Category Archives: LABD-24-18

Biotech Bulls … Exhausted

October 26, 2024 By in $SPSIBI, Artificial Intelligence, Biotech, David Weis, LABD, LABD-24-18, LABD-24-19, LABD-24-20, SPBIO, XBI Tags: , ,

Downside Leader?

Biotech XBI, spent the last three months hitting resistance, going nowhere.

That doesn’t mean there weren’t trading opportunities; there were but the big (expected) break to the downside never came … that is, until now, maybe. 🙂

Looking at the weekly chart, it’s completely different from the current, topping, on-going A.I. mania.

Biotech reached its all-time high, years ago.

Biotech XBI, Weekly Close

The sector’s been retracing to Fibonacci 38.2%, since late February, this year.

Moving in closer to the daily, the last three (short) trades in the sector are noted (not advice, not a recommendation).

Biotech XBI, Daily

For detail on how and why trades were selected, click on the side bar for that trade number.

Note: We have a repeating pattern (between green lines) of ‘spring-to-up-thrust’.

The Week Ahead

Anything can happen.

With that said, ‘normal’ market behavior would be a ‘blip’ upward to test resistance, the black line.

However, there’s no requirement to do so.

If price action gets above Friday’s high, obviously it’s time to exit (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 … Set-Up, In Progress

September 30, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-18, SPBIO, XBI 1 Comment

Nearing The Danger Point®

Biotech, XBI, has pushed itself higher into a potential Up-Thrust (reversal) condition (not advice, not a recommendation).

If XBI gets to the 99.75, area, it’s a 38.2% retrace form the high set on September 19th, to the lows on the 26th.

Biotech XBI, Daily

Today is Fibonacci Day 8, from the highs of September 19th.

When downside momentum started to fade, short trade, LABD-24-18, was closed on the 27th, for a profit of 11.76%.

If XBI gets to the 38.2% area and stalls, it may present another low-risk opportunity for a short position (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, Fibonacci, & The Tape

September 24, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-18, Livermore, Loeb, SOXS, SOXS-24-16, SOXX, SPBIO, Wyckoff, XBI Tags: , , , ,

Reversal of Significance

Wyckoff (tape reading) analysis identified the potential reversal in XBI.

In the past two days of trading, biotech XBI, is decisively lower (not advice, not a recommendation).

However, there’s more to this story.

As we’ll see below, Fibonacci is at work as well.

Biotech XBI, Daily Close

From closing high on 2/27/24, to closing high on 9/19/24, was a Fibonacci 144 days (minus one).

Ladies and Gentlemen, it doesn’t get much better 🙂

The black lines show resistance penetration, up-thrust and reversal.

Livermore, Wyckoff & Loeb

The trading methods of the three market masters above, can be summarized as:

Strategy, Tactics and Focus.

Livermore’s method of ‘what’s going to happen in a (potential) big way’, pointed to biotech.

Wyckoff’s analysis was used to identify (to the day), the potential for a significant reversal.

Loeb, who is less known, was the former Vice Chairman of E.F. Hutton, disparaged ‘diversification’ as the ‘averaging of errors’; meaning, if you don’t know what you’re doing (in the markets), you ‘diversify.’

We can see all three at work in the selection to go short biotech via LABD (not advice, not a recommendation).

Fixing Errors

For those watching, you got to see up close and personal a trading error on shorting the SOXX; specifically, an -11.6%, hit, link here.

As of this post, four trading days later, that loss has been fully recovered and then some.

This is how should be done.

Clear the mind, look for (don’t force) another opportunity, get to back to business.

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 Power Goes Out on Biotech

September 21, 2024 By in $SPSIBI, Artificial Intelligence, Biotech, Dr. Elder, LABD, LABD-24-18, NVDA, SPBIO, XBI 1 Comment

More ‘Natives’ Leaving

Like Yogi Berra used to say:

“It’s deja vu all over again’.

Only this time, instead of Nvidia, it’s biotech, XBI.

Nobody’s called on our hapless student at left … no, we’re still pumping out bullish propaganda to the masses.

Anything can happen and biotech could magically levitate to new, more manic highs.

However, the chart below, paints a very sobering picture.

Biotech XBI, Weekly Close

“What do you see?”

It’s been over six months of price action posting and then attempting to penetrate (closing above) the highs of the 101.50-area.

At Resistance: Bulls Exhausted

The center panel is Elder’s Force Index.

It shows (as with NVDA) a succession of force declines with each attempt to push higher.

The last force unit (19.4) has fallen off a cliff, compared to the unit prior (123.7); Force Index down over 84%.

Price action could always grind itself higher.

However, the inference is, the bulls are exhausted (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 (fake-out) Breakout

September 20, 2024 By in $SPSIBI, Biotech, Bonds, Federal Reserve, Interest Rates, LABD, LABD-24-18, SOXS-24-16, SPBIO, TLT, Wyckoff, XBI 1 Comment

That Didn’t Take Long

It was just four days ago, the mainstream (in this report) was telling us, be on the lookout for a biotech breakout.

That was then … here we are now.

Price action in XBI, attempted to break higher at the Fed announcement.

That move appeared to fail by the end of Wednesday’s session … then came Thursday’s launch higher.

However, that move may have failed as well.

Biotech XBI, Hourly

At this point, we’ve posted a Wyckoff Up-Trust (reversal).

If this is a significant reversal, we’re still in the very early stages; at The Danger Point®

Positioning

As can be seen in the sidebar, a short position was opened (yesterday), LABD-24-18.

That position has been increased in size during this session (not advice, not a recommendation).

The SOXX (short) Exit.

Yesterday, SOXS-24-16, was exited with an -11.6%, hit; so, everyone can see the effects of breaking one’s discipline (not respecting the position stop).

Don’t force the trade … sounds so simple.

Getting back to work, the XBI false breakout was recognized early and the trade opened.

Today, so far, we have follow-through, confirming the reversal.

Bonds Continue Lower

Bonds, TLT, are currently posting an outside-down (reversal) on the weekly timeframe.

The last time there was an outside-down on the weekly, was over two-years ago; week of August 5th, 2022.

After that, bonds declined a whopping 32% before (slightly) recovering.

Now, they’re posting outside-down … again.

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