Amgen was whacked for a -10.08% loss during today’s session.
Biotech IBB, XBI, followed suit; down -2.17% and -1.15%, respectively.
Both indexes retraced during the day; it was noted XBI’s retrace was 50%, while IBB’s retrace as 38%.
Therefore, the trading response was to close short-trade XBI-26-10 (for profit), re-establish that short via IBB, as IBB-26-05 (not advice, not a recommendation).
Note in the chart above, the last time IBB pushed below support, it was in spring position and moved higher the next three sessions.
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.
From a Wyckoff standpoint, we’ve identified one of, if not the sector(s) most likely to decline the farthest and fastest in a bear market.
Without question, biotech contains the overriding ‘elephant’ that’s literally affecting everything else on the planet (not advice, not a recommendation).
As stated in the tag-line above, the two indices in question are IBB (large cap) and SPBIO (small cap).
IBB, has Amgen, Gilead and Vertex, as the top three while SPBIO, has more speculative (i.e., losing more money) Beam, Twist and Fate.
Index IBB has $342.8-Bil, combined for the top three while SPBIO has only $6.5-Bil, combined.
So, it makes sense the more speculative ‘cash burning inferno‘ TWST, is in the SPBIO. 🙂
On to the charts
IBB Weekly
IBB has formed a decisive resistance area as shown.
The fourth attempt which pushed above the prior three levels (and retraced), puts IBB, at The Danger Point®
Next up is the SPBIO.
It’s much weaker and thus the focus for any short opportunities (not advice, not a recommendation).
SPBIO ($SPSIBI), Weekly
While IBB, has moved higher, to an up-thrust over the past nine weeks, SPBIO during that time, has languished.
Note: The chart scales are identical. Scrolling up and down, one can visually see the weakness of SPBIO.
SPBIO, also reached all-time highs, six months before IBB.
Getting Closer-In: SPBIO
We’re going to look at the hourly chart.
SPBIO, Hourly
Those who are long-time visitors to this site will instantly recognize the set-up: ‘Spring-to-Up-Thrust‘
This Friday, tomorrow, is a shortened trading day.
There’s a potential we’ll have a small blip higher into the up-thrust zone.
Conversely, for 3X Leveraged Inverse Fund LABD, the potential is for a temporary move lower.
Leveraged Inverse LABD, Hourly
This is how it looks for LABD.
Note for the inverse fund, the ‘spring’ on SPBIO, becomes the ‘up-thrust’ on LABD.
Positioning
Not advice, not a recommendation
Wednesday’s downside action in LABD, resulted in the LABD-22-10, position being stopped out with an overall gain around 7.12%.
There have already been several disruptions to the company’s trading platform and data line over the past month and we’ve not even got started with market chaos.
Recall that just recently, the Canadian market went off-line for several hours. We should consider these events the ‘norm’, on a go-forward basis.
As a result, a standing order (in the market) is in place to go long LABD (short SPBIO) at the execution price of LABD @ 18.62.
That order may or may not be modified as we go into the open tomorrow morning.
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.
With price action similar to the Amgen reversal, senior mining index GDX, is testing resistance.
As if taking a cue from yesterday’s report on gold heading lower, today we have gold and the miners deciding to head higher.
All is not what it seems however.
The GDX chart above, shows we’re already in up-thrust condition. There has been a sign of supply (selling overwhelming the buying) and now we’re heading up into a test.
Going back to this report on Amgen, it’s a near exact replica of price action; except it’s (apparently) taking place quicker.
Note the bottom of the ‘Sign of Supply’ is a Fibonacci 8-Days from the high posted on April 21st.
That would naturally lend itself to expect testing action to complete on Fibonacci Day 13, which is this coming Friday.
Remember, that as soon as everyone’s got it figured out (Fibonacci time frame) it changes to something else. So, if no one is really paying attention and still in the hyper-inflation bull camp, they’ll look at this action as a bull move; missing the reversal (when or if it comes).
Tests can fail as well. GDX could push through the resistance and negate the up-thrust.
As stated many times before, the gold market’s too crowded with too many rabid bulls.
This may be a good test and reversal set-up but we’ll stick with shorting biotech (not advice, not a recommendation).
By the way … biotech’s doing very well on the short side today … 🙂
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.
It’s mid-session; Amgen (AMGN) is down 7.6%, after a poor earnings report.
The last update on AMGN, linked here, had this to say:
AMGN peaked three days later.
The chart below shows it was a Fibonacci 34-days from the 3/4/21 low, to the 4/21/21, high.
On the fundamental side, we have this explanation for the breakdown.
Missing from the earnings report, not only is customer traffic less this past quarter, it’s going to get (if our research is accurate) a whole lot less as customers literally die-off en masse.
Moving on to biotech SPBIO and 3X inverse, LABD:
As shown in a prior update, LABD has repeating trendline characteristics.
Hourly chart of LABD, below:
We’re still very early at the right side of price action to identify a trend.
However, it’s good to know what LABD ‘likes’ and expect that behavior again.
The daily chart is updated with the Fibonacci 34-day time-frame discussed previously. We’re still within acceptable time error for a potential channel.
If LABD does not reverse significantly higher from here, that potential channel will likely be negated.
Summary:
Linked here, is an article just out on ZeroHedge. It discusses the ‘complacency’ of the market and how it’s ready for a long lasting reversal.
Buried within the report (and claiming ‘fair use’ to quote) we have this nugget:
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.
Amgen’s sotorasib news could be its all time high.
Immediately following that announcement, AMGN went into a 20% decline (‘sign of supply’).
In Wyckoff terms, we can look at the action from late January to now as a massive ‘up-thrust’ (false breakout).
That up-thrust is now being tested … with another breakout attempt.
If that’s the case and the test fails with price action retreating from here, then AMGN’s set-up for a significant downward reversal.
Significant in that we’re not (ever) coming back to these levels.
That statement might seem hyperbolic and it very well could be.
However, when one looks at reports like this, insiders are bailing out; leaving “retail” holding the bag as usual.
Fundamentals:
Although not directly related to AMGN, we have yet another horror show in the biotech arena.
The wheels are falling off the ‘speck’ false narrative; tragically so.
The following is taken from the comment section of the video post:
From the guy who filmed :
“Less than 5 minutes from getting God knows what injected inside them the two people to my left starting having seizures. First the gentlemen in the red car was watching in shock as the driver next to him was having a seizure. Little did he know he would have one right after him. I called the medics to help him. They have a procedure where after you get the shot you have to wait in the car for 15 min and if something goes wrong to honk your horn and someone will show up. Well these folks to my left just passed out into seizures with no warning.
You would think it’s just a matter of time before this reaches some kind of tipping point; where enough of the herd realizes all at once, the lie.
Positioning:
The last post has us breaking the rules. Was that the right thing to do?
This morning’s price action has the answer: Yes.
The Project Stimulus table has been updated to include the new (hard) stop level. With LABD currently up a good 5.50%, and looking to move higher, it’s not likely the stop will be hit.
There is one caveat: As of this post, IBB has not printed a new daily low. That leaves the (slight) possibility open for a move higher.
Several attempts have been made to short biotech via LABD (not advice, not a recommendation). It looks like the current attempt is underway.
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.
Price action pushed past yesterday’s analysis to fill a price gap from February.
What’s next is the question.
The answer may be in the pre-market, where AMGN is down -1.25% and inverse fund LABD is up +4.7%
If biotech IBB pushes below yesterday’s low of 154.45, we’ve got tentative confirmation the reversal (which tested its highs yesterday) is going to continue.
We remain short this sector via LABD (not advice, not a recommendation) with a hard stop @ 17.80
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.
Yesterday’s update hinted that AMGN was in a special situation. This is a brief detail of conditions.
First, let’s understand that momentum indicators, MACD on monthly, weekly and daily, all point higher.
If we’re at the downside reversal, the inflection, we’re documenting in real time how it’s taking place.
On the chart, two Fibonacci tools are in use; a retrace tool and a projection tool.
The retrace is from the all time high posted on 1/28/21, to the most recent low on 3/4/21.
The projection tool has been placed on the recent upward action from that low and estimating where the a-b-c (corrective) waves are terminating.
The market itself determines what levels are important. This is one of the main Wyckoff tenets presented by him over a century ago.
It’s clear price action is hesitating at the confluence of a 38% retrace and 100% projection (‘a’ and ‘c’ waves equal) on the chart.
Since AMGN is the largest cap in the IBB, ETF, its behavior has an outsized effect.
A downside reversal from this point, the 38% retrace level, would indicate significant weakness for AMGN.
We also have today as Fibonacci Day 34, from the all time high.
The retrace high may have been yesterday or we may get it today … right around 2:00 p.m. EST, at the Fed announcement.
Update: As this was being written, AMGN just posted a new retrace high.
Stay Tuned
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 15-minute chart of inverse fund LABD shows how successive moves lower (higher for IBB) have covered less distance.
It’s very early in the session and price action at this moment is fighting it out at LABD 18.00, area.
We’ve maintained our short position (not advice, not a recommendation) but have the sense, if there’s not a reversal at this point, IBB could be working up for new all time highs.
This is the danger point.
Current LABD low for the early session is 17.91 … a good place for a stop.
LABD pushed down to 17.80, early in the session before reversing.
It has just passed 18.28, a new hourly high. AMGN to be covered later, at important inflection point (down).
Short position via LABD maintained (not advice, not a recommendation), hard stop at 17.80
With markets at record prices, Fed announcement tomorrow, no more stimulus (likely), forbearance to end, possibility of the ‘speck’ blowing wide open, one gets the sense this may be an important 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.
The Danger Point® 