Category Archives: Biotech

Biotech … ‘Follow The Money’

March 11, 2025 By in $SPSIBI, Biotech, LABD, LABD-25-02, Positions, SPBIO, XBI

Confirming The Channel … Down

Today’s action in biotech, best describes why it’s the only active short trade; detailed here (not advice, not a recommendation).

This update gave a hint at the expectation; the ‘spring’ set-up would fail.

It was a little bit early … but here we are.

Today (as of 11:29 a.m., EST), XBI posted a new daily low, threatening to post a new weekly low.

Biotech XBI, Daily

The potential channel includes a blue dashed centerline.

A failed move whether up or down, gets the attention of The Street.

Anything can happen, XBI could recover to the upside.

However, there are three successive trendline hits on the right channel line; probabilities for downside, are higher than for up (not advice, not a recommendation).

Stay Tuned

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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 Danger Point®, trade mark: No. 6,505,279

Then, Alcoa Is ‘Compressed’

March 9, 2025 By in $SPSIBI, AA, Basic Materials, Biotech, CVNA, GDX, GDXJ, Gold Miners, IYM, NEM, Prechter, RGLD, South Sea Bubble, SPBIO, XBI

Another One

Yesterday, biotech had moving average compression; today, it’s Alcoa.

In this case, we’ll present the monthly chart, showing the long-term picture.

As we’ll see, moving average compression is rare, especially when using the longer time-frames.

In the case of Alcoa (AA), you have to go all the way back to 1978, to find a similar event.

The Big Bubble

Referring to Prechter’s analysis link here, he states that we’re [potentially], in the largest asset bubble since the South Sea, over 300-years ago.

Let’s keep that in mind. Events are happening on such a massive scale; the typical observer may not be aware of the significance and/or the rarity.

Alcoa AA, Monthly

The zoom areas are side-by-side to show the similarity.

Expanding the chart and including the wedge notation, also shows price action at the lower boundary.

It should be noted, AA, is part of the ‘Basic Materials’ sector, with tracking ETF as IYM.

Included in the IYM components, is NEM, and RGLD; this sector is correlated with the miners, GDX, GDXJ.

Positioning

It’s the trader’s discretion as what to do at this point.

This site may or may not execute a direct short of Alcoa, just as it might do with Carvana (CVNA), and maybe others (not advice, not a recommendation).

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.

The Danger Point®, trade mark: No. 6,505,279

Moving Average ‘Compression’

March 8, 2025 By in $SPSIBI, 2007 - 2008, Biotech, LABD, LABD-25-02, Positions, SPBIO, XBI 1 Comment

Biotech, At The Pivot?

The basic idea around Moving Average ‘Compression’:

The market’s oscillated itself over a period of time, to possible point of inflection.

In the example below, with the weekly chart of biotech XBI, this type of compression is rare.

The last time MAs were this compressed (using 50, 100, 200 EMA) was over fifteen years ago, in late 2009.

Biotech XBI, Weekly

Moving in closer, we have an obvious ‘centerline’, and then potential outer channel lines.

Fibonacci time correlations for pivot points, as noted

There’s also resistance around the 88 – 89 range, to be covered in a later update.

Positioning

As stated in the last update, the short position in biotech XBI (via LABD) is the only open position (not advice, not a recommendation).

The major indices were lower over the past week and ‘normal’ action would be some kind of upside to test.

However, as that last post highlighted, there’s (at this point) no ‘Trump Put’; there are no indications the market will be supported as was done with the ‘Fed Put’ after the ’08 – ’09, meltdown (not advice, not a recommendation).

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.

The Danger Point®, trade mark: No. 6,505,279

Trump’s ‘Not Looking’

March 7, 2025 By in $SPSIBI, 1987, 2007 - 2008, Biotech, GDXJ, Gold & Silver, Gold Miners, JDST, JDST-25-04, LABD, LABD-25-02, Positions, SPBIO 3 Comments

Not Political … Just Fact

The last time we had a sustained multi-year meltdown (’07 – ’08), there was a ‘ban’ on short selling.

Since Trump is ‘strictly business’, will he try (or instruct the SEC) to save the market?

Based on this link, maybe not (not advice, not a recommendation).

If that’s true and there are no ‘saves’ this time around, then we’re in uncharted territory; at least since the ’87 crash.

Gold Miners ‘Bid’?

The rest of the market’s breaking down, but the miners are holding steady (sort-of). They look like there’re headed for at least one more push higher.

Junior Miners GDXJ, Daily

We’re including the MACD, to show if there’s a new high above the 53.00 – level, it sets-up a (potential) bearish MACD divergence.

This coming Tuesday, is Fibonacci Day 8, from the February 28th lows.

Positioning

The short trade JDST-25-04, was stopped out early in the session. No other shorts are planned for this sector … yet (not advice, not a recommendation).

Short trade in biotech XBI, remains active as LABD-25-02, with stop at LABD 7.44 (not advice, not a recommendation).

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.

The Danger Point®, trade mark: No. 6,505,279

Biotech Looks Ready … For Lower

March 5, 2025 By in $SPSIBI, Biotech, GDXJ, JDST, JDST-25-02, LABD, LABD-25-02, Positions, SPBIO, Wyckoff, XBI 2 Comments

Breaking Down … Finally?

You have to wonder, is the curtain ever going to be pulled back on biotech?

If we use the empirical trading adage, ‘When price goes south, bad news comes out’, we may be getting close.

Biotech XBI, has gone sideways for months; oscillating in a trading range; that is, until now.

Biotech XBI, Daily

Two charts are presented. The first is a compressed view of the daily action, showing the trading channel.

The second is a closer look, with potential down-trending channel.

The two magenta lines correspond to the blue lines in the first chart.

Note how XBI, penetrated support and by definition, entered a Wyckoff ‘spring’ condition.

The market response was to initiate a rally but today, that rally appears to be failing (not advice, not a recommendation).

Positioning

First, some housekeeping.

Short trade on miners GDXJ, JDST-25-02, was closed at about break-even.

As of this post (11:48 a.m., EST) GDXJ, is just penetrating resistance at 51 to 51.5 … a potential up-thrust set-up.

Now, on to biotech

Short trade initiated in biotech via LABD, labeled as LABD-25-02, with stop at the LABD session low (not advice, not a recommendation).

Stay Tuned

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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 Danger Point®, trade mark: No. 6,505,279

Real Estate … Dead at Resistance

January 17, 2025 By in $SPSIBI, Biotech, DRV, DRV-25-01, IYR, LABD, LABD-25-01, Real Estate, SPBIO, Spring-to-Up-Thrust, Wyckoff, XBI 1 Comment

Repeating Set-Up

Real estate (IYR) has pushed higher above resistance and stopped dead; currently trading in a very narrow range.

It wouldn’t be all that interesting if price action was not in a repeating set-up:

Wyckoff Spring-to-Up-Thrust

Click on the side bar under the same name to see all posts related to this set-up.

Note: A set-up does not guarantee anything.

It’s just a market observed phenomenon that may result in a directional move (not advice, not a recommendation).

Real Estate IYR, Daily

There it is:

This is what’s called The Danger Point®

The risk of being wrong on a short position is at its least (not advice, not a recommendation).

Positioning (updates)

Biotech XBI is spending a lot of time hovering around support and not progressing downward (no matter all the Fibonacci correlations).

With that, LABD-25-01 was closed at slightly above break even (not advice, not a recommendation).

Real estate IYR was entered short early in the session via leveraged inverse DRV, as trade DRV-25-01. Stop for the trade is currently the session low. (not advice, not a recommendation).

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.

The Danger Point®, trade mark: No. 6,505,279

Economic ‘Implosion’

January 15, 2025 By in $SPSIBI, Biotech, Great Depression 2.0, LABD, LABD-25-01, SPBIO, Uneducated Economist, Wyckoff, XBI, ZeroHedge Tags: , , , , 1 Comment

Collapsing On Several Fronts

‘Retail’, selling silver, link here.

Jewelry whacked, link here.

Loan Shark, link here.

You know it’s bad when booze takes a hit, link here and here.

Producer prices launch higher, link here.

Lumber prices collapse, again, link here.

Travel restrictions, link here.

Then, there are ‘valuations’, link here.

Also then, there’s this, link here.

Lastly, short squeezes and liquidity traps … bear market behavior, link here.

Speaking of ‘short squeeze’, we had biotech do just that in the pre-market (and regular) session.

Biotech XBI, Daily

If it really is/was a short squeeze, once shorts are covered, the expectation is for price to continue lower (not advice, not a recommendation).

Included in the chart, is a bit of insight you’re not likely to find anywhere else.

Note the distance of each retrace after a leg down. Less each time and Fibonacci multiples.

As stated yesterday, XBI posted outside down. That means price action penetrated the lows of the prior session and closed lower.

As wild as it may seem, penetrating the lows and closing lower, put XBI in Wyckoff ‘spring’ position.

That’s what we saw with today’s action.

As this post is being created (11:45 a.m., EST), XBI action continues to erode to the downside currently trading at the 87.60 – area.

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.

The Danger Point®, trade mark: No. 6,505,279

Downside Leader … Biotech

January 14, 2025 By in $SPSIBI, Biotech, IBB, IWM, LABD-25-01, Russell 2000, SPBIO, TZA, TZA-25-01, Wyckoff, XBI, ZeroHedge Tags: , , , , 1 Comment

Confirming, Right-Side Channel

It’s a recurring theme with biotech.

Over and again, this sector (IBB, XBI) is not participating in tandem with the other major indices.

Today’s pre-market mayhem higher over supposed slower outlays of possible trade tariffs to happen some-time, some-day, caused the major indices to launch upward. 🙂

Well, everybody seemed to be blasting higher except one sector, biotech.

Wyckoff Directed Action

No matter what the ‘narrative’ may be, Wyckoff analysis directs us to look at what the market is actually doing, then interpret the action.

Early after the open, trade TZA-25-01, was exited, +8.9% gain, short position opened in biotech via LABD, Trade: LABD-25-01 (not advice, not a recommendation).

Biotech XBI, Daily

Today posted outside down, taking out both the high and low of the prior session.

Note the trading channel and width, Fibonacci 13-Days.

Also note the two ‘breakaway gaps’. The second one on January 10th, much wider than November 12th, last year.

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.

The Danger Point®, trade mark: No. 6,505,279

Dow … Down

January 2, 2025 By in $SPSIBI, Biotech, DIA, Dow 30, DXD, DXD-25-01, LABD, LABD-24-21, SPBIO, Wyckoff, XBI Tags: , ,

Adjusting The Short(s)

For the Dow 30, the ‘January Effect’, lasted less than an hour.

From then on, it’s been decisively down.

The biotech sector on the other hand, was and is still (as of 1:30 p.m., EST) higher for the day.

Trade LABD-24-21, was exited with +14.52%, profit (not advice, not a recommendation).

Dow 30 (DIA)

Price action is posting outside-down for the day with just over two-hours before the close.

The important part, Dow (DIA) upside was limited when compared to biotech.

Wyckoff said a century ago, we must adhere to what the price action is telling us; no matter our ‘opinion’, the action is always right.

With that said, short trade DXD-25-01, was initiated (not advice, not a recommendation).

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.

The Danger Point®, trade mark: No. 6,505,279

Biotech, Accelerates … Down

December 31, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-21, Livermore, SPBIO, XBI, ZeroHedge

A New Trendline?

Well, ladies and gentlemen, it’s like the Keystone Cops out there.

One side doesn’t think anything bad is going to happen.

The other side, says there’s an implosion coming, if not already here.

Yet another, somewhat honest, saying it doesn’t know but that it will be ‘messy’.

How about we just look at what the market’s actually telling us. That’s a novel idea. 🙂

Iterative Process

As the year comes to a close, it’s (now) obvious, what took place for most of 2024, was a process of iteration.

Working to position for the downside was not the question. Identifying the ‘best opportunity’, was.

Strategy Re-Cap:

Using Livermore’s insight, we assess ‘general conditions’.

With that, came the bearish stance. Then, what tuned out to be an iterative search for (short) opportunities.

That search culminated with trade LABD-24-21, still active (not advice, not a recommendation).

So, here we are.

Biotech XBI, Daily

We’re about two-hours before the close; XBI, has posted a new daily high, and low, threating with ‘outside down’.

We can see the potential ‘channel-within-a-channel’.

The Weeks, Ahead

The coming weeks may hint at what’s likely for the year.

If we don’t get a ‘January effect’ or it gets negated, that in itself gives us a bearish clue (not advice, not a recommendation).

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.

The Danger Point®, trade mark: No. 6,505,279