest cap in the sector, our chief cook and bottle washer, Met Life (MET), there’s this:
We may find out as early as next session, if MET is in a downtrend or spring position, ready to move higher (not advice, not a recommendation)
The chart nuance advocating against a viable spring is the reduced upside volume on Friday when compared to a day earlier; up volume contracts 46%, when compared to downside volume on Thursday.
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.
As former floor trader Richie Naso says, ‘You have to think like a criminal’ (time stamp 10:50).
Using his example, a market-maker executes orders ‘to create liquidity’; where on the chart of biotech XBI (below), would that bundle of ‘order’ liquidity exist?
Biotech XBI, Daily
The purple oval shows where there’s a potential of congregated ‘stops’.
Also note, the MACD cross.
This trigger signal is on the Daily MACD, only as the weekly shows longer term momentum continues lower (not advice, not a recommendation).
At this juncture, XBI has broken out of previous trend channels and so, we have a new construct.
Positioning
Presently, I have no open positions in biotech (not advice, not a recommendation).
Back in the day, I would likely be holding short, placing my stops exactly at the location of the purple oval.
Let’s see if the market searches out my old stop location that if hit, would have taken me out of position (via LABD) right in time for a potential reversal to the downside. 🙂
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.
If there’s one market attracting huge numbers of grifters, carpetbaggers, peddlers, and all-around crazies, it’s precious metals.
I’ve been hearing from this crowd, ‘the government’s going to collapse, the dollar’s going to collapse’, since the early 1980s.
As said many times before, I like precious metals as much as the next guy.
However, from a strategy standpoint, with each passing day, we see it’s the food supply (here, and here) that comes first (not advice, not a recommendation).
What’s currently taking place is so much more complicated (in my opinion) than just ‘stacking’.
Let’s not forget the flood of ‘fake’ or ‘diluted‘ precious metals and other chicanery; like having your coin-shop bank account closed for no apparent reason.
Well, we have to keep the loonies on the path which brings us to our case in point, Newmont Mining, NEM.
Newmont, Good News is Bad News
Gold price has moved higher over the past four to five months and expectedly, that’s been noted in Newmont’s latest Quarterly release, link here.
NEM, stock price at ‘nine-month highs’, what’s not to like?
It’s when we look at the chart, we see a different story.
Newmont Mining, NEM, Weekly
After all the ‘good news’, NEM has only retraced an anemic 23.6%, of its overall downside move.
Note the close on Friday was right at the 23.6% level, giving it even more significance.
This level has also become an ‘axis line’ as exhibited by price action going back to August of 2022.
By The Numbers
When looking through the major sectors, retrace (and reversal) from 23.6%, is becoming more frequent.
Two other indices posting and reversing from that level (measured from recent highs), are biotech XBI, and real estate, IYR.
NEM, What’s Next?
Thursday, 4/25, was a wide bar with heavy volume.
We’ve stopped at the retrace, which is also resistance, confirmed by price action in late December. ’23.
A reasonable expectation is NEM, retraces, testing the wide bar and volume before continuing to the downside or moving back higher to a breakout (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.
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.
How do you know if it’s a countertrend move, or an outright reversal?
Do you stay with the trade or, as Dr. Elder said, ‘do you just take the money and run?’
For biotech XBI, it’s been a nasty two days of upside for any short positions, but the real question is, are we there yet?
Looking at the charts below, you’ll have to decide for yourself.
However, from my perspective, it’s possible that ‘today is the day’; meaning, we may be at the top of the correction (not advice, not a recommendation).
Biotech XBI, Daily
The chart is self-explanatory.
From the day a ‘change of character’ was identified to last Friday’s low, is a Fibonacci 21 days.
From that low to today, is a Fibonacci 3 Days.
We’ll compress the chart scale for a bigger picture view of the current action.
Also included is the grey centerline, showing the channel has a symmetrical ‘look’.
Also note, we’re at a 23.6%, retrace at the day’s high (thus far) and price action appears to be eroding downward.
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.
When’s the last time you saw a P&F chart on any (other) website or YouTube, channel?
My guess … probably a long time ago, or never.
Even StockCharts, recently revamped their site, removing the landing page option for P&F. It’s still there, but you have to search to find it under ‘more tools’.
If we’re going to be using Wyckoff analysis to determine the most probable direction for the market (and how far it could go), then P&F analysis is part of that effort.
For our biotech example, XBI, we’ve used two projection methods to see where price action is likely to go if we have a sustainable downturn in progress.
Biotech XBI, 3-Point P&F
As a reminder, ‘3-Point’ means before an ‘X’ or ‘O’ is charted (for reversal), the index must move at least 3-points.
Based on the P&F action itself, we have a projection range (not advice, not a recommendation).
Now, comes the interesting part, Fibonacci projections.
Biotech XBI, 8-Day, w/Fibonacci
The Fibonacci projections are shown as the blue lines.
The P&F projections from the chart above, are overlaid as the magenta lines.
Of course, projections do not guarantee anything.
At the next open, XBI could launch itself into a upside reversal; not likely, but it could happen.
Wyckoff Cause & Effect
What we’re doing here, is adhering to Wyckoff discipline from his stock market course material (still available here).
No position, long or short is entered unless there is sufficient cause i.e., P&F count for a sustained move.
Note: I have no affiliation with the Stock Market Insitute and do not receive any compensation from them.
In the case of biotech XBI, above, it literally has spent years generating a P&F count; the ’cause’.
The ‘effect’, is the actual move; now potentially in progress.
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.
Before we get started, recognize there’s a huge public service available with the (media, YouTubers, et al.) discussion on potential gold, silver, rally ‘to the moon’.
Now that Nvidia (NVDA) has posted a reversal, it’s likely the bull market, if not completely over, is seriously damaged.
As Ed Dowd, former BlackRock fund manager suggested, (link here), when the market turns lower, everything’s likely to head down … everything; at least, initially.
The public service: We get to see (in real time) which analysis method is best suited to determine the truth of what’s really happening.
With that, let’s move on to the chart.
Silver SLV, Tracking ETF, Weekly
If this is an initial thrust to move higher, it’s losing energy; narrow range (weekly) bar with volume contracting.
If we’re in an up-thrust about, to reverse lower or consolidate, this is the type of market behavior to expect (not advice, not a recommendation).
Delusional In … Delusional Out
Like the Artificial Intelligence (AI) delusion, hyped-up beyond all conceivable expectations, it takes a while to deflate.
This past Friday may have been the start.
So too, it could be with precious metals.
If indeed, this time is different, and were in a sustained, long term (years-long) rally for silver (SLV), then look for the character of the price action to change.
One potential example of that would be, successive gaps higher of $5/oz., $10/oz., or more.
A real bull market breakout (like the S&P in 1995), does not let you get aboard comfortably.
Note: That breakout in ’95, was a complete shock to the typical market watcher.
The S&P had oscillated in a trading range for a year before launching decidedly higher in early ’95. In that sense, the breakout is/was the complete opposite of the ‘long awaited’ (potential) bull run in precious metals.
The Mood Has Shifted
Anecdotally, the mood appears to have shifted.
If we’ve just past the top in the market (S&P, Dow, SOXX), then expect the social construct to become unhinged.
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® 