Peabody (BTU) Trending Higher

Those late to the game on BTU may have cashed out with losses on Friday, September 25th.

So-called ‘expert’ (buy) opinion came out on the 17th and since then BTU has declined anywhere from -8%, to -27%.

We exited our BTU long on the 18th, with a 15.5%, gain.

Now, we see BTU contacting a nascent trend-line.  There could be a trading channel formed as well.

If BTU maintains the trend, it’s rising approximately +3,000%, annualized.

At that rate, a 100% gain on a long position (not advice, not a recommendation) would take about six-weeks.

In other markets, biotech (IBB) pre-market action shows a higher open.  If that’s the case, we’ll exit (not advice, not a recommendation) the BIS position and stand aside.

Update: 9:54 a.m. EST: IBB is reversing immediately from its open. BIS position maintained (not advice, not a recommendation) at this point.

Update: 2:39 p.m. EST: BIS exit @ 31.591

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Biotech Short: Technical Discussion

Short out, short in. That was the trade action for Friday, the 25th.

The pre-market update hinted price action would rise; taking out stop orders at the area shown.  IBB did just that and more.

Early in the session, within about thirty minutes it was obvious that we’re moving higher. The BIS position was exited at 33.10.

Profit on the short, held for ten days was about 6.5%.

Price action continued to rise throughout the day. Late in the session, the short was re-established via another position in BIS.

Not expected, was that IBB continued to move higher into the close of the day. 

BIS moved correspondingly lower.

The position is showing a slight loss of -1.5%.  This amount is well within risk parameters but does require that IBB opens lower and moves lower at the next session.

The chart, with an expandable version here, shows we’re at the top edge of an established trading channel. 

Force Index, upward thrust energy has declined while at the same time price action finished the day right at the axis line shown.

There’s also a Fibonacci time sequence as noted.

The expectation is for a lower open and lower action during Monday’s session.

If price action opens higher, the short-covering scenario as identified in this update, is not in effect; the short position will be closed.

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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.

Amgen At The Edge

The market itself has decided the lower wedge-line is important.

Price action penetrated, then recovered, penetrated again and is now testing the underside.

This oscillation about the line validates its existence and confirms its importance.

AMGN is at the danger point.  Price action can go either way.

Higher, and the wedge has been negated.  Lower and we may have a strategic, long-term reversal.

Separately, the short position via BIS at the trader’s discretion was exited early during Friday’s session.

When it’s obvious, we did not wait around for the stop.

The total profit on the short, held for just ten days, was about four-weeks pay for the typical American worker.

Why list it in those terms? 

With at least 30% of the population out of work and no job in sight, would it not make sense to show how proper research, experience and training may replace some of the lost income?

Getting back to the biotech short position; Later in the session, as IBB was rising, BIS declining, the short was re-established.

More on that entry is planned for tomorrow’s discussion.

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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.

Biotech, Short Stop

It’s about 20-minutes before the open.

For those monitoring the short trade in biotech (IBB), the stop has been moved (not advice, not a recommendation) to the area around IBB, 133.11.

This is the middle of the trading range from September 23rd.

There may be orders hiding right around IBB 132.00 – 132.40 and the market could attempt to search these out.

We’ll see.

Annotated chart below:

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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.

Trending: Biotech

Today’s action may be in a trading channel.

It’s a Fibonacci eight days from the low of September 4th, to the top on the 16th.

That time correlation, along with the channel hits, help to provide validity to the set-up.

Our short position in the sector has not changed appreciably.  There was a slight backing off yesterday, by reducing the size about one-percent.

However, during today’s action as IBB was making intraday highs (BIS making lows), the short position was increased, via BIS.

In any event, we have a hard stop at the day’s high, IBB 134.85, which is approximately 31.46, on BIS:  Not financial advice, not a recommendation.

As of this post, 7:00 p.m., EST, the S&P 500 futures are trading down about -0.50%, giving the inference that downside action will continue at the next session.

Silver futures have dropped another 4.5% – 5%. Price action’s heading straight down.  Nearest chart support for the SIZ20 (December) contract is around 20.00.

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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.

Break & Test: Biotech

Getting out of a non-performing position allows the mind to clear.

What we see now, is a massive terminating wedge pattern for IBB. 

That wedge had a trend line break September 3rd, on decisive volume.

The break is now being tested.  This is typical market behavior. Expandable chart of IBB, is here

It’s about thirty minutes before the open and pre-market activity shows IBB trading higher. 

The IBB, 50% retrace level is approximately ~ 136.20

IBB tends to move counter-trend during the first two hours of trade. 

If the trend is down and the market’s just testing, the (continuation) reversal lower may come around 11:30 a.m. EST.

Inverse funds (not advice, not a recommendation) are BIS (2X-inverse) and LABD (3X-inverse).

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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: Breakout Higher

The agricultural food supply, and delivery systems are being destroyed systematically.

The fundamental picture for corn at this juncture, should be well known. 

Weather events, whether manufactured or not, are taking out huge (silo) stockpiles in addition to destroying what’s still in the fields.

The August 20th, update highlighted a CORN trend-line.

Since then, CORN price action has morphed into a trading channel.

We’re now at the right side and in position to move higher. A channel failure at this point would be obvious.

If CORN does not continue upward from here, the channel has lost its effectiveness and/or, the market has some other objective.

Biotech IBB: Update

Anything can happen. Price action reversed above the 23.6%, retrace, hit the 38.2% retrace and kept going.

Our result was to exit the (IBB), short position during today’s session.

We’re past the 38% retrace level which leaves 50% and 61.8%; Trading action is to stand aside (not advice, not a recommendation) for now.

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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.

Biotech: The Movie

Just before the all-time high in biotech (IBB), several screen shots of price-bar action were obtained.

Pasting it all together in an old-time flip-book format, we see the daily action of IBB over the past two months.

There’s no bonafide indicator that a top was imminent other than increased daily volume at the pivot. 

That increased volume was a subtle clue more volume was not resulting in upward movement.

The next day, price action stalled and reversed.

The result is obvious but below the radar.  IBB has not declined significantly enough, fast enough to draw outright attention.

This is precisely (not advice, not a recommendation) the area where Three Ten Trading established its short position.

In fact, as detailed in this update, the entire short position was exited and then re-established during this two-month long reversal.

The short position (via BIS) is now well in the green but ready to be exited at the first sign of trouble … all the while expecting further IBB downside ahead.

TC2000 Charts courtesy of Worden Brothers, Inc.

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 Hit & Run

It’s one hour before the close; biotech is hitting multiple technical flags simultaneously.

The weekly chart below, shows IBB retracing to Fibonacci 23.6% of its move from the July top.

Then it reversed.

Such a shallow 23.6%, retrace, where 38.2%, and 50%, are more common, indicates severe weakness. 

It’s a harbinger of lower prices ahead.

In today’s session, just minutes ago, IBB posted an outside down (key reversal) daily bar. 

So, we have a daily reversal within a larger, weekly reversal.

To make it technically correct for outside down, IBB would need to close below yesterday’s low of 127.99. So, we’ll see.

The short (not advice, not a recommendation) position via BIS, implemented by Three Ten Trading, has not changed.  In fact, the short position has been increased since the last post.

There’s been no major break in IBB, yet.  No air pockets, no negative news announcements.

As Livermore said a century ago (in 1923), ‘surprises happen in the direction of trend’.

The trend of IBB is down.

Let’s see what happens next.

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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.

Straight-Down: Biotech

Not happening: Do not pass Go.  Do not collect $200 dollars.

From the open, IBB headed straight down; decisively penetrating support at the 130.00 – area.

Next potential support and a possible chance of a rebound, is around 125.00.  At this point, it’s not looking good.

Right now, volatility is high.

The low risk part of this move, that is, price action over the past three months, is over.

Another low-risk (short) entry point may never happen.  Biotech could just collapse from here. 

Remember, Stockman’s quote:  ‘It’s $2-Trillion of bottled air’.

Since were following the tenets set down by the market masters linked here, we’ll sit tight at this point. 

A reasonable stop level for BIS (2X, inverse ETF) can now be moved to around 33.50. For illustration only. Not a recommendation. Not financial advice.

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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.