Biotech Short

Late Session

Two Attempts To Short

Using the prior day’s analysis that a short entry was low risk, the first attempt was long LABD 17.78, tight stop at the prior day’s low of 17.38 (not advice, not a recommendation).

As the chart shows, it did not take long to get stopped out and have LABD post a daily low of 17.37.

Immediately after the exit (within seconds), price action began to recover. The behaviour of this action gave the go-ahead to make a second entry.

After the second entry, price never came back. The stop on the position was changed to be the low of the day: 17.37 (not advice, not a recommendation)

Stay Tuned

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 Squeeze?

SPBIO Going Straight Up For Two Weeks

The big picture for biotech SPBIO, is above. The monthly chart shows a steady progression higher since 2009.

Stretching the monthly out a bit gives us the next chart:

The two months of reversal back in February – March of this year are clear. Those two bars have yet to be negated. We’re still in a reversal lower until price action pushes back into that range.

Zooming into the monthly bars at the right side highlights a market anomaly; something called ‘the clustering of the closes’.

You can’t see it, unless you’re looking for it. Note how the blue line intersects a good number of the opens and the closes.

This location is an area of resistance. So far, price action can’t get appreciably higher than the resistance (blue line) area.

Drilling even further down to the 2-Day chart and we see the straight up action for the past two weeks … that has now contacted the axis (resistance) line and reversed.

So, was that two weeks a short squeeze?

Typically, once the shorts have covered, there’s not much left holding up the market.

Unless there’s a gap higher above the axis line at the next session, risk of going short at this location is low (not advice, not a recommendation).

Stay Tuned

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.


What’s Next For Biotech?

Mid Session

Biotech SPBIO, In A Rally

Ready For Up-Thrust Reversal?

We already have the clue.

Biotech SPBIO, just went into a spring condition and is now in a rally.

From the sage observations of David Weis, we can expect … or at least start to look for, an Up-thrust.

The unmarked daily chart of SPBIO, is below. The charts that follow, show the potential up-thrust area. After that, we have a Fibonacci 23.6%, level added.

Just to add intrigue, September 7th, is 12-days from the August 20th low … well within acceptable range for a Fibonacci 13-Days.

Spring and Up-thrust notations:

Fibonacci retrace level:

Stay Tuned

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.

Dollar Destruction? Not Yet

Before The Open

‘Dollar Destruction’ To Be Postponed

Hyper-Inflation Not In The Charts

Who looks at the actual chart anyway … so old-school.

However, what that school is telling us, the dollar’s built a solid base for a sustained rally.

Then we have this: Uneducated Economist gives us links in his report on why dollar demand could increase substantially.

If dollars are going up, gold is going down.

At this juncture, there’s still an inverse correlation.

Position Update:

On a separate but related note, the FDA announcement from yesterday was not taken into account with the biotech plan. An error if you will.

The level of malfeasance as detailed in this link was not thought to be possible.

The Project Stimulus account exited the short biotech trade with a small gain as shown below.

More analysis to come on a potential long-term biotech reversal set-up not unlike the dollar.

For now, we’re out.

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.

Gold (GDX) About to ‘Free Fall’?

What A ‘Surprise’, If GDX Breaks Down Into A Collapse

Gold and the dollar are still inversely correlated.

The dollar developed a bullish set-up starting around May, of this year.

Since that time, its been in rally.

The last update on the dollar was this one, August 4th. Indeed, the dollar has continued its move higher.

Since we have negative correlation, gold and the miners have moved lower.

Each sector is now at a critical juncture:

A resistance area in the case of UUP and support (blue line) in the case of GDX.

The market has alternated (weekly GDX, above) from choppy overlapping moves, to smooth downward thrusts.

If GDX breaks substantially lower, get ready for cries of ‘manipulation’ and ‘it’s all rigged’.

Possibly more important, such a downdraft may cause an instant change in market sentiment; from ‘risk on’, to ‘risk off’.

In that case, a market’s that’s well positioned to head decisively lower, the fastest, is biotech, SPBIO.

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.

Moderna Djab, Investigated

Before The Open

But Don’t Expect Anything

Round up the usual suspects.

Make it look like we’re doing something.

Our ‘parabolic’ report on MRNA, was posted before the open, August 10th.

That post included the following summary:

‘This is the type of parabolic rise (and blow-off top) typically seen in commodities.’

Then, about seven minutes after the open, MRNA peaked and reversed into a two-day collapse over -25%.

Down-thrust energy, the amount of downward force in price action, was literally off the chart; the strongest ever recorded since MRNA, started trading in December of 2018.

Price action leads the news. This case was no exception.

This report, just out on ZeroHedge shows there’s a half-hearted attempt to draw attention to a so-called ‘rare’ side effect.

Even so, the insiders probably figure the jig is up and they’re bailing out.

The biotech sector (SPBIO) continues its bear market decline. Yesterday, it closed down over -32%, from its February 2021, highs.

Looking at MRNA, we see a now familiar set-up:

‘Spring to Up-thrust’

A casual look at MRNA, and you can see shades of 1929, in the price action.

We’ve had the ‘crash’, the 25% decline followed by a weak rebound.

Now, there may be a sustained and long term decline (months, years) ultimately bringing MRNA, below its all-time trading lows (below 11.54).

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.

Repeating Trend … Back Again

After The Close

Inverse Fund LABD In Repeating Trend

Final Pivot Higher?

For months, the biotech SPBIO and its leveraged inverse fund LABD have shown a repeating trendline characteristic.

This time around, the two right-side trend contact points (shown above) are LABD’s (Day 34) outside up reversal and today’s Fed minutes release, reversal.

The chart below is a compressed version of LABD. It gives a better perspective on the gain potential.

Looking at the chart it’s clear why so much focus has been placed on strategically shorting biotech (not advice, not a recommendation).

If there’s a decisive SPBIO break lower, the gain potential for inverse LABD is significant.

Time frame for exit (not advice, not a recommendation) unless price action dictates otherwise, is still planned for mid-October.

Stay Tuned

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.

‘When’s the next Bear Market?’

9:47 a.m., EST

ZeroHedge Report Acts Like It’s Not Here

Jerimiah Babe says “Have You Looked Outside?”

If the mainstream media is good for anything, it’s the ability to keep the herd, the retail, (Robinhood kids, et al.) fully distracted until it’s absolutely too late for action.

Even though this report from ZeroHedge gives all kinds of ‘signals’ saying we’re not there yet; It even goes as far as showing there’s no yield curve inversion. Of course that means ‘no risk’ of bear market.

Then going on to say, ‘None of these measures indicate a bear market is near’. I mean, you can’t make this stuff up.

What’s the table above (yesterday’s close) say about what’s really going on?

At this point it’s obvious the media are not going to discuss the on-going bear market in biotech, SPBIO.

Doing so, would require some kind of investigation as to why? That would open Pandora’s box and have everyone digging for truth … something to be avoided (censured) at all costs.

Amateurs always want (need) to know why.

Livermore was never concerned with the why. He looked for ‘what’. What is the price action doing now or what is it likely to do.

As Wyckoff said, ‘the why always comes out later … after the fact’

‘Why’ is a useless trading strategy.

However, in the case of biotech, we can take a good guess what the ‘why’ is all about.

Fall and Winter are very close now. As this interview with Stew Peters reveals, Fall and Winter are when we get the real picture of ‘side effects’.

Biotech is ahead of the pack on the downside and for good reason.

Positioning:

Positions have not changed except for additions of LABD as SPBIO declines and LABD heads higher (not advice, not a recommendation).

As a reminder, this site’s not interested in day trading or even swing trading unless that’s all the market offers.

No, we’re interested in positioning strategically.

This type of trading is modeled after the host’s twenty-four years of experience with aircraft flight test and certification.

A typical project would take five to seven years to complete; have a near infinite number of complex stages along the way with each one a profession unto itself.

At this juncture, biotech may be poised for the largest implosion ever seen in market history.

Stay Tuned

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 Pivots @ Day 34

3:10 p.m., EST

Today’s Action Confirms Time Sequence

Inverse biotech fund LABD confirms Friday’s update that ‘Day 34’ (from the June 28th low) could be a pivot point.

There’re at least four contact points on the left trend line shown above.

That line has been copied and moved to the right of the chart; showing a potential contact.

Stew Peters does another fantastic job accessing the truth with one of his latest interviews.

Interesting but then again, maybe not;

I’ve never seen such an on-going event result in so many people using Biblical standards to ether describe the battle, or to say this could be it. We need to keep our lampstands ready.

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.

Russell … Rolling Over

Bearish Wedge Poised To Break Down

The Russell 2000 (IWM as proxy) has been congesting sideways for about five months.

While the overall markets, S&P, Dow, SOXX, IYR and the QQQs, have been moving on to new highs … the Russell has stagnated.

Taking a cue from Steven Van Metre’s reports on ‘who goes first’ in a downturn, it’s the small caps.

At this juncture, it looks like the Russell’s ready.

The six month daily chart of IWM below, shows choppy action.

Pulling back somewhat and labeling the bearish wedge, puts it into perspective (second chart):

Pulling out and labeling the wedge:

One item of note (not shown) at the top of the wedge, where price action pivoted lower (August 6th), is a Fibonacci 62%, retrace level.

So, we have a bearish wedge retracing 62% … along with non-confirmation of the overall highs; S&P, Dow, SOXX, etc.

Major reversals take a long time to form. However, once they get underway, it’s like a juggernaut to the bottom.

Harkening back to the oil (USO) bear market of 2014, nearly all (if not all) the YouTuber’s at the time, completely missed the bearish set-up.

What they did instead, once the downdraft started, was pump out update after update about ‘catching the bottom and setting up for the new bull market in oil’.

It never happened.

Oil continued lower for a year and a half before getting into a sideways range.

The big money’s in the big move. Monitoring the Russell provides confirmation a significant reversal’s in the works (not advice, not a recommendation).

As with biotech (SPBIO), already in a bear market, the IWM could break lower while the overall markets continue to thin-out and even make new highs.

Recall, we’re getting close to an up-coming holiday: Labor Day

The 1929, high was on the Tuesday just after Labor Day weekend.

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.