Biotech … Stall & Reverse

Heading Off The Cliff ?

We’re about to find out.

The last update presented that whatever happens with biotech (SPBIO), it’s likely to be decided quickly.

That conclusion was based on the ‘rule of alternation’ and the fact, the whole short squeeze event from last week, did not result in a new weekly high.

That, Was Then

What we have now so far in today’s session, is an attempt to move higher by SPBIO, which appears to have stalled and now, looking to reverse.

The reversal part won’t be confirmed unless, and until a new daily low is posted.

For today, posting a new low is somewhat of a tall order because of Friday’s wide trading range … but we’ll see.

Instead of going to the actual index, SPBIO, we’ll look at the 3X leveraged inverse fund LABD

SPBIO, 3X, Leveraged Inverse, LABD

Note:

The chart below, is a 3-Day chart with Friday, completing the last ‘third’ day.

As price action has moved lower, energy behind that move is weakening; seen in the thrust divergence

Why a 3-Day Chart?

When’s the last time you saw a 3-Day, 2-Day, or 6-Day, or any other non-conventional chart in anyone’s analysis?

Anybody? … Bueller? Bueller?

It’s not different, just to be different.

Shown below, we have the same 3-Day LABD, compressed and marked up with a trading channel.

At this juncture, the 3-Day shows the nuances more clearly.

If this trading channel is in-effect, that is, if it’s active, potential exit points for an LABD position at this point in time, would be 105, or 240 (not advice, not a recommendation).

For LABD, to get anywhere close to those points, especially the second (240-level), biotech would need to collapse.

Summary

There’s plenty of chaos to go around. We have those who are still arguing whether or not ‘it’s the bottom’.

Such arguments are potentially (and likely) from those completely unprepared.

As Jerimiah Babe said in one of his latest videos, ‘something’s going to break’.

When or if that break happens, it won’t be to the upside.

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

‘Investors’ Buy Dip Over & Over

“Fuel” For The Downside

Once this next level gives way, carnage will (likely) reach all-time records.

Over a centry ago, Wyckoff said in his writings, it’s those on the wrong side of the bull trade, who provide the fuel on the way down.

As reported by Reuters, that downside fuel appears to be building on a massive scale.

The Fed This … The Fed That

What a colossal waste of time … that is, trying to figure out what The Fed is, or is not, going to do.

As The Maverick reports in this update, The Fed has a higher authority. It should be no surprise to any of us at this point … they’re ‘just following orders’.

Mirroring that sentiment is Dan from i-Allegedly, saying ‘This is not the bottom‘.

Part of the reason there’s so much focus on earnings, financials and The Fed, is that it’s a whole lot easier to do that, than actually getting down to work and learning price action.

That my friends, as Wyckoff said in his text Studies In Tape Reading, ‘takes many years and many losses’.

So, let’s take a look at what that ‘tape’ is telling us concerning the biotech market.

Biotech Inverse BIS and LABD

The prior analysis on IBB, is still valid.

However as was done with real estate, changing from 2X inverse to 3X inverse, the same has happened with biotech; from BIS, to LABD.

Since the overall bearish assessment has not changed, this morning’s upward move in the markets was used to re-position to a higher (inverse) leverage vehicle … LABD (not advice, not a recommendation).

The hourly charts below show the exit of BIS and the entry of LABD.

Biotech 2X Inverse, BIS

Biotech 3X Inverse, LABD

As this post is being written 12:55 p.m., EST, price action’s at the danger point.

We’re at the extreme; the risk is least but price can go either way.

Summary

Watching that action in real time, it looks like LABD wants to go higher; currently trading at 57.20-ish.

If LABD is higher, that means SPBIO, is moving lower.

Unless price action of biotech (IBB, SPBIO) and the overall markets signal a change of behavior … the bear move is still in play.

If we get a significant break lower, ‘retail’ that’s not positioned properly, will provide the majority of downward thrust energy.

It’s no different than it was in Wyckoff’s time, over a century ago.

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 … The Breakdown

Wedge Break Has Been Tested

It’s been a while since we’ve talked about the chief cook and bottle washer in this whole financial collapse scenario.

However, biotech has not been forgotten.

There are two indices (ETFs) being tracked: IBB and SPBIO.

Both entered bear market territory long ago. SPBIO topped out, way back in February 2021; IBB topped later, in August the same year.

Leveraged inverse funds are LABD, and BIS, respectively. LABD is 3X inverse with BIS a 2X inverse.

The Long Term

One thing unique to David Wies, was to look at the long term: Monthly, Quarterly and Yearly charts.

Doing so, puts one in a strategic mindset … not easily swayed by the latest prattle from media sources.

If we look at biotech, IBB, on a quarterly basis we have the following chart.

Biotech IBB, Quarterly

The mark-up of this chart is where it gets interesting.

A terminating wedge that’s been over seven years in the making has just broken to the downside.

Not only that, when we get closer-in (on the weekly), we can see the wedge break has been tested and now today, appears to be reversing to the downside (shown on daily).

Biotech IBB, Weekly

With zoom

The daily shows a Fibonacci retrace to 38%; then today, a downside reversal.

You can see where this is going.

Based on the above analysis a short position in IBB, has been opened via BIS (not advice, not a recommendation).

The trade is BIS-22-01, with an (initial) entry @ 28.5173

Summary

The news on specific biotech companies is already out if one knows where to look.

Stated time and again on this site, we’re just in the beginning stages of the repercussions.

It even looks like they’ve moved on from the initial scam and are cooking up a new one.

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

Bears To Seize Control ?

World Chaos, Continues

The long-time reasoning behind this site’s ‘short only‘ trading plan, is becoming abundantly clear.

For years, there have been no ‘long’ trades on anything except leveraged inverse funds.

The premise? A ‘disconnect’ can happen at any time.

At this point, we’re getting to see those potential disconnects in real-time on a near continuous basis.

The past week bled-off the massive put leveraging; thus, setting the market up for (potential) downside reversal.

Getting Back To ‘Normal’

Those who bought the dip in Pavlovian fashion, may be thinking at some point, we’ll get back to ‘normal’.

News Flash:

What’s happening now, Is The Normal.

This is how it’s going to be on a go-forward basis.

Conflict, shortages, supply chaos, weather weaponry, nuclear saber rattling, bank runs are now, all normal.

With that, let’s look at last week’s markets and the set-up for the week ahead.

The SOXX, Rebounds

The last update discussed being short the semiconductors via inverse fund SOXS (not advice, not a recommendation).

The stop was hit, and that position (SOXS-22-02) has been closed out with a gain of about 6.2%.

Note how in the daily chart below, price action came right up to the stop level shown previously, then penetrated that level ever so slightly.

The ‘market’ knows where you are.

Being (stopped) out lets one look for a better opportunity.

Biotech (SPBIO), The Next Set-Up:

Turns out that biotech, SPBIO, may be at a low-risk juncture for a short via leveraged inverse fund LABD (not advice, not a recommendation).

Yesterday’s post highlighted some of the reasons for a biotech reversal.

The analysis below, builds on that reversal potential.

The weekly chart of SPBIO, has a channel and Fibonacci time correlation(s).

The next chart zooms-in on a possible target for a move lower.

Leveraged Inverse, LABD

Another reason to think SPBIO, is ready to continue downward, can be seen on the 4-Hour chart of LABD.

The prior report had daily range narrowing.

Getting closer into the action, we see the 4-Hour range narrowing as well.

In addition, down-thrust energy (Force Index) for Friday’s move appears to be exhausted.

Positioning

Early or late? If you’re trading professionally, that decision must be made ahead of time.

Some traders like to wait for ‘confirmation’ of a move and there’s nothing wrong with that.

For this author however, waiting for confirmation means I’m late. I’m behind the curve and ‘chasing’ the market.

With that said, LABD was entered towards the end of the session on Friday at 41.05 (not advice, not a recommendation).

We’ll find out soon enough, if Monday’s open will be in-the-green.

Summary:

Even as this post is being created, world news continues to pour in … this time, from North Korea.

Anything can happen in the coming week. The markets could somehow ‘shake-off’ all of the news and move higher.

However, probability suggests market continuation to the downside.

At this juncture, we’re about six hours before the Sunday futures open.

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 … Ready To Reverse

Highly leveraged (3X Inverse of SPBIO), LABD, looks ready for upside reversal.

The next chart shows trendline contacts.

Volume increased on Friday while the trading range narrowed significantly.

The next chart’s a little busy but zooms in on the volume and the daily range in question.

The overall markets have rebounded during the past two trading days.

Inverse funds have declined correspondingly.

Interestingly, LABD seems to have maintained its upward bias (down for SPBIO) better than other inverse funds like SDS, DXD, SOXS, QID and TZA.

Summary:

For downside action, one wants to look for the weakest sector.

Look for a new daily LABD high on Monday, (new low for SPBIO).

This is a typical entry signal with stops at the last session’s low; currently LABD, 40.08 (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, At The Danger Point

In More Ways Than One

For now, we’ll discuss only the technical aspects.

We’ll leave the rest of the truth for mainstream news.

Discussed previously, the sector (SPBIO) was left with our assessment that it may reverse higher into a retrace; combined with an up-thrust/reversal.

That was then.

Biotech, SPBIO, Now:

Daily un-marked chart of SPBIO:

Below, a marked-up chart showing penetration and move off support (Spring Condition).

Included, is the 38% retrace level … location for potential test and reversal:

As with the on-going reversal in gold (GLD) and the miners, GDX, GDXJ, we’ll have to see how this plays out.

Unfortunately, as we head into what used to be the regular flu season, those who received ‘protection’, are going to find out they’re not protected at all.

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.

The Danger Point®, trade mark: No. 6,505,279

Peak Oil ?

Will Demand Collapse Faster Than Supply Contracts ?

Is There A Biotech Connection ?

The Next Chess Move

Everyone’s good at telling you what the problem is; it’s a financial collapse !!!

No, Duh!

The hard part is, how to position for the unknown at least for those of us in the serfdom.

The so-called elites, the oligarchs know (or think they know) exactly what’s happening.

They move their chess players and we move ours. The goal is to position for (potential) profit with the caveat we all make it out on the other side.

Personal Anecdote (skip to XOP Analysis if not interested):

I have a close family member that’s been a school teacher for about twenty years. He/She is well known in the local town and has a significant number of connections.

Because the children being taught are typically small, ranging from kindergarten to fourth grade, those kids tend to reveal all that’s happening at home.

Their revelations include financial status (or lack of), political leanings as well as abuse that’s happening physically and sexually. It’s the real deal.

As an aside, any potential crimes are fully documented and reported.

The point here is, this contact has revealed that children, family members and extended family members are severely ill or dropping dead after receiving an ‘injection’.

However, the surviving family members are just too stupid (or afraid) to put it together; the injections are causing the deaths.

It’s some kind of mental block and/or mass hypnosis.

It’s wrenching and heartbreaking.

However, at the same time and this is where it gets harsh, for those of us in the faith, we know Biblical scripture tells us the Lord delights in hiding the truth.

One has to diligently seek out truth. It takes work and a prayerful form of neural plasticity; the ability to be mentally flexible.

Truth is not for the lazy, the incompetent, the coward.

Why should immutable truth come to a coward or idiot that does not diligently seek it?

New ‘Variant’:

The rapidly increasing deaths may be passed off by the mainstream media as some kind of new ‘variant’.

That ‘variant’ brings us to the market at hand; oil and oil exploration XOP and possible biotech connection.

XOP Analysis:

As with biotech SPBIO, and its leveraged inverse fund LABD, so too we have Oil & Gas Exploration XOP, and leveraged inverse fund DUG.

The long term un-marked, weekly chart of XOP:

Next, we have price action contacting a multi-year trendline:

Moving closer on the weekly, we have a terminating wedge:

Terminating wedge(s) typically result in price action moving opposite of wedge formation.

In the case above, that would be a reversal to the downside.

This past week’s bar was a reversal. It’s a potential signal the formation is complete and XOP is ready for the downside.

Of course, if XOP is about to head lower, inverse DUG is about to head higher (not advice, not a recommendation).

Daily chart of DUG.

The Biotech (SPBIO) Connection:

The weekly chart of SPBIO, shows momentum on downward thrusts has slowed. The black dashed arrow’s trajectory is becoming more shallow:

If biotech is going to retrace, the solid blue line is a Fibonacci 38%, as well as potential location for an up-thrust (downside reversal).

A new variant (which is likely injection injury) may be used by the media to drive biotech higher to the retrace level.

We’ll have to wait and see if there’s a reduction of the population as we head into the end of the year. It’s a known fact, the injection destroys the immune system … so far, permanently.

That would be a factor in the up-coming flu season.

Remember that?

We used to have a regular flu season … but that all disappeared (re-branded, actually) with our current situation.

Summary:

Nearly all recessions have started with rising oil prices.

However, we’re not in a recession but an all out collapse. The economy is contracting at the fastest rate in U.S. history.

Our current position is demand will collapse faster than supply restriction (not advice, not a recommendation).

Or, we could still have rising oil prices but it won’t be enough to offset the cost of drilling and production; lack of demand may be overwhelming.

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: Last Squeeze ?

Whack The Bears One-More-Time

The daily chart above, shows our current location.

Inverting the chart and expanding the price action gives us the following:

Was today an attempt to break the up-trend (down-trend, non-inverted)?

Wyckoff called this type of sharp adverse move ‘threatening action’.

You won’t know if the market’s going to carry out the threat until the next session or subsequent sessions.

Positioning:

My firm’s (core) short position remains unchanged (not advice, not a recommendation).

However, the main account holding of LABD, was reduced by approximately 2.9%, during this session to adjust for margin requirements.

It’s important to note, the after hours session is already trading about 1% higher (for inverse LABD); a typical occurrence when the day’s move was a shakeout.

We’ll see if that action carries over to the regular session tomorrow.

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.

The Danger Point®, trade mark: No. 6,505,279

Biotech, Repeating Set-Up

If Set-Ups Repeat, Why Bother With The News?

Because, it’s the news that’s pushing around those who are easily manipulated, causing set-up(s) to materialize.

Decades ago, Wyckoff said that a speculator, will never be successful in the markets until they can completely ignore the news.

Sure, it’s important to monitor the news … but not for the purpose of speculating or investing.

Keep track of it to identify what they’re trying to accomplish. What’s the desired outcome for their press releases? Who are they trying to influence and maybe ask why?

Wyckoff went on to say (paraphrasing).

‘Put the other traders and speculators to work for you. Stand aside and let them spend their own money to drive prices into a high probability set-up.’

With that in mind, last week’s ‘Shakedown’ update on biotech SPBIO, and inverse fund LABD, said this:

“Because LABD, price action has hit the 21.40 area three times and rebounded, … it could, … could head lower for a penetration and spring set-up.”

Well, today was the penetration and spring set-up 🙂

Inverse Biotech Fund LABD

Hourly Chart

We’ve had the penetration of support … the rebound as well as what looks like a test.

Expectation for LABD, is to move higher from here to the top of the trading range.

Positioning:

My firm remains short SPBIO via LABD (not advice, not a recommendation).

Biotech’s showing weakness in the face of all-time highs in the S&P as well as the Dow.

What’s going to happen to ‘already in a bear market biotech’, when the overall markets reach their final top?

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.

The Danger Point®, trade mark: No. 6,505,279

Moderna (injections) Suspended

Biotech, Bricks In The Wall

Complete Implosion.

This site’s been steadfast for over a year; biotech above all others, has the highest chance of sustained, long-term collapse.

‘Collapse’ is an overused word these days. It may have lost some meaning.

How about the word ‘exposure‘?

Biotech has the highest chance of being exposed (not advice, not a recommendation).

Sweden Suspends Moderna:

There it is out in the mainstream: Indefinite suspension.

About a week ago, the fist bullet item in this list discussed Moderna; that when price action reverses to the down-side (after being a market darling), the lawsuits start.

It’s not the lawsuits themselves, but the discovery process that’s part of the trial … if it goes to trial.

One can guess with some assurance, the last thing Moderna wants is for this baby (any potential lawsuit) to go to discovery and trial.

This could be one of those times, popcorn is justified; watching it all from the sidelines.

Southwest Backs Off:

Looks like greed is more powerful than jabs.

At least we can see the priorities and keep that for future reference.

Now, all-of-a-sudden, it makes no sense to destroy executive stock options with forced collapse of the organization.

Glad we have such genius executives in charge. 🙂

Meanwhile, Back At The Ranch:

While all that’s going on, we still have the financial press talking about earnings and sales and ‘pent up demand’ like any of that is important or actually real.

The only reality at this point in time, is the price.

Biotech SPBIO, Inverse Fund LABD Analysis:

We’re going to start with the un-marked chart of SPBIO:

Next, we’re going to invert that chart; giving a better perspective of what the inverse fund LABD, is tracking:

Repeating a previous observation; price action over the last two months (from late August to now), has calmed down.

Price range has narrowed and movement looks orderly.

Our take on this; bears have assumed control and are preparing (opening positions) for a directional move.

Compared to my firm and probably anyone reading, their capital is unlimited. They’re also patient.

Depending on the level of greed, they’re keeping price action from a major breakout until positioning is complete (not advice, not a recommendation).

Wyckoff termed this phenomenon (a century ago) as the ‘composite operator’, or the ‘central mind’.

This is how markets work. There’s no getting away from it.

By making a transaction, any transaction, one has implicitly entered the ‘arena’ where the gladiators (the professionals) are ready to take all you own.

Moving in a little closer, we already have a trend.

Price action bounced off support on Friday (resistance on the inverted chart) but closed nearly unchanged.

Summary:

When you have satire like this and especially at time stamp 6:35, the pressure continues to build … almost from all sides.

My firm remains short SPBIO via LABD (not advice, not a recommendation).

That is, until the market itself says the bearish analysis is wrong or it’s time to exit.

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.

The Danger Point®, trade mark: No. 6,505,279