Category Archives: Biotech

Class Action

December 30, 2020 By in Biotech, BIS, IBB, LABD, Positions 1 Comment

Markets press on, new highs. However, biotech (IBB) is losing luster.

It could be just a temporary blip on the road upward.

Or, there could be something else afoot not known to the general public … and possibly not even known to professional speculators and market traders.

The video link below is to an alternate (independent) platform. One among many popping up in response to ‘adjustments’ being made by YouTube.

The video at this link is nearly an hour long.  It’s one of those things that upon viewing the entire presentation, one can never be the same.

 Viewer beware.  For those with short attentions, fast forward to Time Stamp 22:50, for the meat.

Wyckoff stated a century ago ‘the reason for a move is always revealed after the fact’; we might find if IBB reverses from here and does not look back, the link above may ultimately become the ‘reason’ for such a move.

Imagine if this presentation becomes widespread knowledge … where will biotech be then?

Of course, price action is always the final arbiter.  Positions (and stops) remain unchanged.

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.

Crowded Trades

December 29, 2020 By in Biotech, BIS, GDX, IBB, LABD, Positions

Gold miner (GDX) bulls and bears have been fighting in a crowded trade since late November.

This morning’s GDX retrace up (and now down) from yesterday is a case in point. 

In such a choppy environment, inverse funds lose market value (downside bias) quickly and trades need to be avoided.

Meanwhile, on the other side of the market, biotech (IBB) has formed a top, reversed, and posted a new weekly low today.

An hourly trend-line has been formed as well (not shown). 

If it holds as (or if) IBB declines past current support (~152 area), that hourly trend is moving lower at just over -96%, annualized.

Maintaining negative trend, with declining momentum on both daily and weekly timeframes is what we’re looking for.

The objective (not advice, not a recommendation) is to move stops (shown below) and maintain the trade until stopped out or trend break.

As of this post (1:03 p.m. EST), the current price of LABD and BIS are listed in the ‘Close’ column. 

The “R-G/L” is from Dr. Van Tharp’s concept of Risk Gain/Loss.

Example:  If $1,000 of capital was “risked” (entry-to-stop) on the LABD, position, that position is now up by 6.83-R, or $6,830.

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.

Massive Market Distortions

December 28, 2020 By in Biotech, BIS, IBB, LABD

It’s hard to describe how stretched the market really is; how ‘the euphoria is so maximized’, as quoted by David Quintieri of the Money GPS.

His latest report, delves into published articles that contain one market stretched quote after another. 

Perhaps, the most frightening is: ”This does not feel like the top”.

You can find that report at this link.  The quotes listed above and more, start around the 1:40, time stamp.

In the markets as of this post (2:08 p.m. EST), biotech (IBB) continues to erode throughout the session. 

The firm has made one LABD (3X, Inverse) and two BIS (2X, Inverse) entries this session so far. Not advice, not a recommendation.

Note the stop progression on BIS entries.

Positions are below; 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.

Biotech Chart Nuances

December 28, 2020 By in Biotech, BIS, IBB, LABD

It’s been a while since biotech (IBB) was on the radar.

We’re going to look at the thirty-minute chart of 2X Inverse fund BIS, to show the change in character.

The first two oval areas after each up move in BIS (IBB down), was fully retraced. Not only that, the retrace occurred on the same day.

Not so with the last oval, today.

BIS has a changed character.  The thirty-minute bar was not retraced; telling us we’re at the danger point where the risk is least.

Both the weekly and daily MACD indicators show momentum has shifted; stalled (on weekly) and has turned lower on the daily.

As far as shorting the biotech sector, any takers?  It’s not like the other crowded trades; Dow, NASDAQ, S&P, and on.

As this post is being written BIS is edging back slightly to the entry point @ BIS, 22.23.

In so doing, there may be an hourly trend line forming.  If that happens, updates will be forthcoming.

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.

Trade Actions, Early Session

December 28, 2020 By in Biotech, BIS, DUG, IBB, LABD, Positions

A brief list of changes:

Exit as planned on DUST. Stop was hit

Trader’s discretionary exit on DUG:  Gain ~ 4.80%

Entered short IBB via LABD (3X inverse) and BIS (2X inverse). Not advice, not a recommendation.

The biotech sector has lost momentum. 

Weekly MACD has diverged and is now flat. Additional analysis to come.

Position table is shown below:

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.

Massive Volume: DUG

December 9, 2020 By in Biotech, BIS, DUG, IBB, XOP

Inverse Oil ETF, DUG volume went off the scale today; the highest in at least four years.

The short-squeeze top in the sector, using XOP as the proxy was identified before today’s open in this report.

At that time, there was nothing significant about either XOP, or the inverse DUG other than being at opposite price extremes.

Today’s action changed that view. 

Apparently the juncture was significant enough; Today’s transaction volume in DUG, amounted to approximately $23-million.

That’s a huge number. Typical action is around $4-million.

Oil is inversely related to the dollar at this point.  The dollar proxy, UUP reached a new trend low last week but seems to have found support the past three sessions.

Being short the oil and gas sector via DUG (not advice, not a recommendation) is essentially a leveraged bet on a dollar rally.

In other markets, after weeks of analysis and planning, biotech had its reversal but we’re not in it (on the short side) having exited yesterday.

Not to worry; the massive volume inflow to DUG suggests that we’re on the right track with who (or what) is going to be most vulnerable to a market reversal.

Biotech (IBB) price action may retrace upwards to test. If and when it does, we’ll re-evaluate.

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.

Before The Open: Biotech

December 8, 2020 By in Biotech, BIS, IBB, LABD, Positions

Bid/Ask spreads on Biotech (IBB) indicate a lower open.

From last night’s update, this was the expectation if we’re in the early stages of reversal.

Empirical observation over many months shows IBB, tends to move counter-trend for the first 90-minutes of trade … then resumes its original direction.

If that holds true for today (and we’re in a reversal), expect IBB to open lower and then attempt a move higher during the first hour and a half; right up to about 10:30 a.m. to 11:00 a.m. EST.

Note:  That’s empirical observation; typical market action for IBB. 

However, each day is different and price action itself has the final say.

Both accounts being managed already have significant positions (BIS & LABD) with a BIS stop @ 24.64 and LABD stop @ 27.63 in the market (not advice, not a recommendation).

Following Livermore’s approach (get in big … and do it early) the plan is to monitor price action for another opportunity. 

If somehow there’s a higher open for IBB, then we’ll wait for a lower daily low (to increase position) or be stopped out … whichever comes first.

It’s still quiet in the markets.  No one expects a major reversal.  Retail is all in (although insiders are selling en masse).

There are fundamental reasons why biotech may be about to crack (big time) but those reasons are for another report.  Here’s a preview.

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.

Early Session Update

December 7, 2020 By in Biotech, BIS, DUST, GDX, Uncategorized

It did not take long to be proven wrong.  DUST positions (in both accounts) have been exited.

Stated before, a 23.6% retrace is a rare event.  Looks like that’s holding true as price action for GDX now points to the 38.2% area. 

That corresponds to GDX trading to around ~ 38 … a long way to go higher.

Biotech, shown below is just 0.69-pts shy of target with price action (as of 10:34 a.m. EST) coming back to test the early session lows.

It’s traders discretion (not advice, not a recommendation) to determine if today is the day IBB finally reverses and confirms the bearish weekly MACD divergence.

 At this point, daily action has quickly retraced from the high of 149.31

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.

Before The Open

December 4, 2020 By in Biotech, BIS, Bonds, DIA, Holiday Turns, IBB, SPY

In the pre-market (8:52 a.m. EST) action continues to grind higher.  Both the Dow and S&P have posted new highs thus negating the Holiday Turns scenario … but not by much.

Important to note is each market continues to post on the underside of a long-term trend-line.  The Dow chart (DIA) is farther down this post.

Also added to the chart is the dashed trend-line underneath the recent price action.  A wedge is being formed; typically last stop before reversal.

In other markets, looks like Biotech may continue higher but along with the others, action appears labored.

The short position could be stopped out at the open. 

This area of price action is where cost of being wrong is least.  We’re at The Danger Point.

Update: 9:04 a.m. EST: Both AMGN and MRNA have now posted lower in pre-market.

Stopped out does not mean there’s no opportunity.  The bearish MACD divergence is still there.

If IBB continues higher, the original ‘150’ target is back in play.

The market extremes are still there:  Bonds and the Dollar are short the most in history.  Stretched all around.

It’s not unreasonable to expect several attempts to position short.

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: By the Book

December 3, 2020 By in Biotech, BIS, IBB, Positions

If during a reversal, price action comes back on contracting volume, the reversal has been tested.

Biotech, IBB has done just that.  It’s a near textbook example. 

Today was upward action. An exact Fibonacci 61.8%, retrace of the three-day move with volume contracting over 41% from the prior session. 

Under such conditions, there’s high probability of an immediate resumption of the reversal trend.

We’ll see if biotech (IBB) resumes the downward reversal at the next session; Tomorrow, Friday.

Market positions remain unchanged (not advice, not a recommendation) and shown below

Managed Accounts

Detail              Position         Stop

Short GDX     DUST             20.44

Short IBB       BIS                  25.46

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.