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.
From the outset, the premise for biotech XBI, was this:
We’re in a huge up-thrust, several years in the making (not advice, not a recommendation).
With a set-up that big, downside potential was projected to be just as big, link here.
Then came the hard part, validating the premise and getting into position.
Nural Plasticity
So, it’s been on again, off again; a total of seven short trades; LABD-24-06 – LABD-24-12, with an eighth, LABD-24-13 opened, as of today.
The entire (closed) series has been profitable.
However, during that time, assessment of (major) downside potential shifted from confidence to caution, and now back to confidence.
‘Sticking to one’s guns’, no matter what the market (the tape) is saying, is a sign of real trouble.
The market itself directed the entering/exiting.
With that, let’s move on.
The ‘New’ Paradigm
Reviewing the host of ‘experts’ in the press and YouTube alike, (except for UE), everybody has their reason on why nothing (bad) will happen until after the ‘election’.
The last go-round should have broken that paradigm completely; but no, we’re still hanging on.
The ‘new’ paradigm is probably, ‘no’ paradigm. 🙂
From a Wyckoff perspective, the financial press is to be ignored except for when data releases are scheduled.
What’s in the release is not important; it’s the time and date itself, warning of potential volatility.
Biotech XBI, Daily (inverted)
Once again, inverting the chart to show the short-side (LABD) potential (not advice, not a recommendation).
Note: The dashed blue lines, an extension of the support level shows we’re also in a potential spring set-up at one higher timeframe, the weekly; more background, link here.
Positioning
As noted above, a new short position was opened via LABD, during this session (not advice, not a recommendation).
Typically, discussion of open trades within the trading community is (or should be) taboo. As Elder said years ago, there’s the real risk of ‘ego’ causing errors in discernment.
With that said, I might exit this trade at any time, without notice, without explanation.
Veteran traders will agree with that statement; when something’s ‘off’ with a trade (only known to them), it’s time to get out.
Nonetheless, a hard stop for today’s position would be yesterday’s LABD, low of 6.97 (not advice, not a recommendation).
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.
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.
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.
No one knows if this is ‘The top’, or just ‘A top’, until it’s all over (not advice, not a recommendation).
This update for Nvidia, said we’re nearing Fibonacci Week 89 (from the October ’22, lows); look for evidence of a reversal.
With three-hours left in the session, NVDA is on track (along with the SOXX) to posting a weekly reversal bar.
Nvidia NVDA, Weekly
The chart updated to show we’re at ‘Week 89’.
The fact (minus 3-hours) we’re getting a reversal bar on ‘Week 89’, is potential validation of the Fibonacci count.
The market itself is telling us where to look.
With the prior update letting us know the air is going out of support for continued A.I., today’s action may be a significant reversal (not advice, not a recommendation).
Update: 2:07 p.m., EST
Housekeeping Note:
While under no obligation to discuss trades, nonetheless, for those following the biotech short (LABD-24-12), that trade has been exited (for now) with profit (not advice, not a recommendation).
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 day started out with a bang; market’s up sharply on CPI print.
One could think, months of biotech (short) analysis, has been blown apart with this morning’s sharp move (not advice, not a recommendation).
Remember, this update said watch out for ‘French’ guys:
“However, just like the video snippet in the link above, what looks to be a dramatic conclusion to weeks if not months of work, could be completely derailed by a bunch of ‘French’ guys hanging out in a British castle.”
Well, here they are. 🙂
From a trading, positioning perspective, is it really that bad, what’s going on?
For that answer, we’re going straight to the hourly chart of 3X Inverse Leveraged Fund LABD.
Biotech 3X Leveraged Inverse LABD, Hourly
Early morning price action penetrated the stop level given in this update.
However, as can be seen, price action behavior of LABD was different than (inverse fund) SOXS, under similar conditions; it did not keep going lower but stopped dead.
It’s clear, action at this point, is pulling away from the lows.
Rate Cuts Not
Way back in January of 2023, this site proposed the ‘rate cut’ discussion was nothing more than a ruse; keeping everybody (the press, especially) busy acting like Pavlov’s Dogs, while the big rug-pull was being set-up.
With that in mind, here’s the real story of what’s going on (not advice, not a recommendation).
Positioning
In a little bit of a market ‘cheat’, LABD is currently trading above the prior stop level.
At the risk of making a gross trading error, the short position in biotech (via LABD) is being maintained (not advice, definitely not a recommendation).
However, even as this post is being created (3:15 p.m., EST), biotech XBI continues to erode back into the trading range with LABD, continuing to rise.
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.
‘If, on the next pull-back, volume contracts, the spring has been tested …’; David Weis
On the chart, that’s what we have.
Today also looks to be an apparent 50%, retrace on Fibonacci Day 3, from the June 6th, reversal.
Taking it all together, the next session(s) could be very interesting.
Biotech XBI, Daily (inverted)
Is it textbook?
We have a spring set-up penetration (resistance non-inverted), a swift move upward and now, a test back to 50% (level not shown), on contracting volume.
If the test is complete, the obvious expectation is for a higher open (lower non-inverted) at the next session (not advice, not a recommendation)
Rule of Alternation
Using this update and the discussion of ‘alternation’, we can already see price action is more volatile and so far, has ‘simple’ form.
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 last update presented a multi-timeframe analysis; medium to long-term (potential) bearish set-up in biotech, XBI.
This morning’s action appears to be confirming the up-thrust potential.
Now, we’ll get into why this move may happen quickly.
Multiple Timeframes
If the premise is correct, that we’ve gone through a month-long test of the weekly (timeframe) up-thrust, testing may now be complete.
Naturally, the power behind a weekly move, has more substantial effect than daily.
Next, the topic at hand; Prechter’s ‘Rule of alternation’.
Biotech XBI, Daily
The first chart shows detail on the last up-thrust.
Price action penetrated resistance, then posted five-days of congestion before breaking lower.
We’re labeling that congestion action as ‘complex’.
Next, we have the current situation. An apparent up-thrust in its initial stages.
If what we have now, is indeed an up-thrust, taking all the prior considerations into account, it’s reasonable to expect the subsequent move will be less complex, having different form, and move more quickly (not advice, not a recommendation).
In any case, we have a ‘hard stop’ for a short position, at the session high (not advice, not a recommendation).
Our Quest, Is At An End
Like something out of Monty Python, the entire analysis of downside potential feels like the quest is at an end.
However, just like the video snippet in the link above, what looks to be a dramatic conclusion to weeks if not months of work, could be completely derailed by a bunch of ‘French’ guys hanging out in a British castle 🙂
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.
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.
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.
