Overnight, Pre-Market

Markets might continue their decline in overnight and pre-market.

If pre-market or early regular session has IBB trading near its target level, we’ll plan on exiting (LABD) in response; not advice, not a recommendation..

Every other active trader sees the H&S at this point and is probably waiting to close out (their shorts) at or near the bottom.

If so, it may result in buoyancy and the trade will start to degrade; exit is warranted under those conditions.

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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 (AMGN) Breaking Lower

Amgen’s the largest cap in the biotech sector ETF, IBB.

Loss of momentum (magenta arrow) is clear.

Upside energy (weekly) MACD has been dissipating for over a year.

So, this is no transient direction change. Zooming into the daily chart shows hesitation at the trend line.

Then last Friday, a significant move away from that trend.

When there’s a trend break, typically there’ll be a test of that break.

In this case, such a test would cause price action to move higher; testing the underside of the trend.

Because there’s been so much congestion at the trend line, we may not get the upside move.

It may have already self-tested. From here, price action could just make its way down to the measured move target ~ 164 – 165.

Positioning:

We’re short this market via LABD (not advice, not a recommendation) and have moved the stop to 18.17, based on yesterday’s action.

Summary:

If AMGN decides to test the trend underside, it’s likely to stop out LABD.

If price continues to decline (unabated) to target levels, we’ll probably exit at pre-identified IBB, target ~ 138 – 140 (approx: 35 – 38, LABD).

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.

Active Trade: Short Biotech

The last update on the short position in biotech, said we’re keeping it until stopped out or target met.

Currently the LABD stop is located at 17.21 (not advice, not a recommendation).

The biotech IBB chart shows us price action is verifying the existence of the Neckline; The two (arrow) hits on the right side.

The deduction we’re in an H&S top, at this juncture is correct.

If IBB makes a new daily low, with LABD making a new daily high, then we’ll be able to move the LABD stop higher.

That new level will be defined by price action itself.

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.

Biotech: Downside Analysis

The short position in biotech is active and now has downside targets.

These updates are an example of letting the market itself determine the (trading) course of action.

Yesterday, we said that price action itself will identify the stop on the short position.

We’re using LABD (3X inverse, IBB) as the trade vehicle; not advice, not a recommendation.

Looking at the daily chart of IBB, we’ve got what appears to be a Head & Shoulders top.

Two sessions ago, the neckline was completed. Yesterday, was a counter-trend move.

If we’re in an H&S top and that neckline is penetrated, it sets up a measured move target.

Getting back to the short on LABD. Our stop is yesterday’s high in IBB which loosely corresponds to the low of LABD (approx: 17.19).

The market itself defined the stop.

Now, we’ll follow this trade to its conclusion. The plan is either to stop out or exit at the IBB lower target.

Pre-market activity, LABD trading higher at about +1.00%.

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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.

Biotech Short, Revisited

So, the biotech short via LABD got stopped out last session.

Even though price action by its own behavior early in that session said to exit (at the highs), the position was maintained for the sake of argument.

The original stop was set at LABD 18.35, which was the 4-Hour low, noted yesterday.

Late in the session that stop was hit.

The overall sector (IBB) remains in a reversal with both daily and weekly MACD momentum indicators pointing lower.

In fact, Weekly MACD has a double bearish divergence in the histogram with MACD lines about to cross to the downside.

Putting all that together, expectation for inverse fund LABD is to head higher after yesterday’s counter-trend move.

Once stopped out (at LABD 18.33), LABD was re-established at a lower price (not advice, not a recommendation).

That entry price is on the weekly chart below:

We’ve switched to a weekly chart to show there are two other times in the past year, where LABD had three weekly up bars in a row.

Those reversals had narrow ranges and thus were quickly negated. This time it looks different.

The current bar is not complete but with the overall market (S& 500) at extremes and ratcheting lower, probabilities are high LABD will close higher for the week.

As for setting the stop on the new position, we’ll let the market decide.

Counter-trend action in the early session is usually over by 11:00 a.m. EST.

We’ll look at LABD at that time. Till then, hard (emergency) stop is located at the weekly LABD low of 15.96

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.

Trading Tip: Trailing Stop

Here’s one method to use for a trailing stop; Have the market itself tell you were it goes.

The reason brokerage trading platforms have so many options with an endless list of indicators, is that’s what the (retail) public wants.

It has nothing to do (as usual) with what works best.

Wyckoff himself said the market defines the course of action. The “tape” as he called it, was the master for decision making and no other.

Let’s look at what the tape is saying about LABD, the 3X inverse EFT of Biotech (IBB).

The sector has already been traded profitably last week. Shown on the chart below is another entry. Also shown, is what may be the most efficient method for stop placement.

For LABD over the prior weeks, we could have extracted a large part of its move using a trailing stop based on the 4-Hour chart.

LABD itself has defined that 4-Hour looks best at this point in time.

So, that’s what we’ll do (not advice, not a recommendation). The stop will be at the nearest 4-Hour low (currently, 16.27).

At mid-session today, we’ll move it up to the next 4-Hour low and so on until stopped out.

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.

Real Estate, Ready?

The real estate index IYR has been struggleing at resistance for months.  Yesterday’s action was a swift break lower to the bottom of the range.

Inverse fund DRV (3X inverse IYR) had is largest single day gain since mid-May of last year.

The weekly chart shows the four-month struggle at resistance as well as MACD bearish divergence.

IYR may attempt to test slightly higher (DRV down) during this session.

If so, we’ll be looking to position short via DRV; not advice not a recommendation.

Moving on to biotech.  Yesterday’s action was a good example of negative bias in LABD.  Even though IBB closed lower, LABD closed lower as well.

The LABD position was closed out as shown (above) and the BIS positions maintained.

Note the R-Exit value.

This represents the gain on the amount risked. If $1,000 was risked on the trade, it returned $8,540.

Update will be forthcoming if/when a DRV position is established.

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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 Goes Vertical

Ever since the inland hurricane, the ‘Derecho’ of August 10th, it’s never been the same for corn. Now, it’s going vertical.

The entire U.S. agricultural food supply infrastructure is being systematically dismantled.  Control the food, control the population. Simple.

It seems the ‘preppers’ tend to focus on stockpiling silver and gold.

If your’re getting ready for what’s coming, from a historical perspective, that’s not the place to start.

Going way back …. thousands of years, during the famine in Egypt of Joseph’s time, we have this:

“And Joseph gathered corn as the sand of the sea, very much, until he left numbering; for it was without number”

“And the famine was over all the face of the Earth: and Joseph opened all the storehouses and sold unto the Egyptians: and the famine waxed sore in the land of Egypt.”

“And all countries came unto Joseph for to buy corn; because that the famine was so sore in all lands.”

Gen 41:  Vs.  49, 56, 57, KJV

They paid for the corn first, with gold and silver.  Then they paid with their livestock.  Then they paid by selling themselves into life-long slavery. We can equate that last part (slavery) as getting the vax.

As corn is going vertical, the bond market is signaling its move as well.

Just now, today, TLT is rotating higher.

Yesterday, Steven Van Metre showed a chart (time stamp 10:00) of the speculators beginning to back off their historic short position.

They’ve figured out they’re trapped. Now, they’re trying to sneak out the door without being completely impaled on a sharp bond spike.

The S&P, Dow, NASDAQ, Russell 2000, all appear to be holding near their highs.

Biotech (IBB), as reported yesterday, is different.

Something major is brewing below the surface with the biotech deception.  Price action itself is showing it’s the place to be for the short-side.

Further info on biotech’s downside is here and here.

Positions remain unchanged (as of 3:02 p.m. EST).  Stops have been moved; not advice, not a recommendation.

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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.

Class Action

Markets press on, new highs. However, biotech (IBB) is losing luster.

It could be just a temporary blip on the road upward.

Or, there could be something else afoot not known to the general public … and possibly not even known to professional speculators and market traders.

The video link below is to an alternate (independent) platform. One among many popping up in response to ‘adjustments’ being made by YouTube.

The video at this link is nearly an hour long.  It’s one of those things that upon viewing the entire presentation, one can never be the same.

 Viewer beware.  For those with short attentions, fast forward to Time Stamp 22:50, for the meat.

Wyckoff stated a century ago ‘the reason for a move is always revealed after the fact’; we might find if IBB reverses from here and does not look back, the link above may ultimately become the ‘reason’ for such a move.

Imagine if this presentation becomes widespread knowledge … where will biotech be then?

Of course, price action is always the final arbiter.  Positions (and stops) remain unchanged.

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.

Crowded Trades

Gold miner (GDX) bulls and bears have been fighting in a crowded trade since late November.

This morning’s GDX retrace up (and now down) from yesterday is a case in point. 

In such a choppy environment, inverse funds lose market value (downside bias) quickly and trades need to be avoided.

Meanwhile, on the other side of the market, biotech (IBB) has formed a top, reversed, and posted a new weekly low today.

An hourly trend-line has been formed as well (not shown). 

If it holds as (or if) IBB declines past current support (~152 area), that hourly trend is moving lower at just over -96%, annualized.

Maintaining negative trend, with declining momentum on both daily and weekly timeframes is what we’re looking for.

The objective (not advice, not a recommendation) is to move stops (shown below) and maintain the trade until stopped out or trend break.

As of this post (1:03 p.m. EST), the current price of LABD and BIS are listed in the ‘Close’ column. 

The “R-G/L” is from Dr. Van Tharp’s concept of Risk Gain/Loss.

Example:  If $1,000 of capital was “risked” (entry-to-stop) on the LABD, position, that position is now up by 6.83-R, or $6,830.

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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.