It’s hard to describe how stretched the market really is; how ‘the euphoria is so maximized’, as quoted by David Quintieri of the Money GPS.
His latest report, delves into published articles that contain one market stretched quote after another.
Perhaps, the most frightening is:”This does not feel like the top”.
You can find that report at this link. The quotes listed above and more, start around the 1:40, time stamp.
In the markets as of this post (2:08 p.m. EST), biotech (IBB) continues to erode throughout the session.
The firm has made one LABD (3X, Inverse) and two BIS (2X, Inverse) entries this session so far. Not advice, not a recommendation.
Note the stop progression on BIS entries.
Positions are below; 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.
It’s been a while since biotech (IBB) was on the radar.
We’re going to look at the thirty-minute chart of 2X Inverse fund BIS, to show the change in character.
The first two oval areas after each up move in BIS (IBB down), was fully retraced. Not only that, the retrace occurred on the same day.
Not so with the last oval, today.
BIS has a changed character. The thirty-minute bar was not retraced; telling us we’re at the danger point where the risk is least.
Both the weekly and daily MACD indicators show momentum has shifted; stalled (on weekly) and has turned lower on the daily.
As far as shorting the biotech sector, any takers? It’s not like the other crowded trades; Dow, NASDAQ, S&P, and on.
As this post is being written BIS is edging back slightly to the entry point @ BIS, 22.23.
In so doing, there may be an hourly trend line forming. If that happens, updates will be forthcoming.
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.
Inverse Oil ETF, DUG volume went off the scale today; the highest in at least four years.
The short-squeeze top in the sector, using XOP as the proxy was identified before today’s open in this report.
At that time, there was nothing significant about either XOP, or the inverse DUG other than being at opposite price extremes.
Today’s action changed that view.
Apparently the juncture was significant enough; Today’s transaction volume in DUG, amounted to approximately $23-million.
That’s a huge number. Typical action is around $4-million.
Oil is inversely related to the dollar at this point. The dollar proxy, UUP reached a new trend low last week but seems to have found support the past three sessions.
Being short the oil and gas sector via DUG (not advice, not a recommendation) is essentially a leveraged bet on a dollar rally.
In other markets, after weeks of analysis and planning, biotech had its reversal but we’re not in it (on the short side) having exited yesterday.
Not to worry; the massive volume inflow to DUG suggests that we’re on the right track with who (or what) is going to be most vulnerable to a market reversal.
Biotech (IBB) price action may retrace upwards to test. If and when it does, we’ll re-evaluate.
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’s great that Texas has brought suit for ‘illegal’ voting.
However, with eyes wide open, there could be more going on than just contesting an international vote-rigging scheme that has entrenched corruption on a grand scale.
The oligarch controlled medial of course puts their spin on it and plies its evil trade.
Despite the way it looks, lawsuit and all, this could really be the first salvo on U.S. Balkanization. Plenty of information exists on the topic; here’s one source.
Texas of course would have to establish ground rules or structure for such action …. If that was to happen at the current pace of events … five years? Maybe faster.
A complete collapse and mass unemployment (with civil unrest … oh wait) would of course help things along from a public acceptance perspective.
Outlandish you say … complete insanity. Really?
How outlandish is an entire population running around with a piece of toilet paper across their face … afraid of something (the speck) that’s not even there. Even the CDC admits ‘no isolates [of the virus] are currently available [because it does not exist]’.
Go ahead … take a trip to your local graveyard. Where are the bodies?
By now, a real world-wide pandemic would have municipalities passing special measures (and taxes) to annex additional land to keep up with the dead. Back-hoe operators would be in short supply and a booming business.
Not happening; because it’s not there. The real story is here.
So, what about the markets?
Yesterday, the short positions in biotech were closed out as we got a higher open (not expected) instead of lower; even though bid/ask right up to the opening bell indicated a lower open..
IBB has now pushed past the 150-target area. There are no more forecasts for this sector. We’re at the target and no reversal … yet.
Moving on and giving credit where it’s due, Steven Van Metre, is the situation in oil.
With a huge economic slowdown (another collapse) coming, demand for oil is likely to vaporize yet again. Recall when the futures market went negative just eight months ago?
Oil prices may have been bid up on expected demand from a “re-opened” economy. That’s the current narrative.
What’s really going on looks like a short-squeeze that may have played itself out. The Weekly chart of XOP (oil/gas production ETF) shows upside progress has stopped dead.
Positions:
Based on the weekly price action of XOP shown below, we’re short oil and gas via DUG; a position established late yesterday.
At this juncture there’s no hard stop (not advice, not a recommendation) but we’ll wait during the fist hour of the coming session to see how the hourly bar posts.
Last week’s high in XOP was 61.06. If price action pushes beyond that by any appreciable amount, we’ll exit inverse DUG.
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.
Bid/Ask spreads on Biotech (IBB) indicate a lower open.
From last night’s update, this was the expectation if we’re in the early stages of reversal.
Empirical observation over many months shows IBB, tends to move counter-trend for the first 90-minutes of trade … then resumes its original direction.
If that holds true for today (and we’re in a reversal), expect IBB to open lower and then attempt a move higher during the first hour and a half; right up to about 10:30 a.m. to 11:00 a.m. EST.
Note: That’s empirical observation; typical market action for IBB.
However, each day is different and price action itself has the final say.
Both accounts being managed already have significant positions (BIS & LABD) with a BIS stop @ 24.64 and LABD stop @ 27.63 in the market (not advice, not a recommendation).
Following Livermore’s approach (get in big … and do it early) the plan is to monitor price action for another opportunity.
If somehow there’s a higher open for IBB, then we’ll wait for a lower daily low (to increase position) or be stopped out … whichever comes first.
It’s still quiet in the markets. No one expects a major reversal. Retail is all in (although insiders are selling en masse).
There are fundamental reasons why biotech may be about to crack (big time) but those reasons are for another report. Here’s a preview.
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.
Culmination of probabilities; That’s what appears in Biotech, IBB
First: The 150 target identified in this post has subsequent price action reaching a 149.31, high … could be close enough
Second: The daily chart has a small terminating wedge pattern created over the last five sessions. A wedge is usually the last stop before reversal.
Third: The amount of upward energy (Force Index) available to push prices higher has evaporated. Today’s session, while closing marginally higher, had near zero energy.
Fourth: Today’s price bar was a reversal; A higher open, higher high, followed by lower low and lower close.
Fifth: The last reversal bar was five trading sessions ago. That bar was negated by subsequent price action; leading up to today.
Markets alternate. What happened the last time (negation of reversal) is not likely to happen this time.
Sixth … sort of. The gold market and the miners (GDX) could have received a ‘safe-haven’ bid in advance of an overall market decline. Did today’s rally in gold just signal the market top?
As of this post (8:02 p.m. EST) the overnight session (S&P) is trading lower -8.50-pts or -0.23%. So, we’ll see.
With the above five items listed and the probable sixth, expectations are for a lower open on tomorrow’s IBB session, then adding weight to the reversal.
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.
If IBB is able to finish below resistance at 148, it will post a daily reversal bar.
Original upside target was the 150-area. Looks like at this juncture, 149.31 may be all there is.
Hourly chart of IBB with notes, below.
Positioned short (not advice, not a recommendation), via BIS and LABD (separate accounts).
Stop: BIS 24.64, LABD 27.63
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 did not take long to be proven wrong. DUST positions (in both accounts) have been exited.
Stated before, a 23.6% retrace is a rare event. Looks like that’s holding true as price action for GDX now points to the 38.2% area.
That corresponds to GDX trading to around ~ 38 … a long way to go higher.
Biotech, shown below is just 0.69-pts shy of target with price action (as of 10:34 a.m. EST) coming back to test the early session lows.
It’s traders discretion (not advice, not a recommendation) to determine if today is the day IBB finally reverses and confirms the bearish weekly MACD divergence.
At this point, daily action has quickly retraced from the high of 149.31
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® 