Biotech, Test-In-Progress

By The Book

With about 40-minutes left in the session, biotech SPBIO, appears to be completing a test of its downside reversal.

Prior updates have shown the potential for a massive trading range; right along with a very weak reversal at Fibonacci 23.6%.

We’ve happened to locate a short video from the Wyckoff Stock Market Institute, detailing the nuances of Wyckoff spring action.

That video is linked here.

Watch the video and then look at the chart of leveraged inverse fund LABD, below.

SPBIO, 3X Leveraged Inverse LABD, Hourly Chart

If the test has competed, we can expect a swift LABD rally (spring) to the upside (down for SPBIO).

Summary

The potential for a significant down-move in SPBIO, has already been covered.

Reference updates linked here, here, and here.

If this is a move of major significance, we’re still in the very early stages.

Positions have already been established; LABD-22-05, TDA-LABD-22-02 (not advice, not a recommendation).

SPBIO itself, will define the next course of action.

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279

Biotech: Before The Open

Last Session’s Record Volume

Depending on today’s action, yesterday may have been a ‘changing of hands’ for biotech; specifically, the leveraged inverse fund LABD.

We’ll start first with the longer time frame; the weekly, to show that SPBIO is at or near a Fibonacci 23.6% retrace.

Biotech SPBIO, Weekly

Looking just to the left of the right-side action we see a significant congestion area that’s highlighted below.

Note how price action has oscillated around that area.

It’s about three-months at this level before breaking lower and now, coming back to test.

The resistance is significant.

Next, is the inverse fund’s daily chart and the record volume.

SPBIO Leveraged Inverse LABD, Daily

Depending on today’s action, this is a potential ‘changing of hands’ from weak to strong.

We saw that such volume in the gold market (GLD) was indeed an infection point.

Concerning gold (GLD), back on March 20th, the report linked here, had this to say:

“From a Wyckoff, tape-reading approach, we have to trust what the chart is telling us.

That is, gold has reversed.”

How true that was. GLD never looked back and is now down around – 18%, from its highs.

The same could be happening for biotech.

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279

Biotech … Good News, Bad News

Reversal, Finally Here

The good news for the bears and the shorts; this morning’s action was probably the final push higher for biotech SPBIO.

The bad news; if that’s the case (a reversal) and the right-side trend-line has been verified, it could be the very beginning stages of a massive collapse.

It’s about midway through the day’s session. The leveraged inverse fund LABD, is printing a repeating characteristic that identifies a reversal.

Biotech SPBIO 3X Leveraged Inverse LABD, Hourly

This is how it looks around 12:50 p.m., EST with no mark-up.

Next, we’re going to zoom in on two areas of interest. A previous reversal and the apparent reversal in progress.

The price action is near identical.

First a false reversal that’s followed by the real one. That’s where we are now with today’s action.

Summary

A follow-up post using the weekly time frame is due out before the session open tomorrow.

All short positions remain active (not advice, not a recommendation).

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279

Biotech’s Liquidation Sale

Won’t Know For Sure, Until It Hits Bottom

Watching and waiting for the downside reversal; looks like it’s here.

With about thirty-minutes left in the session, biotech SPBIO, is printing a reversal bar.

It’s not just the reversal that’s important but we could also be on the right edge of a massive trading channel.

Biotech SPBIO, Daily

It’s hard to see what’s really going on until we compress the channel and look at the possibility.

It doesn’t seem real.

However, we all have to realize we’re in uncharted (literally) territory.

If this sector begins a significant decline, that’s when to expect “bad news” coming out in the mainstream … likely to accelerate the downdraft.

Positioning

The short position in FXI (via YANG) was closed out (TDA-YANG-22-01) at 10.64, with a 15.4%, gain.

A new position was opened in LABD @ 25.80, as LABD was reversing off the session lows (not advice not a recommendation).

Trade identified as TDA-LABD-22-02.

The original LABD-22-05, was maintained, still active.

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279

Positions & Plans

Expectations, For The Week Ahead

Summarizing trading actions for the week and the action plan, going forward.

Open Positions:

Currently there are two open positions: details below.

TDA-YANG-22-01

Short the Chinese FXI via YANG (not advice, not a recommendation)

Enter YANG @ 10.95, with current stop @ 10.89

Friday’s close @ 14.05, Open profit = 28.3%

FXI, 3X Leveraged Inverse, YANG, Daily

Shown above, YANG appears to be in a trading channel (grey lines).

As a result of moving decisively higher (FXI, lower), the stop on the position is to be moved to YANG 12.79 (not advice, not a recommendation) at the next trading session.

LABD-22-05

Short the biotech SPBIO via LABD (not advice, not a recommendation)

Multi-entry LABD @ 28.11 (combined), with current stop @ 26.57

Friday’s close @ 26.98, Open loss = – 4.02%

SPBIO, 3X Leveraged Inverse, LABD, Daily

Last week contained both record daily volume (since inception) for LABD, as well as record weekly volume.

Downward thrust energy has dissipated. The down-move appears to be exhausted.

Supporting the assessment LABD is at or near a pivot point (reverse higher), we’re going to review the 3-Day chart.

SPBIO, 3X Leveraged Inverse LABD, 3-Day

Note, there is one more trading session (this Monday) needed to complete the current ‘3-Day’ bar.

First, we can see downward thrust dissipating as on the daily chart.

The prior three-day bar is identified as ‘Ease of Movement’.

It’s the first bar in the entire down-sequence starting on 6/14, where upside action was able to penetrate the prior (3-Day) bar’s high.

That’s an indication of demand.

After upside penetration, price continued lower.

However, here’s the important part, LABD, closed higher and posted a higher low when compared to the prior 3-Day bar; subtle clues a reversal may be in the works.

There’s one more trading session needed to complete the current 3-Day bar and anything can happen.

However, based on the analysis thus far, it’s reasonable to expect LABD, to continue to post higher; that we’ve reached the extreme of downside action.

The 3-Day below shows the higher lows and includes a zoom of the area.

Adding to the reversal case, on a weekly close basis, SPBIO reached underside resistance during the week of 7/8. This week just past, it closed slightly lower (chart not shown).

Summary

It’s the weekend and so we have the usual suspects of bad news … any of which could be the butterfly in the amazon, the final upset for the markets.

Just a brief list of current events, below:

Texas cattle being dumped on the market

Locomotive workers may go on strike

Child size coffins ordered in bulk.

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279

Biotech … Trend-line’s End

The Next Leg

Down markets have a nasty habit of revealing the bad news of truth.

Robert Prechter Jr., said it years ago (Wave Principle), the public needs to be conditioned to receive (and even demand) bad news.

Bear markets condition the public’s consciousness to fervently seek that which they previously ignored.

This reversal could be trend-line’s end for biotech.

If so, during the next leg down, we may be about to get the revelation.

The previous post was valid but a little early … by one day.

As we’ll see below, If the current action holds, it’s a potential major pivot to the downside.

Biotech SPBIO, Daily Chart

The un-marked chart does not look like much at this point. However, the mark-ups below reveal the potential.

We’ll start first with an obvious trend-line.

Next, is a similar trend to the left of the original and then, a potential trend at the right edge.

Where it gets interesting, is when the chart is compressed to show the symmetry of the trading channel.

It’s hard to dispute that it does not exist … there it is.

Positioning

Currently short this sector via LABD (not advice, not a recommendation), with LABD entries at 27.58, and 29.29 for a combined entry of 28.11.

Trade identified as LABD-22-05, with current stop at the session low LABD 26.57.

Summary

SPBIO, is edging lower with near term support areas on the hourly chart (not shown).

We’re still at the danger point; price action can reverse its nascent down move.

However, this time the fundamentals could provide the backdrop; a potential black swan (of ‘side effects’) and especially if the overall markets (S&P, Dow, NASDAQ) have also reversed.

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279

The ‘CPI’ Pivot

‘The Fed’s Work Isn’t Over’

With the CPI just released, the article at this link says, ‘the Fed’s work isn’t over.’

They’re so right; but it’s not the work they (at MarketWatch) think it is.

We should all know by now, the truth is right in our faces, but we have to be able to ‘see’.

What was seen yesterday, was that biotech appeared to be reaching an extreme.

As a result of the price action, a change was made in positioning out of (Basic Materials short) SMN and into a biotech short via LABD (not advice, not a recommendation).

Part of the reason to focus on LABD was the record volume as shown on the chart below.

Biotech 3X, Leveraged Inverse LABD, Daily

Note how the Force Index shows downward thrust energy is dissipating … even with the record down volume.

Next, we have the terminating wedge formation; indicating a potential reversal is at hand.

A wedge formation is a typical signal for an up-coming (potential) reversal.

It occurs at the tail-end of a sustained move; meaning a wedge is the last pattern to be formed. Sometimes there’s a throw-over (or under) and sometimes not.

Either way, it’s the end of the directional move.

After The Open

We’re just after the open; this is how it looks for LABD.

The first order of business is usually an attempt to close the gap.

As with the prior set-up in YANG, linked here, the objective is to allow LABD, close the gap as much as possible before adding to the existing position, LABD-22-05 (not advice, not a recommendation).

That may happen or not. This market’s already at a pivot extreme.

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279

Biotech: Torn Between Two Forces

On The One Hand … Is Truth

Let’s start with Dr. Jane Ruby, first.

At this link she explains to the kindergarteners (who even at this late stage, STILL believe the lie), the truth about ‘The Speck’.

Go to time stamp 6:37 and watch; you can clearly see her exasperation as she has to go through it one more time.

We also have this going on behind the scenes as well.

On the other side is the continuous stream of fear propaganda. Just go to your local TAAS (sorry, FOX) news outlet to hear the latest lie du jour.

With that in mind, let’s go straight to the index for the day, biotech SPBIO.

The last analysis proved to be flat wrong.

There was a breakdown as anticipated but that move did not follow through. It was the precursor to an up-leg which is where we are now.

Biotech SPBIO, Weekly Close

It’s obvious.

Last week was a test of the resistance (blue line).

Thís week started with biotech sharply lower (early today) but then coming back to test … where we are now.

That test is starting to reverse late in the session (around 3:00 p.m. EST).

Let’s go straight to the inverse fund LABD

SPBIO 3X Leveraged Inverse LABD, Daily

A very tight wedge has formed.

Price action attempted to break out but has come back for a test. This is where risk is least (not advice, not a recommendation).

Positioning

The Basic Materials short (SMN-22-01), while profitable, was not going as planned. That position was exited at SMN 14.29 … you can see it as the low of this session on your trading platform.

SMN 14.29, is me 🙂

That capital has now been used to position short biotech, SPBIO at LABD 27.58. trade LABD-22-05 (not advice, not a recommendation).

The current stop is the low of the day @ 26.98.

Summary

Even as this post is being generated LABD is pulling away from the lows. With about one hour left in the session, it’s at 28.18.

The LABD entry was an initial position; there’s plenty of capital left to increase the line if trade conditions warrant.

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279