Biotech … Squeeze or Test

Maybe, Both

If we look at it from the perspective of an up-thrust test, as we’ll do below, such tests if they don’t fail are the precursor to dynamic moves.

At the minimum, today’s action allows the stop to be moved on short position LABD-22-03 (not advice, not a recommendation).

It’s interesting, the biotech sector both IBB and SPBIO, with inverse funds BIS, and LABD, respectively are the only ones taking a major hit today.

Using a cue from Nicolas Darvas and his observations (as a dancer), the market will initially go opposite its main direction as if to get ready for the move; like a dancer crouching down before lifting the female partner.

That may or may not be the case now, as we’ll see below.

Biotech SPBIO, Weekly Chart

Next, we’re going to invert the chart (to mimic inverse LABD) and then label the up-thrust as a Wyckoff ‘Spring’.

Biotech SPBIO, Weekly Inverted

Next, we get closer to the action as shown.

Is the ??? area, a test or a failure of the set-up?

The short answer with about 90-minutes to go before the close, is unknown.

If SPBIO, closes down for the week, painting a red bar, probabilities are to the downside.

Closing higher for the week starts to bring a potential failure of the trade into question.

Summary

No matter what happens, the stop on the short position via LABD is going to be moved to the low of this session; currently LABD 49.90 (not advice, not a recommendation).

We may get into speculation later, on why biotech seems to be the only index in a major squeeze, preparing for downside.

Some who monitor this site, and those ‘awake’, may already have a good idea as to the potential why.

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 Free-Fall

Anecdotal Data, Says Implosion

As we speak, economic activity is shutting down … fast.

Amazon shipments cancelled, gas stations going dry, banks halt lending, real estate sales collapse.

Meanwhile, the market’s in a short-squeeze.

What happens next?

We’ll discuss real estate and biotech farther down but first the data sources.

Dan from i-Allegedly reports here, he still has a couple of rubes (my word) that think the market just bottomed out.

Good luck with that.

As we’ll show below, the real estate bear market (IYR) rebound, was identified ahead of time.

Next, we have Red Hurricane describing one semi-trailer load after another being cancelled. He hauls for Amazon.

Shipping activity’s contracting, seemingly, by the minute.

Lastly, this link where the D-word, ‘Depression’ is used within the first one-minute, twenty seconds.

Bottom-out in the stock market? Probably not.

So, let’s take a look at real estate IYR, and see where it might go next.

Real Estate IYR, Weekly Chart

The last update (link, here) showed potential to rise into a test of resistance. That’s exactly what happened.

Back then:

And now:

With zoom

Obviously, the upward test happened much quicker than anticipated … but it was anticipated … no surprise.

Real estate got itself into Wyckoff spring position; so, a rebound (test) is normal market behavior … short-squeeze or not.

If it was a squeeze and if it’s over, we can expect an immediate drop in price action. We’ll analyze that as it plays-out in the coming week.

Now, on to biotech, SPBIO

Biotech SPBIO ($SPSIBI), Weekly

Some housekeeping first.

Obviously last week, with being short, more downside action was anticipated resulting in upside for LABD.

On Friday, that did not happen. Biotech was part of the squeeze as well.

The short position via LABD, identified as LABD-22-02, was reduced but not exited completely (not advice, not a recommendation).

At present this is where we are.

First, we’ll start by inverting the chart to mimic the action of 3X inverse, LABD.

Next, we’ll zoom-in and highlight the ‘squeeze’.

Doesn’t look like much when viewed that way does, it?

Next, we’re going to zoom-in, on the zoom

In spite of all the squeeze chaos on Friday, price action could not post a new weekly low (high on the non-inverted).

We’ll see this Tuesday, if that’s important or not.

This post is getting long but let’s end with the rule of alternation. The same chart is marked up below.

If this rule is still in-effect, we’re at a juncture where one can expect a ‘simple’ alternation.

We’ve already had complex action on the prior congestion; so, we can expect current action to be simple in character.

That means, price action’s not likely to stick around at these levels whether it’s going up or down.

Based on the above analysis, the expectation for Tuesday’s open is a gap lower for SPBIO and higher for LABD.

If that does not happen, something else is at work … we’ll report on that as necessary.

Summary

Has the market bottomed out? Not likely.

Those who are at this late stage, still arguing with Jerimiah Babe and Dan (and Patera), that the market’s rebounding, everything’s fine, are in a state of delusion.

The mindless herd following spending with ever newer cars, moving up to the McMansion, opulent vacations, posting it all on Facebook is most decidedly, gone.

It’s finished. It’s Done.

The problem is, as J.B. notes above (time stamp 7:15 and 8:30), those still living that life don’t seem to know it’s over.

For the leaders, the tiny minority and those reading this post, who are, or who have been preparing for years, it means potential huge (life changing) opportunities.

That is, as long as the markets, the banks and other infrastructure stay open; not guaranteed in any way.

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

‘Investors’ Buy Dip Over & Over

“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.

Summary

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.

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 … The Breakdown

Wedge Break Has Been Tested

It’s been a while since we’ve talked about the chief cook and bottle washer in this whole financial collapse scenario.

However, biotech has not been forgotten.

There are two indices (ETFs) being tracked: IBB and SPBIO.

Both entered bear market territory long ago. SPBIO topped out, way back in February 2021; IBB topped later, in August the same year.

Leveraged inverse funds are LABD, and BIS, respectively. LABD is 3X inverse with BIS a 2X inverse.

The Long Term

One thing unique to David Wies, was to look at the long term: Monthly, Quarterly and Yearly charts.

Doing so, puts one in a strategic mindset … not easily swayed by the latest prattle from media sources.

If we look at biotech, IBB, on a quarterly basis we have the following chart.

Biotech IBB, Quarterly

The mark-up of this chart is where it gets interesting.

A terminating wedge that’s been over seven years in the making has just broken to the downside.

Not only that, when we get closer-in (on the weekly), we can see the wedge break has been tested and now today, appears to be reversing to the downside (shown on daily).

Biotech IBB, Weekly

With zoom

The daily shows a Fibonacci retrace to 38%; then today, a downside reversal.

You can see where this is going.

Based on the above analysis a short position in IBB, has been opened via BIS (not advice, not a recommendation).

The trade is BIS-22-01, with an (initial) entry @ 28.5173

Summary

The news on specific biotech companies is already out if one knows where to look.

Stated time and again on this site, we’re just in the beginning stages of the repercussions.

It even looks like they’ve moved on from the initial scam and are cooking up a new one.

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

‘Heart Failure’ … The New Normal

… What It Could Mean For Biotech

So, now it starts.

This just out from ZeroHedge, linked here, shows the ‘elephant’ has begun to go mainstream.

Another chess-move.

At least one previous post (No.1, linked here), has shown the phenomenon is not a one-off event.

Now, according to the link above, there’s an estimated 300,000 affected … and we’re just getting started.

Insiders Sell … Retail Buys

Do those at the highest levels know their customer base is about to evaporate on a world-wide basis?

While they may not know every detail, they at least know something’s up. Steven Van Metre discusses the insider selling in his latest update, linked here.

Front End Phenomenon

We’re still at the beginning stages of an event that in the opinion of this author, is going to last the lifetime of those reading this post.

‘Hyperbolic statement’ one might say.

To that, I would counter with this; when it was posted, the ‘elephant’ was hyperbolic as well.

Now? Not so much.

Keeping that long range thinking in mind also keeps one from choosing the ‘insane’ human behaviors discussed by Dan (I Allegedly) in his latest post.

So, let’s take a look at what type of insanity we have going on in the markets today.

Of course, that points us to our chief cook and bottle washer, biotech (IBB).

Biotech, IBB

When we last left our hero, savior, and protector of all that is natural immunity, the biotech discussion was on Moderna (MRNA).

The thrust higher, detailed in this post was thought to be too fast for a sustained reversal. Well, it was right and wrong at the same time.

Moderna wound up reversing … sort of.

At the same time, the biotech sector headed lower to support and is now moving higher.

The weekly IBB, chart has the support (lower blue line) and potential up-thrust location (also 50%, retrace) identified.

The zoom shows the narrow gap between the weekly bars and 50% retrace.

If price action makes it past the resistance bars and into the gap, IBB would then be in up-thrust position (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


Panic In The Streets …

Remain Calm. All, Is Well.

All, Is Well !!!

It certainly feels like Animal House, doesn’t it?

A bunch of idiots running around, glued to the mainstream narrative.

However, let’s not digress but rather get to the chief cook and bottle washer at hand.

Moderna (MRNA) and Biotech (IBB).

Biotech: MRNA, IBB

Moderna’s move above resistance (‘Target’ level in this update) seems too fast for up-thrust and reversal.

It could reverse from here.

However, the more likely scenario is the mainstream milks this whole thing all the way to Christmas and beyond.

That brings us to the sector itself, IBB:

We’ll go straight to the marked-up (daily) chart.

It’s starting to look familiar isn’t it?

Spring-to-Up-Thrust … Spring-to-Up-Thrust

But wait … there’s more!

A Fibonacci 21-Days from the most recent IBB, low on November 23rd, puts the date at December 22; The Winter Solstice.

How convenient.

Of course, anything can happen between now and then. At least we have a potential target and scenario.

As with the gold miner’s (GDX) short that’s still on-going (not advice, not a recommendation), we get to see how it all plays out.

Will Biotech, IBB, be in up-thrust (reversal) position, on or around December 22nd?

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

… Cue The ‘Hype’

Right On Schedule … A New ‘Variant’

Seems like just yesterday, we were saying:

“There’s all kinds of nastiness in the guise of ‘new strains’ out there; likely to raise their heads before Christmas and probably after as well.”

Wait, … that really was, yesterday.

So, now we have the ‘Nu variant’.

Get it? A, new variant. 🙂

The ‘Epsilon’ variant (from the idiot in Brave New World) is probably being saved for last … because if anyone’s still believing the hype by that time, it won’t matter … they’ll be fully ‘boosted’.

That doesn’t mean the pros can’t make money off the herd … while there still is a herd.

Which brings us to today’s underside test action of MRNA.

Moderna (MRNA):

Well, that retrace was quick.

First, let’s show yesterday’s weekly chart.

And now, today’s

It’s true that price action is testing the underside.

However, if we go to the daily chart (below), we can see if price action can make it just a bit higher … to the 360 – 380 area, then we have an up-thrust (potential reversal) condition.

The chart looks similar to our gold (GLD) up-thrust target, linked here for reference.

Recall, for that set-up, it took two months for GLD, to penetrate resistance … and then go into a vicious reversal.

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 Breaking Down

10:57 a.m., EST

SPBIO, Biotech Verifies Channel

Inverse LABD, Moving Higher

Biotech (IBB, MRNA, SPBIO): Analysis

Looking over the updates of the past few weeks, you can see how the LABD channel (above) was formed.

The trend has repeated with successive moves higher and the right side channel line moved as a result of price action.

At this point, we may be there.

If LABD closes the day at its current location or higher, it’s a good sign of channel confirmation.

In addition, we have Moderna (MRNA) in the process of penetrating the trendline shown in yesterday’s update. If price action continues lower (as it’s doing in the early session), it could be on track to post a weekly reversal.

Separately, the IBB (ETF) index is already posting a weekly reversal. From a momentum standpoint, the new weekly high of IBB, has put that index in a potential bearish (MACD) divergence provided it closes lower from here for the week.

Positioning:

The bearish case has been building even back to David Stockman’s assessment of ‘2-Trillion Dollars of Bottled Air’, during the summer of 2015.

However, Stockman does not trade. So, to figure out if ‘this is it’, is not in his repertoire.

With current events as they are, one can intuitively conclude the fundamentals have not improved for the sector.

The backdrop is there for significant downside.

With that in mind my firm remains positioned max short (not advice, not a recommendation).

Any selling in LABD that’s occurred over the past month or so, was to adjust account(s) for maintenance (margin) requirements.

Once the index was finished with its adverse (SPBIO, higher, LABD lower) moves, we’re right back to establishing a full position.

This type of action has been going on for months.

It’s tedious and not exciting; exactly the opposite of what a typical YouTube viewer is looking for.

As a corollary, there’s no artificial (and profit limiting) requirement to show ‘Monthly’, Quarterly’ or whatever gains, to retail customers.

The financial press takes care of the retail side.

Some (very few) actually escape; finding themselves on sites like Van Metre’s, Weis’, and this one.

Stay Tuned

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.

‘Sitting Tight’

12:32 p.m., EST

Livermore: ‘Get right and sit tight’

Inverse biotech fund LABD, in trading channel

A steady sustained decline of tracking index SPBIO, is the best environment for highly leveraged (3X-inverse) fund LABD.

Biotech continues to be one of, if not the downside leader.

There has been no major break lower (LABD higher) that would draw attention to the index. That’s good in a way; it allows one to open positions (not advice, not a recommendation) while price action is relatively quiet.

It’s still a while before the close. LABD could even finish slightly lower and remain in the trading channel shown above.

Self-Employment Is Key:

It’s stories like this that highlight one way (if not the only way) to avoid being sucked into the first round of injections is to generate your own income.

It seems that everyone jumps on the bandwagon and tells us ‘how bad it is’ … very few do the work and show what can be done about the current reality.

From a financial market perspective, shorting biotech looks like the highest probability set-up (not advice not a recommendation) until such time that price action says ‘get out’.

So, that’s this site’s approach to generating income and being separate from any large (mandate enforcing) corporation.

‘Knock and Talk’

One last note on taking action. This is an example; offering a perspective on what can be done if there is a knock at the door.

Narrow your focus of ‘influencers’ to those who actually provide a service. Reduce or eliminate exposure to those who continue to peddle the fear without any kind of plan.

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.

Market Summary

Dow, S&P, Russell … all outside down

Three markets with key reversals and the biotech sector (SPBIO) posting an inside day.

One other (less followed) market of note with outside down, was basic materials (DJUSBM).

Gold’s (GLD) upward thrust from Thursday the 29th, continues to erode.

One gets the sense that it’s slipping away for the bulls.

SPBIO price action shows the most probable direction is lower.

Expectation for the next session, is for some kind of downside follow-through along with lower market action overall.

Positions:

Current positioning remains unchanged (not advice, not a recommendation) being short the biotech sector via LABD.

Market updates for the week will be limited (as the result of travel) and will resume with technical discussions by the week-end.

Stay Tuned

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.