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.
In just one day, Globe Life closes down – 53.14%, on historic volume, over 35-million shares.
No matter the narrative, it shows just how fast a market can implode.
Years ago, while watching an episode of Wall Street Week, with Louis Rukeyser, one of his guests commented on a corporation that released (unexpectedly) bad earnings.
He said … ‘I believe in the cockroach theory. Where there’s one, there’s more’.
Does anyone think Globe Life is, or will be, an isolated incident? This could even be a ‘Lehman Moment‘ and we just don’t know it (not advice, not a recommendation).
Up-coming (potential) problems with life insurance have already been covered; best described in this brief four-minute clip, link here.
The Biotech Connection
The connection between biotech and life insurance can be correlated with this link and this one.
Biotech, XBI, Daily
The chart below, is slightly different from one’s typically presented on this site.
It’s on the daily timeframe but it’s compressed to better show the sector sub-dividing lower.
Yesterday’s Fibonacci analysis may still apply but we won’t really know until we see tomorrow’s action.
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.
Here’s the latest news (as of 2:03 p.m., EST), link here.
Note, the article says the shares ‘tumbled’ … hardly, it’s a crash … take a look at the chart, link here.
The life insurance sector, and more specifically Globe Life (GL) along with Met Life (MET), have been on the watch list for reasons discussed many times on this site.
The Biotech Link
Possibly related (correlated) to the life insurance industry is biotech.
We’ll discuss that sector, XBI, in an upcoming update. The synopsis is that XBI could make a brief new daily high today (or at the open tomorrow).
If so, it could put the sector in a minor up-thrust position, while still in an overall down trend.
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.
Biotech’s been beat up and down so much, you can lose track of what’s really happening.
Include the financial media side-show, and it’s a recipe for confusion and delay.
In the case of biotech XBI, it had a ‘change of character’ on March 21st, then morphed into a trading channel.
Now, it looks like it has a Fibonacci time correlation.
It all sounds complicated, so let’s take a look.
Biotech XBI, Daily
The original change of character, identified in this post.
Yesterday, Tuesday, was Fibonacci Day 13, from the point where the ‘change’ was noted.
It appears, the market used Tuesday, to post the right side (supply side) of the current trading channel.
Of course, there have been no ‘confirming’ hits on that right side so far; we just have one data point.
As the action unfolds, the key is to look for the market to adhere to the channel or tell us that something else is happening (not advice, not a recommendation).
Sorry, No Rate Cuts
That’s news to some.
On this site, it’s been a working premise for over a year.
Remember, back then, it was called ‘The Pivot’:
“Like ‘bread and circuses’, the ‘pivot’ discussion is a distraction … keeping the proletariat placated.”
Now, the man behind the curtain has been exposed, here and here, it may get very dangerous … as if it’s not already.
This post is being released (12:52 p.m., EST) before the Fed minutes. No telling what kind of volatility may, or may not, ensue from there.
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.
If it’s not behaving as expected, then it’s obviously doing something else.
In the case of biotech XBI, that something else, may be working its way to the next set-up.
Strategy First
Until price action proves otherwise, the overall long term reversal assessment of the sector has not changed (not advice, not a recommendation).
We’ve had a potential long-term up-thrust (reversal) that’s been covered here, and here.
That second link contains a 3-Day chart analysis.
Looking at the current price action and having it dictate what chart to use, we’ll switch to a 2-Day, which shows the potential more clearly.
Biotech XBI, 2-Day
The sector has failed to break below support in the 92 – 93, area. Instead, it has decided to bounce in what looks to be a possible minor spring-to-up-thrust.
We can see there’ve been two ‘hits’ on the upper resistance line. One, immediately after the up-thrust breakdown and one later … 4-bars later.
These hits essentially confirm the area, in effect, setting it up for potential penetration.
One has to think about where the stops are located.
If I was short this sector (I have been, but not currently), where would I place my stop?
Naturally, I’d put it right above the resistance (blue) line, exactly where everyone else has put theirs 🙂
Years ago, Martha Stokes wrote an update on why everybody gets stopped out of their trades, paraphrasing from this link:
‘The Market Makers don’t know you are there; they’re not interested in your tiny little stop order.
If your order does get taken out, it’s because too many small traders put their stops at the same location.
There’s an order imbalance. The market’s response is essentially automatic … take out the stops.’
With that, let’s see what happens next.
There’s no guarantee XBI, will penetrate the resistance area but if it does, we won’t be surprised.
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.
YouTube content creators have noticed the public’s inability, refusal, and denial to recognize (or accept) the truth:
Michael Bordenaro; ‘everybody’s so weak, so sensitive, they can’t handle the facts.’
Patera, Appalachia’s Homestead; discussing her lineage (Cherokee) and history, seeing the similarities of today, applying the lessons; some are more concerned about her hair and makeup.
Then, Uneducated Economist; ‘no amount of wishing is going to bring events back to the way it was. It’s effectively a new construct.’
Interest Rate Ruse
The 40-year bull market in bonds is over; rates are not going lower, they’re going higher (not advice, not a recommendation).
Ignoring or refusing to recognize this (highly probable) truth when analyzing markets, is a potential strategic error.
The longer the ruse goes on, the more violent the reaction may be when the masses (finally) ‘awake’.
All of which brings us to biotech, XBI, SPBIO, $SPSIBI.
Biotech Truth
Truth about biotech is brutal; described here, here and here.
Exactly how this will all hit the mainstream in force, is unknown. However, let’s not forget, ‘when price action goes south, bad news comes out’.
Biotech XBI, Daily
Heading south at this point, is biotech XBI.
Market test of the Wyckoff up-thrust (reversal) appears complete; previously discussed here, here and here.
As of 1:40 p.m., EST, XBI is trading back into congestion (92 – 96) and looks to have formed a trading channel.
Left channel contact line shown as No. 1, is supported by this post, potential long-term 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.
The financial press will always come up with some kind of ‘reason’ why the markets went up or down.
However, getting to the truth of price action is sometimes boring and also requires a focused amount of thinking.
That thinking requirement, puts it ‘right out‘ (as the Brits would say) for any kind of media consideration. 🙂
Therein lies the opportunity; case in point, biotech, XBI.
The sector did not move higher today as a result of any type of ‘good news’ for potential rate cuts; cuts that so far have yet to materialize (waiting now, for over a year).
No, XBI went higher today to ‘test’ the underside of resistance after its own break through that resistance.
Biotech XBI, 3-Day
As stated in the prior update, it’s going to take some kind of extra demand to get the sector back to bullish.
For now, it’s right below resistance and testing.
Obviously, what happens tomorrow, is important.
If we’re in a test, and not a new leg higher, the expectation is for very limited upside price action … if any.
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.
Tomorrow’s the Fed interest rate announcement; anything can happen.
The way it stands now for biotech XBI (the day prior), an upside rally is against the odds.
The chart below for the sector is a busy one.
Biotech XBI, 3-Day
Price action’s below resistance (possible false breakout), has broken an upside trend to the downside (grey dashed line) and today, has come back for a test of both.
Breaking below resistance was accompanied by increased volume; bearish.
A significant amount of demand will need to show, to get this market back to the bullish side (not advice, not a recommendation).
The Fed interest rate announcement is scheduled for Wednesday, 2:00 p.m., EST.
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® 