How do you know if it’s a countertrend move, or an outright reversal?
Do you stay with the trade or, as Dr. Elder said, ‘do you just take the money and run?’
For biotech XBI, it’s been a nasty two days of upside for any short positions, but the real question is, are we there yet?
Looking at the charts below, you’ll have to decide for yourself.
However, from my perspective, it’s possible that ‘today is the day’; meaning, we may be at the top of the correction (not advice, not a recommendation).
Biotech XBI, Daily
The chart is self-explanatory.
From the day a ‘change of character’ was identified to last Friday’s low, is a Fibonacci 21 days.
From that low to today, is a Fibonacci 3 Days.
We’ll compress the chart scale for a bigger picture view of the current action.
Also included is the grey centerline, showing the channel has a symmetrical ‘look’.
Also note, we’re at a 23.6%, retrace at the day’s high (thus far) and price action appears to be eroding downward.
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.
Before we get started, biotech may have decisively turned the corner to the downside with this, just out … maybe.
‘Zero Respect For Thieves’
Before we get started, with getting started, a brief mention on thievery.
Years ago, Dr. Elder stated he had ‘zero respect for thieves’; those who had stolen his book tile, ‘Trading For A Living’, in various forms.
When you have limited skills and even less insight, thievery is the only way to go … that is, until you’re found-out.
Turns out, the analysis of silver SLV, posted on this site (here and here) nearly two weeks ago, specifically the presence of SLV volume ‘spikes’ at inflection points, may have been ‘lifted’ without citation by a prominent YouTuber (who will not be named … yet).
It may have been just a coincidence. If so, all is well. However, a ‘second time’, not so much. So, let’s all play ‘nice’ shall we? 🙂
Now, on to biotech.
Biotech, XBI, Daily
This update is being released just before the open. It looks like XBI, is about gap-lower.
We see in the chart, XBI, is respecting the Fibonacci projections.
As with the recent oil market analysis and USO, (here and here) we let the market decide what areas are important.
In the case of XBI, and unless significant demand comes in, lower prices appear to be the most probable direction (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.
‘Once stopped out, the amateur will never re-enter the trade.’
That’s Dr. Alexander Elder, stating a typical psychological barrier for the new trader.
As if by design, as soon as the short trade LABD-23-10, was named, it was stopped out early this session.
About thirty minutes after the open, price action reversed its early session direction and re-confirmed the original bearish assessment of the sector.
Naming The Trade
From a personal standpoint, the psychological barrier of never getting back in a trade once stopped out, was addressed years ago.
It’s frustrating, but what’s worse, is watching one’s original premise turn into a ten-bagger and not being along for the ride.
With that said, the short in biotech has been re-established via LABD, at a far-from-perfect entry of 21.69, and a not-so good stop of 20.54 (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.
‘Professionals don’t look for the challenge, they look for the money’, Dr. Alexander Elder
Right now, the ‘challenge’ is AI; bull or bear, who’s right?
We even have a bearish article out on SeekingAlpha. That means, the sector will probability go higher from here. 🙂
I wrote for SeekingAlpha years ago; had tens-of-thousands of views on my work; was somehow, never paid a dime.
The editors eventually told me, identifying potential market turns to-the-day, was “not suitable” (that’s a real quote) for their readers … so, there’s that.
Follow The (Nat-Gas) Money
Meanwhile, a potential significant reversal was identified in Nat-Gas, link here. So far, it’s progressing under the radar.
Entries have been made in UNG, at 6.64, 6.75, 6.86, 6.89, with a hard stop moved up to UNG 6.71 (not advice, not a recommendation).
Next, we have a potential reversal in Real Estate.
Real Estate IYR, Daily
Price action’s now at Fibonacci Day 8, from the low on August 21st. In addition, it’s at the 50%, retrace level from the high on July 27, to the aforementioned low.
We’re in a high, potentially, soon to be much higher, interest rate environment.
The (Interest Rate) Black Swan
The general public and investing professionals alike, think as the economy tanks, the Fed will lower rates.
It’s a widely and strongly held belief. After all, it’s always worked that way.
What if it doesn’t happen this time.
The economy tanks and rates move even higher?
it’s a possibility to consider.
Positioning
As one might guess, I’m already short this sector via DRV (not advice, not a recommendation).
Entries were made yesterday and today at DRV 48.42, and 47.66 respectively.
Hard Stop, is at the session low of DRV 47.00 (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.
While the media’s wasting no time setting up the average investor, for a ‘guaranteed skinning’ (as Dr. Elder used to say), providing an environment of constant, incessant, AI ‘get-in-now’, buy recommendations.
With that said, an ominous market sign has appeared.
As the daily chart of SOXX shows, we either have a breakout or a hole that’s about to be filled (reversed).
Semiconductor Index SOXX, Daily
In technical terms, the SOXX is in Wyckoff ‘Up-Thrust’, reversal position (not advice, not a recommendation).
A tick lower in MACD, confirms the bearish divergence.
Then, there’s Fibonacci
Enter, The Count
When markets are in a mania, reaching insane extremes, it allows for a (more) clean print of either Fibonacci retrace levels or time correlation.
Decide for yourself if that’s the case now.
Remember, tomorrow (Wednesday) is the 19th, and one day before Taiwan (TSM) releases earnings.
That release is scheduled for the 20th before the open.
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 ‘Artificial Intelligence’ (AI) clown show’s in full swing with a ‘predicted‘ single quarter target of $11-Billion, from NVDA.
That’s not to be confused with the budget clown show just ended in Washinton D.C.
And where does that leave Tesla? They seem to be left out of the latest round of cult-like insanity.
Back in the day, Dr. Alexander Elder stated, professionals don’t look for the ‘challenge’ in the markets (trying to figure out the NVDA, top), they look for the ‘money’ … there’s a huge difference.
Junior Miners GDXJ, Weekly Candle
As of 12:35 p.m., EST, from a technical perspective, even though we’re up for the day (so far), MACD momentum’s increasing to the downside (magenta arrow).
Nobody seems to be paying attention to gold and silver; all eyes are focused on the next shiny object.
Pulling out a bit farther on the weekly, there’s no question we’re in a channel.
The question is, are we (GDXJ) going to say in that channel or reverse from here?
The last update said we’d likely be testing the wedge break and that’s what’s happening.
A ‘test’ will take however long is needed. It’s either pass or fail. Pass in this case is resumption to the downside.
Technical conditions (MACD, wedge break) favor the downside (not advice, not a recommendation).
In addition, we need to keep in mind there’s a new circus in town; the miners may be well on their way to more downside before anyone steps out of the big-top to notice.
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.
With that understood, we’ll present three potential scenarios for Moderna (MRNA) price action for the upcoming days, or week(s).
When we last left our chief cook and spike-protein injector, price action was in a downtrend but also in Wyckoff spring position; indicating at least a chance for upside.
As with the CarMax (KMX) analysis, still playing out with Scenario No. 2, and/or No. 3, at this link as the forecasted price action, we’ll show potential Scenario No. 1 – No. 3, for MRNA, below.
Moderna MRNA, Daily, Forecasted Action
Scenario No. 1
Upside wedge breakout
Scenario No. 2
Downside wedge breakout with no test
And now, the most probable, ‘If there’s a downside breakout.
From a short-dated options standpoint, Scenario No. 3, is the most desirable (not advice, not a recommendation).
If there’s a downside breakout with no test, there’s always the possibility at some point, there will be a test, which in turn completely wipes out any potential gain in the (put) trade; time would run out and the option expires.
Re-Visiting, Elder
Recall, in the example that Dr. Elder gave, he bought OEX Put Options at 3/8-ths, back in the day when the markets traded in fractions.
Three-eighths is 0.375, which gives a target value on which option to select (not advice, not a recommendation).
To get to that small of a fraction, the option’s either way out of the money, short on time, or both.
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.
With a potential right-side trend (and channel) contact confirmed; shown below at – 86% annualized, odds are now favorable for a Put strategy.
In addition to the technical factors discussed, listed at the bottom of this post are no fewer than 22-links to the current fundamental state of biotech and their ‘handiwork’.
The weekly chart of MRNA, has a Wyckoff Up-Thrust and a test, confirmed by the downside pivot.
Moderna MRNA, Weekly
Notice the reversal action took place at a very weak Fibonacci 23.6% retrace.
The two blue lines on the daily chart (below) are exactly parallel.
The grey lines are parallel to the blue lines and intended to show MRNA, exhibits a repeating (downtrend) pattern.
Moderna MRNA, Daily
The expanded version on the daily has support being penetrated (horizontal blue line) and then ‘spring’ action last Friday as a result.
Of course, it’s ‘what happens next’, that’s the question.
In a prefect scenario, price action would thrust lower for a day or several days and then come back up to test the underside of resistance.
Elder Option Strategy
This strategy is taken from Elder’s book ‘Come Into My Trading Room’, and seeks to use as short-dated options as possible.
Doing so, requires the discipline to wait sufficient amount of time for price action to get into position and for option time value to bleed-off.
Potential Upside
Since we’re already in spring position and price action moved off the lows on Friday, MRNA could continue the upside right back to, or past the downtrend line.
However, with massive (undeniable) fundamentals building buy the day, and MRNA being mentioned specifically in at least one link below, probabilities favor the downside.
Supporting Links For The Bearish Stance
Florida Surgeon General Warns Life-Threatening VAERS Reports Up 4,400 Percent Since COVID-19 Vaccine Rollout
US Says Government, Not Moderna, Should Face COVID-19 Vaccine Lawsuit
New Medical Codes For COVID Vaccination Status Raise Concerns Among Experts
Watch: Rand Paul Grills School Of Nursing Head On Student COVID Vaccine Mandate
US Navy Lifts COVID Vaccine Mandate For Sailor Deployment
Mainstream Media Continues To Push False ‘COVID Heart’ Narrative To Explain Excess Deaths
NFL Players’ Association Urged To Screen for Heart Issues Over Vaccine Side Effects
WHO Suddenly Shelves Plans For Second Phase Investigation Into Origins Of COVID-19: Report
Watch: CDC Director Suggests It Will Never Change Child-Masking Policy
Rand Paul Introduces Bill To Halt Funding For Hospitals Denying Care To The Unvaxxed
Welfare State Weakens… 30 Million Americans Are About To Lose ‘COVID’ Food Stamp Handouts
IMF Says World Needs To Prepare For The “Unthinkable” After COVID, War In Ukraine
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® 