Only the Beginning?

Biotech vaporization could go thermonuclear.

That was a potential outcome proposed in this update, just seven days ago. 

On September 3rd, five days ago, Biotech (IBB) had its largest down-draft since June 11th.

Coincidentally, on that same day, this news was released concerning polio outbreaks in Africa.

Scroll down the article and a familiar name will appear.  It’s also the name that has provided significant backing for Moderna (MRNA).

Moderna has fallen off the radar.  MRNA, with no P/E and no yield.   What?  Nobody wants to stampede into the ‘cure’? 

The top of Moderna was identified in this post.  Along with a summary that enough of the public had been fleeced on the way up; it was time to get them on the way down.

MRNA is now down 34% from the top and down 23% from the last update. 

That might sound cruel or harsh to discuss the markets in this way.  It’s not nearly as bad as what Dr. Elder describes in his first book; Trading For A Living (summarizing):

‘The markets are like a medieval battlefield.  You enter with full knowledge you may not come back.  You are trying to kill your opponent, and him, you.

If you lose, all you own goes to him, including the wife and children.’

So, being part of the herd, stumbling around in the markets waiting to “fleeced” sounds way better.

The original premise of going short biotech was technical, fundamental and political. 

Technically biotech (IBB) is the only sector with a weekly MACD sell signal as identified in this post.  Fundamentally, we’re using Stockman’s assessment the sector is ‘bottled air’. 

Politically, the elites may be starting to fight amongst (and eat) themselves as evidenced by the news release linked above.

Anything can happen and IBB could bounce and move higher during the next session.  From a probability standpoint, the foundation of farce appears to be showing its true identity and origins.

The daily chart of IBB, is following (at this juncture) a Fibonacci projection. We’ve met and bounced off the 61.8% level. 

If the trend remains to the downside, the next projection is 100.00, then 161.80, at IBB levels (blue ovals) 120.00 and 110.00, respectively.

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.

Random Notes

Notes for the day … not in any particular order.

Lumber futures:   Prices up over 180% in five months.

2020-08-12_11-40-37-notesInterest rates are rising.  10-yr rates up.  Similar set-up as August, 1987?

Frustration with the mindless herd growing.

Biotech testing yesterday’s move lower.

Moderna (MRNA) has formed a wedge and is near a downside breakout.

Drunk and ‘working’ from home.

Internet censorship:  Oppenheimer Ranch Project no longer monetized.

Silver and gold, future test of new lows?  At time stamp 2:58, Sajad hints at same ‘testing the lows’ scenario as was posted with Silver Up, Then Down on July 25th.

 

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.

Mission Accomplished!

One day after Pump-n-Dump?, MRNA launches above and closes above resistance on record volume of 103-million shares.

Next day, price action closes below resistance and the trap is set.

2020-07-21_9-49-12-MRNA-Daily-3-bar-notesYesterday (Monday) at the open, MRNA gaps lower -7.4% and didn’t look back.  It closed down -12.83%.

Today, another gap lower.  Price action is hovering in what appears to be an attempt to stabilize.  The question is, stabilize for what?

It probably doesn’t matter as the professionals may have finished their directive.

That is:  establish long positions at low prices, generate news events to get the general public excited, continue to foment the price higher, go all out with maximum volume, exit the longs and establish the shorts.  After that, price action takes care of itself.

That’s the way it works 

Anything can happen and even more (bullish) volume can come from somewhere to drive the price to new highs.

With that in mind, there’s a possibility of an underside test of resistance.  Expectations are that such a test (should it occur) will fail and price action continue lower.

It’s likely we’ve seen the top of MRNA.

 

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.