The top 30% of components for the XLV sector, are drug companies.
Then, comes UnitedHealth UNH, rounding it out to about 36%, of market cap.
No matter what happens with news like this, the overall landscape is shifting, link here.
As for the ‘elephant’, listening to a few select interviews of Ed Dowd via Daniela Cambone, Peak Financial, Gerg Hunter, Thoughtful Money, and others, then, you already know.
Click those names on the side-bar tag, for more research.
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.
Unfortunately, the (mad scientist) graphic at left, is not too far removed from what’s really going on in biotech.
While the S&P, Nasdaq Qs, Gold Miners, Semiconductors, Financials, The HOOD, ORCL, and others, continue to make all-time highs, conspicuously absent is biotech, XBI and IBB.
Now, it appears that quietly, in the background, XBI is reversing to the downside.
Biotech XBI, Daily Close
The up-thrust is there, but is a weak penetration of resistance.
Even so, on the ‘test’, volume contracted by -49.24%, when compared to volume on the upside penetration.
Until proven otherwise, this set-up appears to (currently) be the best short opportunity.
With that said, all other short positions have been closed to focus on biotech.
Leveraged inverse fund LABD is being used at this juncture: Trade LABD-25-10, with stop at the session low (not advice, not a reocmmendiaton).
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.
For several years, strategy, ideas, or analysis posted on this site, have been stolen, copied, ‘coincidentally’ presented a day-later, on YouTube, or in financial publications (nearly, word-for-word) without reference to the source.
The most recent of these (potential) occurrences was just days ago … we’ll leave it there.
Since others see fit to use this material without reference, and to combat the incessant theft, a paywall needs to be implemented; details of which, forthcoming.
This (paywall) action is no different than what Karen Kingston lamented during interviews with Greg Hunter.
People were stealing her biotech research, then going on to publish it, as if it was their own.
Ladies and gentlemen, the (economic) tide is going out. Have a short-list of ‘trusted contacts’. This site would like to be one of them.
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 a bear market; we have non-stop headline induced whipsaws, never-before seen extremes, massive downdrafts followed by (face-ripping) short covering squeezes.
Then, there’s the ‘fatigue’:
“Investor Fatigue Has Set In”: Goldman’s Desk Summarizes The Key Market Themes, link here.
Judging from the links below, the professionals (seem to) have an idea of what’s likely; the other side (the retail side), remains clueless or confused.
‘Depression Cycle Is Here’ Charles Nenner Warns “It Will Be Much Worse In 2026”, link here.
As Professional Traders Panic Sell, Retail Investors Just Can’t Stop Buying., link here.
The recent sharp recovery has shown us where to go for short-side opportunity.
One such sector, is the healthcare industry (not advice, not a recommendation).
Health Care Select Sector SPDR, XLV, Daily
The wedge is obvious.
Typical classical analysis market guidelines for wedge:
Whatever direction was the entry, that’s the (most likely) direction for exit (not advice, not a recommendation).
If there is a downside exit, we’ll discuss measured move(s) at that time.
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.
In the past few weeks, it seems like the markets have been whacked with a lot of, ‘the largest, ever’.
Trading in bonds, specifically TLT, is no exception.
While the media and pundits alike, deflect with ‘who’s doing the selling’ (hint: it’s not important), we’re going to look at the harder question of ‘what does it mean?’
Kick-Off, or Capitulation
Borrowing from research and writings of Wyckoff, Weis, and Prechter, when we get such a huge thrust downward (chart below), it’s typically one of two events:
A massive kick-off to much lower prices or a capitulation that washes-out the weak hands.
A bond upside reversal (rates lower) is a common sign of nearing or active economic downturn (not advice, not a recommendation).
In this interview with Greg Hunter, Ed Dowd covers the topic … the expectation for the reversal. However, that interview, was before the massive thrust lower.
Long Bond Proxy, TLT, Weekly
For years, it’s been one failed upside (reversal) after another.
Is this time, different?
The right side (magenta arrows) shows unprecedented thrust and volume.
So far, there has been a weak recovery to 38.2%, retrace of the recent down-move.
If that retrace level holds, with bonds continuing lower (rates higher), it does not bode well for the ‘capitulation’ narrative.
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.
The markets don’t like uncertainly and that’s just what we have with biotech.
As the chart shows, the question becomes; is it a trend breakout, a breakout and test or a breakout, test, then possible failure?
This interview with Ed Dowd just days ago, paints a bearish picture for the overall markets.
If so, and we apply that scenario to biotech, the odds don’t seem to favor the upside (not advice, not a recommendation).
With that, let’s get to the action.
Biotech XBI, Daily
Last Friday, the 21st, was Fibonacci Day 89, from the November 11th, 2024, highs.
If the trendline is in-effect, meaning the market’s hanging in mid-air in a false breakout, getting back into that trend may result in some dramatic downside action.
On the bullish side, if it’s an upside breakout, ‘normal’ behavior is for a ‘test’ of the trendline.
Either way, both scenarios favor more downside (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.
The last update on Carvana, link here, identified the potential for downside reversal.
That’s what we got 🙂
Now, as we’ll see in the chart below, CVNA is right at the trendline.
Carvana CVNA, Daily
We’re at the trend, but there’s a slight possibility price action will rebound (off the trendline) to the area noted (not advice, not a recommendation).
Let’s add this insight from Greg Hunter and Ed Dowd, concerning the economy, link here.
After watching the interview, judge for yourself whether or not we have recovery higher first, or we head lower, first.
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.