The danger of this situation can’t be over emphasized.
Not only do market levels and depth of penetration need to be watched but also the time; time spent pushing higher or lower.
Biotech SPBIO, indeed moved higher and penetrated our previously stated 6,384.50 level; here’s the important part: As of now (11:34 a.m., EST), it’s struggling to hold that level.
Looking at leveraged inverse fund LABD, on a 30-minute basis, the market itself is showing, each successive thrust lower (higher for SPBIO), spends less and less time at the new level.
Like a drowning swimmer coming up for less air each time.
The market (SPBIO) may get itself together and somehow continue higher.
However, at this point, we’ve got a hard stop; this morning’s LABD low, of 20.90 (not advice, not a recommendation).
SPBIO, Leveraged Inverse Fund LABD: 30-minutes
Today’s close is likely to be important.
A failure to push lower for LABD, may indicate “we’re done” and now ready for a decisive 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.
Every market has its own characteristics; patterns that repeat.
Biotech (SPBIO) is no different.
Based on its own repeating fractal characteristics, probabilities continue to point to the downside; but first, the ‘reset’.
Out Again, In Again
Everyone has their own style, risk, and pain tolerance.
What’s presented on these posts is NOT financial advice.
It is however, how one professional is approaching, managing, and positioning in what may go down in history as the largest financial, societal, and political collapse ever.
Let’s not lose sight of that ‘macro’ condition.
It’s difficult to grasp the enormity. The ‘pundits’ are already looking for a ‘bottom‘; a bottom that in reality, is probably years if not decades away.
This past Friday, saw a complete exit of the short position LABD-22-05 & TDA-LABD-22-02 (not advice, not a recommendation).
As we’ll see below, once SPBIO, price action showed itself to be failing its up-move and subsequently reversing to the downside, the short was re-established: LABD-22-06.
In effect, the entire short trade was ‘reset’.
At the close, LABD-22-06, was well in the green.
By the way, After The Close … was released just before 6:00 p.m. EST, yesterday. That gave anyone who wanted, a two-hour window to position in the after-hours market (not advice, not a recommendation).
Now, on to the fractals.
Biotech SPBIO, Weekly
We’ll go straight to the marked-up weekly.
The Fibonacci retrace tool shows SPBIO, dipped down to 61.8%, before rebounding higher; a deep retrace, indicating overall upside weakness.
The zoom version below shows the detail of price action rebounding off the 61.8%, then going straight to 38.2% before backing-off.
Here’s The Fractal Part (below)
Getting closer-in on this past week’s action, we’ll use an hourly chart.
It shows the closing low on Monday, the rebound from Tuesday through Wednesday, the retrace on Thursday and the Up-Thrust on Friday.
SPBIO, Hourly
And with zoom.
Once again, during the retrace, price action went to the 61.8%, level just like it did on the weekly.
Characteristics repeating on multiple time frames.
Deep retrace typically indicates overall weakness.
Test, Fail, or Not
This coming Monday, anything can happen.
Price action can come back to the up-thrust and then reverse lower: Test.
It can come up and penetrate the up-thrust, moving decisively higher: Fail
It can gap-lower, move lower, never look back: Not.
The Danger Point®
That’s where we are now.
If price action moves decisively higher and penetrates Friday’s high, it then precipitates an exit of the LABD position.
The other two scenarios, indicate maintaining the position; adding to the size as the market allows (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.
Most important of all in trading, are the failed moves.
Failed moves offer the potential for low-risk entry.
What originally appeared to be a strong launch higher that may have taken SPBIO to a 50% retrace, failed at 38%.
The sector closed up for the day but far below its session high.
Biotech SPBIO, Daily
Price action closed well below the resistance area.
Zoom version below shows slight new daily high (mini-up-thrust) before retracing lower.
The technical details of what is going in will be covered over the weekend.
However, from a positioning standpoint, the short was re-established (via LABD) as it was obvious the move higher was failing (not advice, not a recommendation).
The new short position is labeled LABD-22-06, with an initial entry of LABD, 22.12.
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.
The August 13th, update linked here, identified unprecedented volume posting on the short side.
It’s also interesting to note in the very same report, there’s a link to ‘bears capitulate’.
If there was actually some value to the financial press, this would be it; help provide contrary indicators.
So, here we are just over a month later and biotech SPBIO, appears to be in free fall.
Biotech SPBIO ($SPSIBI), Weekly Close
The prior update had this so say about positioning (not advice, not a recommendation):
“Figuratively speaking, everything’s been dropped to focus exclusively on this sector. It’s obvious, what’s going on at this juncture is unprecedented.”
From that August 13th update, the main account for my firm has increased the size of its short position (LABD-22-05), by approximately 34% (not advice, not a recommendation).
Summary
Unprecedented short-volume, points expectations to some kind of unprecedented bad news.
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.
Only those who can ‘see’, understand it’s like something out of The Matrix.
The old paradigms no longer apply.
There is no ‘Pivot’
There never was a ‘pivot’; just like there never was a goal of 2% inflation, or full employment.
Way back in 1921, Jesse Livermore pegged it when he told Wyckoff, the whole premise of Wall Street, was to spread “deception”.
Deception is the key.
Attempting to figure out the next earnings release, the CPI or employment numbers, inflation, or what the Fed is likely to do, is to buy into the deception.
Following that deception, is the path of the amateur.
Meanwhile, back on the professional side; as early as 1909, Wyckoff discovered market prices move based on an energy and objective or their own … completely removed from any fundamentals.
A few days ago, this update, discussed how biotech SPBIO, was potentially at a pivot point and ready to reverse lower.
Well, downside reversal is what we have.
Biotech SPBIO, Weekly Close
Even though we still have three trading days left, SPBIO, appears to be confirming the right-side trading channel.
Last Week.
And … this week
With the overall markets down sharply, events appear to be set in motion to continue downside action.
Summary:
As stated in prior updates, the current trade; LABD-22-05, was initiated in anticipation of a significant break lower (not advice, not a recommendation).
On the biotech fundamentals side (not that it matters), the wheels have come off.
The top weighted equities have no P/E … a decent conclusion may be the lower weightings don’t either.
Nobody’s making any money; rates are rising and we’re heading straight into an economic depression.
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 going to be a very different place come December.
This won’t be like ’08 -’09, where all the stops are being pulled to ‘rescue’ the market.
No, this time really is different.
We can all see by now; the plan is controlled demolition.
Paraphrasing Jerimiah Babe, and Pinball Preparedness, we haven’t even got started (with the collapse) and the public’s already folding up.
What’s it going to be like when it really hits?
This past week, all the major indices have gone through some type of relief rally. Call it a Santa Claus rally because there probably won’t be one this December.
Trading Consistency
Throughout this upward correction, the case has been made over and again, only biotech SPBIO’s in a technical (and fundamental) condition that would allow it to decline farthest and fastest (not advice, not a recommendation).
Wyckoff analysis along with Livermore’s strategic approach that’s coupled with Loeb’s ‘focus’, has led us to (shorting) this sector exclusively.
Strategy, Tactics, Focus
Biotech SPBIO, Weekly Close
Looking at the far-right side of the chart, SPBIO rallied this past week. It looks like it may head higher … that is, until we put in the trend-lines.
Now, let’s put in the trendlines.
Extended trendlines show the downside potential.
We’re about to see how this works out.
Friday’s upward action in SPBIO slowed with inverse LABD, posting narrow (downside) action as well.
Ready to reverse.
Summary
Trading action in the past week amounted to reducing the position size in LABD-22-05, by about 4.6% (not advice, not a recommendation).
If and when SPBIO continues is downward trajectory, that position (shorting via LABD) will again be increased as the market allows.
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® 