Keep the population continuously distracted: Wear your mask, be afraid, take the blue pill and follow orders; Sounds a lot like a certain European country in the early 1930s.
We’re in a long-term game plan(demic) of unprecedented wealth-transfer.
Part of this transfer is to keep the ‘market’ rising higher, while underneath, the foundation crumbles.
Those in the know, cash-out.
The vast majority of equities do not participate in the up-trend until the end. That end, is when the top ten, the top seven, the top five all the way to the top one, which at this point is Apple (AAPL), can’t go any higher.
In classical terms, the market ‘thins out’.
At this juncture and barring any surprise to the up-side, we see biotech (IBB) reached its all time high weeks, even months ago in late July.
There has been a steady, but halting progression lower until the past week.
If the 23.6%, retrace holds, it’s an indicator of substantial weakness in the sector.
Looking to what might be ahead, the weekly chart notations show a potential Head & Shoulders pattern in its very early stages.
It’s just after the market open and there’s better than expected news on employment. That is, until you factor in temporary Census workers, skewing data to the upside.
The Money GPS has long been providing real data and analysis (for years) on the market’s end-game. Time stamp 7:24, at this link identifies the boost in employment numbers resulting from (Census worker’s) temporary hiring.
All this brings us back to price action. What is the market saying about itself?
For biotech, there’s a possibility for a rise into a Fibonacci retrace level during this session. The hourly chart below, captured just three minutes after the open, shows the action thus far.
From empirical observation, IBB exhibits behavior where stop running, equalization of forces are complete around 11:30 a.m. EST.
Depending on general market forces (S&P 500), if there’s going to be a reversal, it typically happens at (or before) that time.
If the down-trend is to continue, we’re looking for a test and reversal at either the 28.6%, or 38.2%, retrace level.
If or when that happens, it will be the trader’s discretion (not a recommendation) to either enter a short position or increase an existing position … or stand aside.
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.