Category Archives: Biotech

Biotech Breakdown

August 24, 2020 By in Biotech, IBB, S&P 500 1 Comment

Biotech is breaking down, now.

For this firm, going short has been an on-again, off-again, back on-again affair.

Fotosearch_k16630038-borderThose with engineering degrees (including this author) or some other science degree, would have decided long ago, since the original entry’s not perfect (being stopped out), the idea must be wrong.

Others easily distracted (those with i-phones) would have given up as well … only to see their (short) premise come to fruition without them.

So, here we are.  Biotech (IBB) is breaking down with inverse BIS moving higher while the overall market continues to rise.  As of this post, the S&P 500, is up 25-points or about +0.75%.

The chart and the expanded insert, show trading activity over the past two weeks.

2020-08-24_10-04-52-BIS-Daily-5-bar-notes-insert-notesPrior to the ‘exit’ point shown, we’re positioned long BIS (short biotech).  Then, price action broke down through the prior day’s low.  BIS was exited entirely.

Almost immediately after the break, the down-side price bar was challenged with up-side action.

After that, next day saw even more upside.  When new daily highs were posted, BIS was re-entered.

Two days later, last Friday, the trade was increased by 7%.  Just topping it all off for what amounts to a full position.

Since we’re using trading techniques from early masters, the last two months or so, mimic actions that may have been taken by Livermore or Wyckoff.

Not saying we’re in the same league as them.  Just saying based on their writings, the approach mimics documented trading behavior in the markets of their time.

At this point and being fully positioned, we wait.  Livermore put it as:  “Get right, and sit tight”.

An obvious stop level is anything below today’s BIS low of:  33.01.

 

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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.

Corn Flattened

August 19, 2020 By in Biotech, Corn, Derecho, Gold & Silver, SLV 12 Comments

Ten percent of the U.S corn crop was instantly wiped out last week during what’s described as an inland hurricane.

The video here goes into more detail about correlating events.

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To limit the food supply even further, driving prices higher under the guise of inflation, the ‘speck’ (time stamp 6:00) has invaded 100% of tested agriculture workers in California.

The corn ETF mentioned at Time Stamp, 4:16, in the linked video is shown below:  CORN is the ticker symbol.

The ‘derecho’ breakout is clear.  Currently, CORN price action has retraced slightly and is testing support levels.

2020-08-19_9-20-04-CORN-Daily-4-bar-notes

In separate markets, biotech (IBB) has posted another sell, sell-short signal with this session’s new daily low (not financial advice).

Silver is reversing as expected.

Whether or not this is just the beginning of a long down move to form new lows (for SLV), is unknown.  Of course, such a position or thought is, completely opposite the consensus view.

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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.

Shorting The Bond Market

August 17, 2020 By in 1987, Biotech, Bonds, Interest Rates, Lumber, Real Estate, S&P 500

Who goes first?  Do bonds break to the downside, rates up, market reverses lower into a potential crash; a-la October 1987?

Or, does the market (S&P 500) peak and reverse with a flight to safety (bonds) that mitigates or negates a sharp rise in rates.

Fotosearch_k6354877Maybe it’s stocks and bonds going lower together.  No safe havens.  Is it possible?

Early this session, the ten-year rate (inverse of bonds), is hovering just below the trend-line shown in the last post.

The bond bull market has lasted forty years.  Since 1980.  Obviously, at some point, it’s over.

With long bonds (10-yr, 20-yr) hovering near a breakout to lower levels, all it would take is some kind of ‘event’ to tip the scales.

Remember that Prechter  (no matter what you think of him) said years ago, the market leads the news … not the other way around.  It’s a complete mind-shift to understand that market position, price action, actually set the conditions for news events.

The market does not ‘react’ to the news, it ‘creates’ the news itself.  So, the bond market may be about to create an event.

With that in mind, inverse fund TBT attempts to give exposure to twice the downside of the 20-year bond.

In a nutshell, if the long bond moves lower, TBT moves higher at approximately twice the percentage amount.

The chart of TBT is below and it looks very similar to the $TNX chart in the prior update.  Looking closely, one can see the downward bias errors.  With each move lower in the $TNX, the TBT moves lower still.

It’s common with all inverse funds.

2020-08-17_9-07-32-TBT-Daily-3-bar-notesEffectively trading TBT requires a sustained down move in the corresponding market (to mitigate the down-bias).  The latest example shows bonds ready to break lower with rates ($TNX) moving higher.

TBT could be in a position for trade entry (not advice).

Additionally, if bonds break decisively lower, they have potential to stop dead what’s left of the economy:  Housing market, lumber market, building construction, and on.

Remember ‘the speck‘.  It’s all about the speck floating through the air.

On a separate topic and as a courtesy (not financial advice), the short position in biotech via BIS, was closed early this session as price action hit the pre-determined 8.15, stop.

Gain on the overall short position was about 5%.

 

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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.

Downside Leader

August 11, 2020 By in Biotech, IBB, S&P 500, Uncategorized

Two months ago in this post, the idea was floated that biotech, IBB may be the downside leader.

It certainly didn’t look like it at the time.

Biotech even went on to make a new high … potentially negating the theory.

shutterstock_146355983It’s different now.

After that new high, IBB has reversed and is trending lower.

On the other hand, the overall market, S&P 500, continues its push upward.

It’s within 1% of all time highs.

Pre-market action as of this post, has the S&P opening up about 0.4%, higher … ever closer.

At this juncture, biotech has hinted at downside leadership.  That hint my become a solid fact if and when the S&P has a decisive downside 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.

Amgen (AMGN) Breaking Down

August 6, 2020 By in AMGN, Biotech, IBB

Amgen’s the heavy hitter, the leader in the biotech sector.  It’s by far the largest cap equity in the IBB, ETF.

Right now, AMGN is pushing down through support; confirming a down trend that essentially started on July 28th, last week.

shutterstock_793257808At this juncture, AMGN price action’s at the danger point. It can go either way with a confluence of orders; buy, sell, and sell-short.

If the trend-line (chart below) is not broken to the upside, AMGN is moving lower at a whopping -90%, on an annualized basis.

As stated, the firm sponsoring this site is heavily short in this sector; increasing the short position on a near daily basis.

Obviously, this is not a recommendation.  We can’t do that as stated in the disclaimer below and here as well.

The inverse fund BIS, that’s being used to position short as with other inverse ETF funds can blow up (or fail) unexpectedly.  We’re well aware and cognizant of the conditions under which that type of anomaly may occur.

At this point, BIS is ‘well behaved’.  However, BIS may be exited at any time and without notice.

By this time it should be quite evident that we (U.S. citizens) and the rest of the world are smack-dab in the biggest, most dangerous farce in world history.

Anyone with two synapses rubbing together can see there is ‘no scientific evidence of anything’, stated at time stamp 9:22, in this link.

2020-08-06_10-40-48-AMGN-Daily-5-bar-notes

If or when the truth-cork finally pops out of the bottle for all to see, it’s too late.  The emperor has no clothes.  That emperor is biotech.

Recognize in the markets, anything can happen.  It’s possible and likely probable another false narrative will be launched to manipulate the weak.  The current narrative is losing effectiveness.  If so, the next one has to be even more outlandish.

Alien invasion anyone?

Back to biotech.  If AMGN breaks its trend to the upside, the reversal scenario is either negated or modified.

Trend-line break or not, there’s a false narrative at play.  Those not able to see and those not willing to take action, risk being swept away with the tide.

 

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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 Hard Road

July 31, 2020 By in Biotech, IBB

Positioning short in the biotech sector (IBB) has not been popular or easy.

Mass hysteria, world-wide hysteria has completely overtaken biotech in a (potentially futile) search and reward for ‘the cure’.  More on that farther down.

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Even before the current stampede, biotech was analyzed by David Stockman and his staff, way back in 2015.  He surmised the entire entourage was nothing more than ‘$2-trillion dollars of bottled air’.

So, if that was then, what about now? 

Now, there’s no ‘price discovery’ of any kind in the equity markets.

There hasn’t been any real discovery for decades … going all the way back to the aborted Head & Shoulders pattern from 1998 – 2002.

Remember that?  A floor was mysteriously put in right at the neckline breakdown, (October 2002) so the market could not go through a much needed washout.

That was potentially the start of major manipulation to ever higher levels and ever bigger bubbles.

So, here we are.  As of this post, after two and a half months of topping action, IBB is in a decisive breakdown.  If it closes at current levels (IBB, 133.57) or below, it not only has downside follow-through from last week’s reversal, it will post a monthly reversal bar as well.

What about ‘the cure’?  Won’t that provide massive profits for the corporations implementing ‘the plan’?

The truth is, it’s getting harder to suppress the truth. 

At this juncture, YouTube, Facebook, Bit Chute and others are playing whack-a-mole with the fact that a resolution to the current situation is not only simple, it’s cheap; Exactly the opposite of the ‘desired’ outcome.

On top of that, one has to consider enough of the public has been fleeced and enough money has been made to the upside, that it’s time to position for downside action.

If we’re to get a sustained reversal, expect the usual suspects to appear; namely, news reports, analysis and recommendations that foist reasons why profits may not be as good as expected.

This is the way the game is played. 

Anyone analyzing P/E ratios, sales numbers or any other fundamental as a ‘reason’ for price action, is living in an alternate universe.

Only time will tell if we’re at a major inflection to the downside.  In the meantime the firm sponsoring this site is heavily short the sector via BIS (not a recommendation).

Note:  The current short position can be exited at any time without update or notice.

Inverse funds are tricky. They have a built in downside (price) bias resulting from expenses maintaining the fund.  They literally can blow-up at any time during an adverse move as was seen with inverse funds DUST and JDST (late March ’20).

These vehicles are absolutely not suited for the ‘average investor’ and even the professional can get impaled on a blow-up every now and then.

 

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 Breakdown … Test

July 27, 2020 By in Biotech, IBB

It’s early in the session and biotech (IBB) is testing its reversal breakdown.

This is typical market behavior and for the astute trader, allows a potential low risk opportunity to the short side.

shutterstock_602951669A test may take a few moments or several days.  The market itself defines the time-frame.

The daily chart (below) of IBB, shows a wedge pattern that encountered a ‘throw-over’ and reversal back into the trading range.

A wedge typically occurs at the end of a long-term move, whether up or down and throw-over with return, is a classic time-tested sell (or sell short) signal.

We’re past that signal and have yet another; the test of the underside wedge.

The initial measured move target is shown which if met, puts IBB below several key support levels that would then become resistance.

2020-07-27_8-44-43-IBB-Daily-3-bar-at-open-notes

Reported over the past couple of months on this site is that we’re looking for a strategic long-term reversal in biotech.

Of course, there’s no guarantee of that reversal. 

Each ‘test’ is an opportunity for price action to fail the set-up.  It’s the way of the markets.

As a result, the professional trader or speculator is in a continual state of discomfort.

That’s probably why, years ago in an interview, Robert Prechter Jr. stated that some of the best traders he knew were former Marines.

Short vehicles for IBB (not a recommendation) are BIS (2X inverse) and LABD (3X inverse) which are two well known funds as well as just shorting the ETF directly.

 

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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.

Mission Accomplished!

July 21, 2020 By in Biotech, MRNA 1 Comment

One day after Pump-n-Dump?, MRNA launches above and closes above resistance on record volume of 103-million shares.

Next day, price action closes below resistance and the trap is set.

2020-07-21_9-49-12-MRNA-Daily-3-bar-notesYesterday (Monday) at the open, MRNA gaps lower -7.4% and didn’t look back.  It closed down -12.83%.

Today, another gap lower.  Price action is hovering in what appears to be an attempt to stabilize.  The question is, stabilize for what?

It probably doesn’t matter as the professionals may have finished their directive.

That is:  establish long positions at low prices, generate news events to get the general public excited, continue to foment the price higher, go all out with maximum volume, exit the longs and establish the shorts.  After that, price action takes care of itself.

That’s the way it works 

Anything can happen and even more (bullish) volume can come from somewhere to drive the price to new highs.

With that in mind, there’s a possibility of an underside test of resistance.  Expectations are that such a test (should it occur) will fail and price action continue lower.

It’s likely we’ve seen the top of MRNA.

 

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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.