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.
Moderna, MRNA, is down -88%, from its all-time highs.
Having worked the markets for nearly forty-years, it (typically) goes as follows …
When a stock declines 80% or more, in short order (12-36 months or so), those with absolutely no analysis skills or discipline, who bought-in because everyone else is doing it (making a supposed fortune), have now lost their shirts.
So, they do what they know best, blame somebody else. Let the lawsuits begin.
The whole thing is so much like High School.
Class action is nothing new. What is new this time around, or what could be new, is the ‘discovery’ process.
One has to wonder if (or when) the lawyers are going to come across this piece of ‘discovery’.
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 XBI, spent the last three months hitting resistance, going nowhere.
That doesn’t mean there weren’t trading opportunities; there were but the big (expected) break to the downside never came … that is, until now, maybe. 🙂
Looking at the weekly chart, it’s completely different from the current, topping, on-going A.I. mania.
Biotech reached its all-time high, years ago.
Biotech XBI, Weekly Close
The sector’s been retracing to Fibonacci 38.2%, since late February, this year.
Moving in closer to the daily, the last three (short) trades in the sector are noted (not advice, not a recommendation).
Biotech XBI, Daily
For detail on how and why trades were selected, click on the side bar for that trade number.
Note: We have a repeating pattern (between green lines) of ‘spring-to-up-thrust’.
The Week Ahead
Anything can happen.
With that said, ‘normal’ market behavior would be a ‘blip’ upward to test resistance, the black line.
However, there’s no requirement to do so.
If price action gets above Friday’s high, obviously it’s time to exit (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.
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.
Wyckoff (tape reading) analysis identified the potential reversal in XBI.
In the past two days of trading, biotech XBI, is decisively lower (not advice, not a recommendation).
However, there’s more to this story.
As we’ll see below, Fibonacci is at work as well.
Biotech XBI, Daily Close
From closing high on 2/27/24, to closing high on 9/19/24, was a Fibonacci 144 days (minus one).
Ladies and Gentlemen, it doesn’t get much better 🙂
The black lines show resistance penetration, up-thrust and reversal.
Livermore, Wyckoff & Loeb
The trading methods of the three market masters above, can be summarized as:
Strategy, Tactics and Focus.
Livermore’s method of ‘what’s going to happen in a (potential) big way’, pointed to biotech.
Wyckoff’s analysis was used to identify (to the day), the potential for a significant reversal.
Loeb, who is less known, was the former Vice Chairman of E.F. Hutton, disparaged ‘diversification’ as the ‘averaging of errors’; meaning, if you don’t know what you’re doing (in the markets), you ‘diversify.’
We can see all three at work in the selection to go short biotech via LABD (not advice, not a recommendation).
Fixing Errors
For those watching, you got to see up close and personal a trading error on shorting the SOXX; specifically, an -11.6%, hit, link here.
As of this post, four trading days later, that loss has been fully recovered and then some.
This is how should be done.
Clear the mind, look for (don’t force) another opportunity, get to back to business.
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.
It was just four days ago, the mainstream (in this report) was telling us, be on the lookout for a biotech breakout.
That was then … here we are now.
Price action in XBI, attempted to break higher at the Fed announcement.
That move appeared to fail by the end of Wednesday’s session … then came Thursday’s launch higher.
However, that move may have failed as well.
Biotech XBI, Hourly
At this point, we’ve posted a Wyckoff Up-Trust (reversal).
If this is a significant reversal, we’re still in the very early stages; at The Danger Point®
Positioning
As can be seen in the sidebar, a short position was opened (yesterday), LABD-24-18.
That position has been increased in size during this session (not advice, not a recommendation).
The SOXX (short) Exit.
Yesterday, SOXS-24-16, was exited with an -11.6%, hit; so, everyone can see the effects of breaking one’s discipline (not respecting the position stop).
Don’t force the trade … sounds so simple.
Getting back to work, the XBI false breakout was recognized early and the trade opened.
Today, so far, we have follow-through, confirming the reversal.
Bonds Continue Lower
Bonds, TLT, are currently posting an outside-down (reversal) on the weekly timeframe.
The last time there was an outside-down on the weekly, was over two-years ago; week of August 5th, 2022.
After that, bonds declined a whopping 32% before (slightly) recovering.
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® 