Life Insurance Index
The expectation for Monday, is some version of a lower open and lower close.
If that does not happen, then we’re not in the wedge, trend, breakdown as shown (not advice, not a recommendation).
Stay Tuned
Charts by StockCharts, TC2000
The Danger Point®, trade mark: No. 6,505,279
At The Edge
Events are unfolding rapidly.
The insurance sector, specifically life insurance (so far), is the whale under the surface (not advice, not a recommendation).
While Chubb Corp’s not life insurance, it’s the close cousin, property insurance.
Unlike the banks as pointed out at this link, if there’s trouble, there’s unlikely to be a bailout.
Chubb Corp. CB, Daily Close
We may find out on Monday, if CB is, or is not, following the down trendline (not advice, not a recommendation).
Stay Tuned
Charts by StockCharts, TC2000
The Danger Point®, trade mark: No. 6,505,279
Will ‘Inflation’ Hit The Actuaries?
Since no-one tells the truth anymore, why not have ‘inflation’ be the excuse for the ‘excess‘ surge in mortality.
A surge that’s likely to result in wholesale changes to the actuaries (not a forecast).
Life insurance, a boring industry; nothing (unexpected) ever happens, until now.
As shown at this link, it’s all about to change.
Previously discussed here, life insurance could be the biggest ‘under the radar’ event for the year (not advice, not a recommendation).
Going back to the link, it had this to say:
“We may find out as early as next session, if MET is in a downtrend or spring position, ready to move higher … “
From that point, MET indeed launched off the spring set-up. Then, it posted an upthrust, a repeating pattern.
MetLife MET, Daily
The spring was generated off of the earnings release that progressed into the up-thrust set-up.
The result was a decisive outside-down bar on May 20th.
Note the dashed grey trendline; currently declining at approximately -70%, annualized.
To Short or Not
Everyone has their own risk tolerance.
From a personal standpoint, I have no plans to short MET directly (not advice, not a recommendation).
Instead, it could be a proxy for ‘unexpected events’ coming to light about a sector which up to now, has been ignored.
Stay Tuned
Charts by StockCharts
The Danger Point®, trade mark: No. 6,505,279
The Biggest, Of All?
Just like the Nat-Gas reversal, which is now on-going, Life Insurance may be the biggest downside sleeper of all (not advice, not a recommendation).
Searching the YouTube vortex, turns up this, on the largest cap of the sector; Met Life, MET (time stamp 2:27).
It’s the usual suspects. Another (almost) knee-jerk, ‘buy-the-dip’.
Let’s take a look at what’s really happening with Life Insurance, looking at the long-term view.
Life Insurance Sector, Weekly Close
The last major melt-down during ’07 – ’09, had the index collapse over 76%
Moving to the topping action highlighted in the zoom area, we have the following:
Then, on to the largest cap in the sector, our chief cook and bottle washer, Met Life (MET), there’s this:
We may find out as early as next session, if MET is in a downtrend or spring position, ready to move higher (not advice, not a recommendation)
The chart nuance advocating against a viable spring is the reduced upside volume on Friday when compared to a day earlier; up volume contracts 46%, when compared to downside volume on Thursday.
Stay Tuned
Charts by StockCharts
The Danger Point®, trade mark: No. 6,505,279
Is This, The ‘Go-Forward’ Model?
In just one day, Globe Life closes down – 53.14%, on historic volume, over 35-million shares.
No matter the narrative, it shows just how fast a market can implode.
Years ago, while watching an episode of Wall Street Week, with Louis Rukeyser, one of his guests commented on a corporation that released (unexpectedly) bad earnings.
He said … ‘I believe in the cockroach theory. Where there’s one, there’s more’.
Does anyone think Globe Life is, or will be, an isolated incident? This could even be a ‘Lehman Moment‘ and we just don’t know it (not advice, not a recommendation).
Up-coming (potential) problems with life insurance have already been covered; best described in this brief four-minute clip, link here.
The Biotech Connection
The connection between biotech and life insurance can be correlated with this link and this one.
Biotech, XBI, Daily
The chart below, is slightly different from one’s typically presented on this site.
It’s on the daily timeframe but it’s compressed to better show the sector sub-dividing lower.
Yesterday’s Fibonacci analysis may still apply but we won’t really know until we see tomorrow’s action.
Stay Tuned
Charts by StockCharts
The Danger Point®, trade mark: No. 6,505,279
Is The Fear Exhausted?
It’s a confusing time.
Semiconductors with chief cook and bottle washer Nvidia, seem to be reversing. Other sectors like biotech and mid-caps were never part of the mania.
Add to that, biotech and life insurance may be correlated (more on that, in another update).
As the market looks to pivot lower, bonds are also pivoting lower or at least under pressure.
In response, one can say there’s been sort of a panic into the mining sector GDX, GDXJ; like it’s somehow more safe there.
Let’s see if the miners really are the safe-space.
Junior Miners GDXJ, Daily
As the chart shows (as of 12:35 p.m., EST), we’re pushing into known resistance (blue line) at the 37.00, area.
There’s also a Fibonacci time frame. Today is ‘Day 55’, from the December 22nd high.
Not only are we at Day 55 from the 12/22/23 high, but we’re also at Day 21, from the February 13th, lows.
Essentially, GDXJ is about to post a Wyckoff up-thrust condition, the area for potential downside reversal.
Stay Tuned
Charts by StockCharts
The Danger Point®, trade mark: No. 6,505,279
Last Gasp Before August 23rd?
The SOXX chart pattern (below), is telling us we’re likely in a case of …’buy the rumor, sell the news’.
Yesterday’s action may have negated any immediate reversal downward.
Now, it looks like we’re going into a terminating wedge targeting SOXX higher to approximately 550 – 560 (not advice, not a recommendation).
Of course, anything can happen.
Semiconductor SOXX, Daily
Note, the potential for a bearish MACD divergence if SOXX moves to new highs.
If we thought there was hysteria now, just think what’s it’s going to be like if SOXX breaks to the upside.
Party, like it’s 1999
Then, Biotech SPBIO
Meanwhile back at the ranch, with about a half-hour to go before the regular session, biotech leveraged inverse LABD, is hovering at yesterday’s lows.
Biotech SPBIO, Leveraged Inverse LABD, Daily
Support (blue line) has been penetrated.
Price action has stopped dead … thus far.
This sector has been the downside leader (LABD, higher) in the past so, we’ll see if that’s happening now.
The ‘Life Insurance’ Correlation
There appears to be correlation with potential downside reversal in biotech and possible downside reversal in the life-insurance sector.
We’ll discuss that in another update.
Stay Tuned
Charts by StockCharts
The Danger Point®, trade mark: No. 6,505,279
The Danger Point® 