Category Archives: Biotech

Position Change

April 8, 2021 By in Awaken with J.P., Biotech, BIS, DRV, IBB, IYR, LABD, Project Stimulus, Real Estate, SRS, The Speck, Uneducated Economist 3 Comments

DRV pushed through our stop early in the session; position closed (not advice, not a recommendation).

1:50 p.m. EST:

Despite all the analysis, IYR is showing continued buoyancy.

Something else is going on; possibly related to Uneducated Economist’s link provided in the last update.

Taking his cue, a functioning mortgage market is all important to the financial narrative, it’s possible this market will be more heavily manipulated than others.

At this juncture it would make sense. All indications are for reversal … yet it’s not happening in any significant way.

Time for another trade.

We’re going back to a market that in retrospect, should’ve been the focus all along; Biotech.

This site’s coming from the perspective those reading, are well aware the ‘speck’ as we call it (to avoid censorship) was a fabricated event.

Just a reminder that we’re not some ‘Johnny come lately’, here’s the link from way back in May, last year.

That post proves the situation was figured out well before the May 17th publish date (interviews, observations conducted a month prior).

What’s not fabricated however, are the repercussions from the so-called cure for the speck.

Unfortunately, those are happening now and are quite real.

Moving on to the trade.

Despite the number of transactions shown in the Project Stimulus table (below), the objective is to minimize activity. We’re looking for a mid, to long term sustainable move; gain potential, 100% to 1,000%.

Updated previously, very long term (Quarterly) IBB has reversed.

Monthly and weekly have reversed as well; both the monthly and weekly MACD indicators point down. Daily is essentially flat.

The hourly chart of LABD (3X inverse IBB) shows the entry location and subsequent price action. Stop is the session low @ 22.23 (not advice, not a recommendation).

It’s worth repeating, the false narrative on the speck and consequences of speck protection may blow up in the media (and biotech) at any time.

As J.P. says, getting people to do something they know is bad for them (or lethal) is the ultimate ‘elite’ 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.

Something Different, Biotech

April 7, 2021 By in Biotech, BIS, IBB, LABD, The Speck 6 Comments

A long term (Quarterly) view of biotech, IBB

The inverted chart puts it into perspective. Biotech has already reversed.

It would seem fitting as truth is hard to put down forever.

One can only hope the whole fake ‘speck’ narrative will be blown wide open … taking the entire sector down with it.

It may already be happening but in such slow (long term) motion that we’re not noticing it.

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 Technical Discussion

March 24, 2021 By in Biotech, IBB, LABD, Project Stimulus, Wyckoff

Yesterday’s swift move lower in IBB looks like the start of the next leg down.

Update 10:34 a.m. EST in red below:

Closer inspection however, shows biotech could pivot and move to higher levels … if only temporarily.

We’re looking at the 30-minute chart of IBB. Yesterday’s action penetrated minor support and stopped dead.

When price action behaves in that manner, it puts the index in what Wyckoff called ‘spring position’ ready to move higher.

Then we have the wide 30-minute (red) bar from the session; likely to be tested. To do that, action needs to move higher.

The target area is near a 62% retrace of the entire down move from the high on February 10th, to the low on March 5th.

Note, yesterday was a Fibonacci Day 13, from that March low.

Even though IBB’s likely to move higher, we’re leaving it alone.

If action gets to the target, we’ll be ready to short (via LABD) if there’s opportunity.

Update:

It’s not called “The Danger Point” for nothing.

Price action penetrates deep below (minor) support effectively negating the ‘spring’ scenario discussed.

We’ve now penetrated below another support level

Price action can still spring upward from here … although probabilities appear to be fading.

Either way, we’re not interested in going long at historic valuations.

Separately, our ‘project’ has maintained short real estate via DRV (not advice not a recommendation), to be covered in a later update.

Stay Tuned

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.

Project Update

March 22, 2021 By in Biotech, DRV, IBB, IYR, LABD, Project Stimulus, TLT 1 Comment

Early today, LABD was exited having hit the stop.

If there is a story for the day, it’s the long bond TLT.

Potentially a nascent reversal.

Interest rate sensitive markets, like real estate, appear positioned for reversal as well.

Inverse fund DRV above, shows penetration below support and then testing action today.

We’re at the extremes of price action. IYR and DRV do not need to go far to confirm or negate a reversal condition.

At this point (1:03 p.m. EST) our ‘project’ has no position … although DRV looks enticing and low risk (not advice, not a recommendation).

Charts by StockCharts

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.

Sentiment Shift

March 21, 2021 By in Biotech, Bonds, IBB, Lumber, SPY 1 Comment

There’s been a change in direction; a sentiment shift.

Not in any particular order:

The Fed will not, or does not want to control the long end of the curve (long bond).

Interest rates (mortgage rates) are now rising and have been there long enough to start affecting the real estate market.

As reported by Uneducated Economist, there’s been a shift in behavior of his lumber customers.

Instead of furiously attempting to secure lumber (as prices continue to rise), now, there’re backing off; Not wanting to be holding overpriced inventory if/when there’s a reversal.

Remember:

Sentiment first. Then volume. Then direction

From way across the pond, Bjorn Andreas Bull-Hansen gives his input that ‘Things are changing … the entire structure of society’.

He also sates, as this site has done many times … ‘it’s not coming back’.

Has all this fed into the markets?

Let’s take another look at the S&P 500 (SPY), analyzed on the 15th.

At that time, we stated the SPY’s at the danger point.

The original location of that analysis is the orange arrow. Indeed, the SPY continued a brief rise before reversing.

Downward pressure (thrust energy) has increased.

Unless it’s a flash-crash, markets do not go straight down.

The SPY shows a nascent reversal. Price could come back to test resistance (black line) or continue to decline from here.

It’s important to note the overall market position (of the large indices) as they affect everything else.

With that, our focus remains on biotech (IBB) as it appears to be the weakest of the major sectors (not advice, not a recommendation).

Sunday futures open in a few hours.

Stay Tuned

Charts by StockCharts

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.

Run The Stops

March 20, 2021 By in Biotech, IBB, LABD, Martha Stokes, Project Stimulus 1 Comment

It took the entire session on Friday for price action to hit the LABD stop @ 18.96.

It’s the way it happened, that defined what happened next.

Since we don’t have access to the order book, we can only conjecture where stop orders had accumulated.

The market’s interested in transactions, not levels. Wherever there’s a preponderance of orders … that’s where it goes.

Martha Stokes, CMT, put it well when she said (paraphrasing):

‘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.’

While the original LABD 18.96, stop may not have been a popular location for the small (and maybe big) traders, price action throughout the day could have ‘pumped’ the stops to that location.

Case in point is the huge block trade just at the 1:00 p.m. EST, mark.

At that point, 31,500 shares went by (on the tape) at price 19.10 … which equates to over $600,000 in one transaction.

So, where are you going to put your stop for that position. Below the market, right? Maybe at 18.95 let’s say? Especially so ,when price action instantly rallies away from that entry; all the way to 19.78, intra-session.

The stop would appear to be tight but well positioned.

However, if there was a stop for that huge block and it was too close to the market (with other stops accumulating), it would act as a magnet for price action; drawing it back to that level to get the transaction (hit the stop).

Of course, it’s all conjecture and we won’t ever know for sure.

If the LABD market opens significantly higher (IBB lower) on Monday, then our assessment looks correct.

A lower or unchanged open, signals us to get out. If that happens, then IBB is likely to be heading higher.

As you may have guessed by now, the response to all this kabuki was to re-position the stopped-out order.

The table below has the summary:

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.

Project Stimulus: First Trade

March 19, 2021 By in Biotech, IBB, LABD, Project Stimulus

The first objective on the newly announced ‘Project Stimulus’, is protect the position.

As yesterday’s announcement stated, we’re taking the stimulus payment and trading a separate account.

The trading techniques to be used are presented on this site.

The magenta bar shows the entry at LABD 18.835 (not advice, not a recommendation) opened during the Fed speech this past Wednesday.

The reason for the entry at that time was two-fold.

First:

Biotech IBB was already at 50% retrace and had rejected that level once.

Monthly and weekly momentum MACD, indicators were (and are) pointing down; giving extra weight to a potential reversal.

Second:

Empirical data (i.e. experience) gathered over a thirty year period had shown, whatever direction the market took during a Fed speech, was quickly reversed in the coming days:

I’ve labeled such events as “Fed-Fake”.

At this point, the position is well in the green, closing at $1,552, yesterday. We’ll be putting in a hard stop at 18.96, shown above.

If we’re in a sustained reversal, it’s not unreasonable to expect price action to get back to previous near-term highs (lows for IBB).

Using highly leveraged LABD (not advice, not a recommendation) that would equate to about a 50% gain.

Stay Tuned

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.

AMGN, Gap Filled

March 18, 2021 By in AMGN, Biotech, IBB, LABD, Positions

Price action pushed past yesterday’s analysis to fill a price gap from February.

What’s next is the question.

The answer may be in the pre-market, where AMGN is down -1.25% and inverse fund LABD is up +4.7%

If biotech IBB pushes below yesterday’s low of 154.45, we’ve got tentative confirmation the reversal (which tested its highs yesterday) is going to continue.

We remain short this sector via LABD (not advice, not a recommendation) with a hard stop @ 17.80

Charts by StockCharts

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.

Pre-Market: Biotech Lower

March 17, 2021 By in Biotech, IBB, LABD

Biotech has reversed.

Inverse LABD, higher in pre-market, approx: +5%

There are essentially two scenarios:

First, IBB is retracing, gathering fuel for new highs

Second, IBB has reversed and is heading much lower

Target levels to be identified and reviewed in a subsequent update.

Charts by StockCharts

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 50% Retrace

March 16, 2021 By in AMGN, Biotech, IBB, LABD, Positions, The Speck 1 Comment

Biotech pulls back 50% and the bulls look tired.

Update 12:23 p.m. EST, noted below in red

The 15-minute chart of inverse fund LABD shows how successive moves lower (higher for IBB) have covered less distance.

It’s very early in the session and price action at this moment is fighting it out at LABD 18.00, area.

We’ve maintained our short position (not advice, not a recommendation) but have the sense, if there’s not a reversal at this point, IBB could be working up for new all time highs.

This is the danger point.

Current LABD low for the early session is 17.91 … a good place for a stop.

LABD pushed down to 17.80, early in the session before reversing.

It has just passed 18.28, a new hourly high. AMGN to be covered later, at important inflection point (down).

Short position via LABD maintained (not advice, not a recommendation), hard stop at 17.80

With markets at record prices, Fed announcement tomorrow, no more stimulus (likely), forbearance to end, possibility of the ‘speck’ blowing wide open, one gets the sense this may be an important 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.