Once again, stopped-out of the biotech short (not advice, not a recommendation).
Call it bad timing, incorrect analysis or whatever. Every opportunity for SPBIO, to go lower is being thwarted … so, no more for now.
On the flip side, the potential collapse in silver has been discussed over the past few weeks, here, here, here and here.
Looking at the chart below, not only do we have a Wyckoff Up-Thrust, but unless it’s negated by subsequent price action, we’ve got an ‘island gap reversal’ as well.
Prices can’t be sustained at yesterday’s higher level.
Silver SLV, Daily
As previously discussed, very late in the session as SLV, price action rose higher, reducing the risk, a short was entered via Leveraged Inverse Fund ZSL @ 28.08 (not advice, not a recommendation).
The trade is identified as ZSL-22-01.
An obvious hard-stop would be yesterday’s high in SLV, or the corresponding low in ZSL @ 26.55.
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.
Well, it’s the ‘get right’ part that’s the challenge.
As for Biotech SPBIO, it’s no secret it’s been on again, off again, then back on again.
So, it is. Based on current price acton, yesterday was a head-fake into the 38% retrace.
This morning’s session attempted to move higher but was rejected within the first 3-minutes.
Once again, the short trade via LABD, has been re-established (not advice, not a recommendation).
We have LABD-22-07; entered at 21.88, with a stop at the session low of 20.88.
At this juncture (10:50 a.m., EST), Inverse Fund LABD, is pushing higher.
The hourly chart of SPBIO, shows the 38% retrace and reversal.
Biotech SPBIO, Hourly
Expanded version.
As of this post (10:50 a.m., EST) price action has just filled the gap from yesterday’s session. Some amount of SPBIO, retrace higher (below this morning’s highs) is reasonable.
Summary
The groundwork has already been laid over the past few months and even as far back as one year, why this sector may be set for a stupendous decline.
Of course, we don’t know if ‘this is it’, until it’s all over.
For now, the LABD position is in the green with a hard stop at the session low of 20.88 (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.
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 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.
The Danger Point® 