With today’s heavy downward action, as we head into the close, any number of scenarios could play out.
Work has already been done on INTC, KMX, MRNA, Biotech Leveraged Inverse LABD, and others.
With such a decisive push lower, there could be some kind of short covering late in the session.
For example, as of this post 2:15 p.m. EST, KMX (detailed below) appears to be coming off the day’s lows.
CarMax Weakness
The daily chart has KMX, right a the bottom of a trading channel.
Price action may continue to rebound from this area heading into the close or not.
If there’s a rebound, naturally Put options will begin to decay in value … a desired outcome if one is looking to enter short (at the cheapest price possible).
The bottom of the channel line could be all there is for this week or we could be heading to much lower levels.
It’s up to the trader/speculator to decide (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.
With that understood, we’ll present three potential scenarios for Moderna (MRNA) price action for the upcoming days, or week(s).
When we last left our chief cook and spike-protein injector, price action was in a downtrend but also in Wyckoff spring position; indicating at least a chance for upside.
As with the CarMax (KMX) analysis, still playing out with Scenario No. 2, and/or No. 3, at this link as the forecasted price action, we’ll show potential Scenario No. 1 – No. 3, for MRNA, below.
Moderna MRNA, Daily, Forecasted Action
Scenario No. 1
Upside wedge breakout
Scenario No. 2
Downside wedge breakout with no test
And now, the most probable, ‘If there’s a downside breakout.
From a short-dated options standpoint, Scenario No. 3, is the most desirable (not advice, not a recommendation).
If there’s a downside breakout with no test, there’s always the possibility at some point, there will be a test, which in turn completely wipes out any potential gain in the (put) trade; time would run out and the option expires.
Re-Visiting, Elder
Recall, in the example that Dr. Elder gave, he bought OEX Put Options at 3/8-ths, back in the day when the markets traded in fractions.
Three-eighths is 0.375, which gives a target value on which option to select (not advice, not a recommendation).
To get to that small of a fraction, the option’s either way out of the money, short on time, or both.
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 a potential right-side trend (and channel) contact confirmed; shown below at – 86% annualized, odds are now favorable for a Put strategy.
In addition to the technical factors discussed, listed at the bottom of this post are no fewer than 22-links to the current fundamental state of biotech and their ‘handiwork’.
The weekly chart of MRNA, has a Wyckoff Up-Thrust and a test, confirmed by the downside pivot.
Moderna MRNA, Weekly
Notice the reversal action took place at a very weak Fibonacci 23.6% retrace.
The two blue lines on the daily chart (below) are exactly parallel.
The grey lines are parallel to the blue lines and intended to show MRNA, exhibits a repeating (downtrend) pattern.
Moderna MRNA, Daily
The expanded version on the daily has support being penetrated (horizontal blue line) and then ‘spring’ action last Friday as a result.
Of course, it’s ‘what happens next’, that’s the question.
In a prefect scenario, price action would thrust lower for a day or several days and then come back up to test the underside of resistance.
Elder Option Strategy
This strategy is taken from Elder’s book ‘Come Into My Trading Room’, and seeks to use as short-dated options as possible.
Doing so, requires the discipline to wait sufficient amount of time for price action to get into position and for option time value to bleed-off.
Potential Upside
Since we’re already in spring position and price action moved off the lows on Friday, MRNA could continue the upside right back to, or past the downtrend line.
However, with massive (undeniable) fundamentals building buy the day, and MRNA being mentioned specifically in at least one link below, probabilities favor the downside.
Supporting Links For The Bearish Stance
Florida Surgeon General Warns Life-Threatening VAERS Reports Up 4,400 Percent Since COVID-19 Vaccine Rollout
US Says Government, Not Moderna, Should Face COVID-19 Vaccine Lawsuit
New Medical Codes For COVID Vaccination Status Raise Concerns Among Experts
Watch: Rand Paul Grills School Of Nursing Head On Student COVID Vaccine Mandate
US Navy Lifts COVID Vaccine Mandate For Sailor Deployment
Mainstream Media Continues To Push False ‘COVID Heart’ Narrative To Explain Excess Deaths
NFL Players’ Association Urged To Screen for Heart Issues Over Vaccine Side Effects
WHO Suddenly Shelves Plans For Second Phase Investigation Into Origins Of COVID-19: Report
Watch: CDC Director Suggests It Will Never Change Child-Masking Policy
Rand Paul Introduces Bill To Halt Funding For Hospitals Denying Care To The Unvaxxed
Welfare State Weakens… 30 Million Americans Are About To Lose ‘COVID’ Food Stamp Handouts
IMF Says World Needs To Prepare For The “Unthinkable” After COVID, War In Ukraine
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.
Of all the major indices for today’s (Wednesday) session, biotech’s SPBIO, Leveraged Inverse Fund LABD, had one of, if not the largest gain @ +10.48%.
The last update identified two sectors to watch for short positioning: Real Estate IYR, and Biotech SPBIO; Short positioning via leveraged inverse funds DRV, and LABD, respectively (not advice, not a recommendation).
Since that post, DRV is up + 1.74%, and LABD is up + 8.58%, both measured on a close basis.
The ‘Big Reveal’
Remember: When price action turns south, that’s when the bad news comes out.
If this is the big reversal and biotech is the downside leader, unfortunately, that could mean a planned ‘reveal’ by the mainstream media.
Anyone going to alternative sites such as BitChute, ZeroHedge, Rumble, know full well what’s happening.
Maybe we’ll have another distraction like the 100-th (at last estimate) food processing plant fire or even something totally retro, like a balloon flying across … oh, wait. 🙂
Biotech SPBIO, Leveraged Inverse LABD
We’ll get straight to the point as prior updates have built a substantial case for a long term, significant reversal.
Recall, LABD is the leveraged inverse of SPBIO. The daily chart shows the current set-up.
This site does not provide investment advice.
With that said, one could infer from this prior post (at the bottom), a position in LABD had already been established and included a hard-stop.
That was indeed the case.
Next Steps
There’s no guarantee on how far or how long a directional move will go.
However, for SPBIO, one can observe since the February 2021, reversal from all-time highs, a sustained, directional move typically lasts 4 – 6 weeks.
The next update will show the best chart timeframe (multiple days) that resulted in capturing the majority of the directional moves since the February 2021-high.
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 last update about our chief cook and bottle washer of gene ‘modification’ had this to say about price action.
“We’re about forty minutes into the session; Moderna (MRNA) has just confirmed the up-thrust reversal discussed in the last update“.
From that point Moderna (MRNA) declined for seven weeks for a total of around – 31.5%.
However, that’s not the most important part.
In that update, a trading channel was shown which at the time, was declining at – 93.7%, on an annualized basis.
Well, the channel is back.
Only this time, probabilities and price action have come together to set up for a potential sustained decline.
Moderna MRNA, Weekly
Above, we have a Wyckoff ‘Up-Thrust’ and a test that has since turned lower.
Next, we have a series of repeating trend or channel lines.
Additional data has modified the downward slope to be declining at approximately – 90%, annualized.
From a fundamental standpoint, the data set is enormous on the events of the past three years.
At some point that data could provide a huge tailwind for downside action.
For now however, let’s stick with what price action is telling us and go to the Summary & Strategy
Summary & Strategy
The past week has identified two areas of position or trade execution and two areas for possible short-term options execution (not advice, not a recommendation):
Position or Trade: Real Estate IYR, and Biotech SPBIO
Options: Carmax KMX, and Moderna MRNA
As a reminder, most if not all trade analysis is for the short side (not advice, not a recommendation).
Final Thoughts
Since we have possibly the largest bull trap in market history with huge numbers of VIX Call options, the following week may be subdued by going modestly up, sideways or down, slowly.
With that said, options positioning (if any) could be slated for the week of 2/17/23.
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 large number of VIX (volatility) Calls, tells us, not to expect an immediate sharp move lower.
Those Calls will likely need to be bled-off in value, before we get a significant downward spike … if there is one.
Market Summary, Watch List
Over the past week, there are two markets that are being monitored for short position entry: Real Estate and Biotech; IYR, and SPBIO, respectively.
After nearly five months of price action whipsaw and congestion, biotech appears to be in a nascent downside reversal. Real estate looks to have reversed today (not advice, not a recommendation).
Biotech has been the weakest (technically) of all the major indices (except miners, GDX and GDXJ).
We’re going to look at the daily chart of SPBIO, to see the opportunity and the risk.
Biotech SPBIO, Daily Close
Since late September last year, there has been sideways-to-up, price action congestion.
Price action today, appears to have resolved into a nascent reversal.
We’re going to invert the chart to mimic the leveraged inverse fund LABD, showing the opportunity and the risk.
SPBIO, Daily Close (Inverted)
The prior two days of Fed induced bullish short-covering hysteria, have resulted in a decisive penetration of the support level, as shown.
By definition, this puts us in Wyckoff ‘Spring Position’; be on guard for a potential reversal.
Positioning
There have been many false starts to this sector’s reversal as evidenced by previous posts.
However, today’s action is consistent with resolution of the five-months of congestion (not advice, not a recommendation).
Every trading/speculator has their own style and this site does not give financial advice.
With that said, a (highly leveraged) short entry via LABD, would have a hard stop at today’s low.
At present (2:15 p.m., EST) and entry at LABD 12.91 would have a stop at 12.45, yielding a ‘risk’ of 0.46-pts.
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 clock is ticking for biotech in so many ways. Now, one more event.
Shown below is an inverted chart of biotech sector SPBIO.
While all the major indices have posted a bear market rally above their 200-Week moving average (except the miners), the SPBIO, has remained firmly below those levels.
Now, today, we have a decisive penetration of resistance as shown on the daily below.
The chart has been inverted to mimic the 3X Leveraged Inverse Fund LABD.
So, ‘resistance’ now becomes ‘support’ on the inverted chart.
Biotech SPBIO, Daily (Inverted)
We’ve penetrated ‘support’. Therefore, we’re in Wyckoff ‘Spring Position’, ready for reversal.
Even as this post is being created (2:25 p.m., EST), LABD is coming off its lows; currently trading at LABD: 12.61
A push back above support (approx. LABD 14.00 area), would indicate the spring reversal, is underway (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.
Let’s see if the market’s ready to hand it to this sector. What’s the price action telling us.
Biotech SPBIO, Weekly
The weekly chart shows the potetial breakout.
However, since we’re looking at this from a ‘going short’ perspective (not advice, not a recommendation), the chart following this one is inverted.
When we invert the chart, it takes on a whole different look.
Biotech SPBIO, Weekly (Inverted)
If price action’s spent over three months getting where support has been penetrated only to have it fail into a reversal, the ensuing move has massive potential.
In Wyckoff terms, it’s cause and effect.
The ’cause’ has been three months of congestion. The ‘effect’ is a potential long duration, or wide volatility move.
Before The Open
It’s twenty minutes before the open and 3X leveraged inverse fund LABD, is trading higher by about +3.5%.
This is normal behavior whether we have a reversal or not.
One last check of ZeroHedge, before releasing this post turns up this:
Senator Questions CDC On Why It Claimed No ‘Unexpected Safety Signals’ For COVID Vaccines
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.
Was that the day where irrefutable evidence like this is going to stick?
Price action of Biotech Sector IBB, has posted a long awaited and anticipated reversal signal (not advice, not a recommendation).
We’ll look at that below.
The IBB, Up-Thrust & Reversal
As a reminder, in Wyckoff terms, an ‘up-thrust’ is where price action struggles above known resistance for some period of time and then reverses to the downside.
In the case of IBB, that ‘struggle’ lasted an incredible seven-weeks.
Biotech IBB, Weekly
Price action attempted to break above resistance for nearly two-months, before reversing lower.
Then we had an initial test during the week of 12/23/22 (on the daily for three days), and a secondary test last week.
Biotech IBB, Daily
The daily shows more detail on the struggle.
Point No. 1, was the initial test. Point No. 2, was the secondary test which appears to have decisively failed.
Pre-market action shows IBB, set to open slightly lower.
If it does, then expectation is for some (brief) attempt to rally as a test of the breakdown.
The Driving Force
For years, this site has not wavered in the assessment, what’s happening in this sector, will be the driving force for the entire market on a go-forward basis (not advice, not a recommendation).
Anything can happen.
It’s unknown if yesterday was ‘the day’.
What is known however, evidence is building on a massive scale. Every day, sometimes multiple times a day, we see the effects.
Positioning
This site presents the data, the insight and price action nuances. It does not give recommendations.
With that said, going short this sector is not as straightforward as the other major indices.
IBB, may be shorted directly but will likely result in a maintenance fee from the broker.
Of course, that puts one on the hook for the sector’s dividend payment (currently yielding 0.31%).
The other option is 2X leveraged inverse fund BIS.
However, this fund’s volume is thin … meaning it’s not nearly as liquid as the other inverse funds such as SDS, DXD, QID, SOXS and so on.
It’s up to the trader/speculator to participate or not.
We’re about fifteen-minutes before the open. Let’s see what happens next.
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 a digression; in Texas, we’re just now coming out of yet another record-breaking cold spell.
That’s two, never before seen record breaking low temp events within the past three years!
How does that fit with the global warming narrative?
Anyone awake knows full well what’s going on … and it’s not global warming.
Who’s On First: NFLX or TGT?
Now that vending machine Carvana (CVNA), is out of the way, who’s next?
Partly as a result of economic decline and partly from the decision to take consumer spending elsewhere, Netflix and Target now appear ready to continue their implosion.
More on their technical chart conditions in the next update.
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® 