“Fuel” For The Downside
Once this next level gives way, carnage will (likely) reach all-time records.
Over a centry ago, Wyckoff said in his writings, it’s those on the wrong side of the bull trade, who provide the fuel on the way down.
As reported by Reuters, that downside fuel appears to be building on a massive scale.
The Fed This … The Fed That
What a colossal waste of time … that is, trying to figure out what The Fed is, or is not, going to do.
As The Maverick reports in this update, The Fed has a higher authority. It should be no surprise to any of us at this point … they’re ‘just following orders’.
Mirroring that sentiment is Dan from i-Allegedly, saying ‘This is not the bottom‘.
Part of the reason there’s so much focus on earnings, financials and The Fed, is that it’s a whole lot easier to do that, than actually getting down to work and learning price action.
That my friends, as Wyckoff said in his text Studies In Tape Reading, ‘takes many years and many losses’.
So, let’s take a look at what that ‘tape’ is telling us concerning the biotech market.
Biotech Inverse BIS and LABD
The prior analysis on IBB, is still valid.
However as was done with real estate, changing from 2X inverse to 3X inverse, the same has happened with biotech; from BIS, to LABD.
Since the overall bearish assessment has not changed, this morning’s upward move in the markets was used to re-position to a higher (inverse) leverage vehicle … LABD (not advice, not a recommendation).
The hourly charts below show the exit of BIS and the entry of LABD.
Biotech 2X Inverse, BIS
Biotech 3X Inverse, LABD
As this post is being written 12:55 p.m., EST, price action’s at the danger point.
We’re at the extreme; the risk is least but price can go either way.
Watching that action in real time, it looks like LABD wants to go higher; currently trading at 57.20-ish.
If LABD is higher, that means SPBIO, is moving lower.
Unless price action of biotech (IBB, SPBIO) and the overall markets signal a change of behavior … the bear move is still in play.
If we get a significant break lower, ‘retail’ that’s not positioned properly, will provide the majority of downward thrust energy.
It’s no different than it was in Wyckoff’s time, over a century ago.
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