Category Archives: SPBIO

Biotech Breakdown

April 2, 2024 By in $SPSIBI, Biotech, LABD, SPBIO, Wyckoff, XBI

Surprising Weakness

When a market’s not performing as expected, then obviously, something else is going on.

The last update on biotech XBI, was expecting a bounce higher to take out potential stops in the area noted.

It’s not happening,

Instead, shown below, each bounce has less energy and, in the pre-market, XBI is trading lower.

Strategy First

Recall, we’re in a potential long-term reversal (Wyckoff up-thrust); based on the action of the market itself, that analysis is proving to be correct.

Biotech XBI, Daily

After each bounce, price action goes on to post new lows.

For yesterday’s action (Monday), not only do we have a new daily low but a new weekly low as well.

At this point in the pre-market (9:10 a.m., EST) XBI, is trading lower at 92.50, or – 1.44%.

We’re right at support levels and pressuring those levels.

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 Next Set-Up

March 28, 2024 By in $SPSIBI, Biotech, LABD, Martha Stokes, SPBIO, Spring-to-Up-Thrust, XBI 1 Comment

Breaks Channel … Heads For Potential Up-Thrust

The market is always right.

If it’s not behaving as expected, then it’s obviously doing something else.

In the case of biotech XBI, that something else, may be working its way to the next set-up.

Strategy First

Until price action proves otherwise, the overall long term reversal assessment of the sector has not changed (not advice, not a recommendation).

We’ve had a potential long-term up-thrust (reversal) that’s been covered here, and here.

That second link contains a 3-Day chart analysis.

Looking at the current price action and having it dictate what chart to use, we’ll switch to a 2-Day, which shows the potential more clearly.

Biotech XBI, 2-Day

The sector has failed to break below support in the 92 – 93, area. Instead, it has decided to bounce in what looks to be a possible minor spring-to-up-thrust.

We can see there’ve been two ‘hits’ on the upper resistance line. One, immediately after the up-thrust breakdown and one later … 4-bars later.

These hits essentially confirm the area, in effect, setting it up for potential penetration.

One has to think about where the stops are located.

If I was short this sector (I have been, but not currently), where would I place my stop?

Naturally, I’d put it right above the resistance (blue) line, exactly where everyone else has put theirs 🙂

Years ago, Martha Stokes wrote an update on why everybody gets stopped out of their trades, paraphrasing from this link:

‘The Market Makers don’t know you are there; they’re not interested in your tiny little stop order.

If your order does get taken out, it’s because too many small traders put their stops at the same location.

There’s an order imbalance. The market’s response is essentially automatic … take out the stops.’

With that, let’s see what happens next.

There’s no guarantee XBI, will penetrate the resistance area but if it does, we won’t be surprised.

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

There Are No ‘Rate Cuts’

March 22, 2024 By in $SPSIBI, Appalachia's Homestead, Biotech, Dr. John Campbell, Ed Dowd, Federal Reserve, Greg Hunter, Interest Rates, LABD, Michael Bordenaro, SPBIO, Speck-Effect, The Speck, Uneducated Economist, Wyckoff, XBI 2 Comments

‘There Is No Spoon’

We’re in the surreal; like The Matrix.

YouTube content creators have noticed the public’s inability, refusal, and denial to recognize (or accept) the truth:

Michael Bordenaro; ‘everybody’s so weak, so sensitive, they can’t handle the facts.’

Patera, Appalachia’s Homestead; discussing her lineage (Cherokee) and history, seeing the similarities of today, applying the lessons; some are more concerned about her hair and makeup.

Then, Uneducated Economist; ‘no amount of wishing is going to bring events back to the way it was. It’s effectively a new construct.’

Interest Rate Ruse

The 40-year bull market in bonds is over; rates are not going lower, they’re going higher (not advice, not a recommendation).

Ignoring or refusing to recognize this (highly probable) truth when analyzing markets, is a potential strategic error.

The longer the ruse goes on, the more violent the reaction may be when the masses (finally) ‘awake’.

All of which brings us to biotech, XBI, SPBIO, $SPSIBI.

Biotech Truth

Truth about biotech is brutal; described here, here and here.

Exactly how this will all hit the mainstream in force, is unknown. However, let’s not forget, ‘when price action goes south, bad news comes out’.

Biotech XBI, Daily

Heading south at this point, is biotech XBI.

Market test of the Wyckoff up-thrust (reversal) appears complete; previously discussed here, here and here.

As of 1:40 p.m., EST, XBI is trading back into congestion (92 – 96) and looks to have formed a trading channel.

Left channel contact line shown as No. 1, is supported by this post, potential long-term reversal.

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

The Concept of ‘Test’

March 20, 2024 By in $SPSIBI, Biotech, Federal Reserve, Interest Rates, LABD, Monty Python, SPBIO, XBI 1 Comment

… Or, Natural Market Behavior

The financial press will always come up with some kind of ‘reason’ why the markets went up or down.

However, getting to the truth of price action is sometimes boring and also requires a focused amount of thinking.

That thinking requirement, puts it ‘right out‘ (as the Brits would say) for any kind of media consideration. 🙂

Therein lies the opportunity; case in point, biotech, XBI.

The sector did not move higher today as a result of any type of ‘good news’ for potential rate cuts; cuts that so far have yet to materialize (waiting now, for over a year).

No, XBI went higher today to ‘test’ the underside of resistance after its own break through that resistance.

Biotech XBI, 3-Day

As stated in the prior update, it’s going to take some kind of extra demand to get the sector back to bullish.

For now, it’s right below resistance and testing.

Obviously, what happens tomorrow, is important.

If we’re in a test, and not a new leg higher, the expectation is for very limited upside price action … if any.

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

Odds Stacked Against Biotech

March 19, 2024 By in $SPSIBI, Biotech, Federal Reserve, Interest Rates, LABD, SPBIO, XBI 4 Comments

Below Resistance & Trendline Break

Tomorrow’s the Fed interest rate announcement; anything can happen.

The way it stands now for biotech XBI (the day prior), an upside rally is against the odds.

The chart below for the sector is a busy one.

Biotech XBI, 3-Day

Price action’s below resistance (possible false breakout), has broken an upside trend to the downside (grey dashed line) and today, has come back for a test of both.

Breaking below resistance was accompanied by increased volume; bearish.

A significant amount of demand will need to show, to get this market back to the bullish side (not advice, not a recommendation).

The Fed interest rate announcement is scheduled for Wednesday, 2:00 p.m., EST.

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

Frog In The Pot … Biotech

March 15, 2024 By in $SPSIBI, Biotech, GDXJ, LABD, SPBIO, XBI 2 Comments

Turning Up The Heat

It’s all quiet on the biotech front but for those paying attention, the temperature’s rising.

XBI (sector ETF), penetrated support and is now testing that breakdown.

At this juncture, anything can happen. A new lease on life, and we get a reversal higher.

However, probabilities argue against that scenario; multiple posts, here, here, here and here, present the case for significant downside (not advice, not a recommendation).

Going to the price action, we’ll use a 3-Day chart.

Biotech XBI, 3-Day

You might ask, ‘Who uses a 3-Day chart?’, ‘I don’t know anyone that does.’

Well, this may be the only place and that’s the point. 🙂

The 3-Day, for this market, at this juncture, shows support/resistance areas more clearly.

Notice on the current bar how the close (as of 3:15 p.m., EST) is below resistance, the blue line.

Then, look how the prior bar closed above the resistance area. The attempt to test this area (resistance breakout) and make it support has failed (thus far).

As a reminder, it’s the failed moves that get the attention of The Street.

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

Gold Miners … Trap Set?

March 13, 2024 By in $SPSIBI, Biotech, Bonds, GDX, GDXJ, Gold & Silver, Gold Miners, IWM, Life Insurance, MET, NVDA, SOXX, SPBIO, TLT, Wyckoff, XBI 4 Comments

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

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 … For Reversal

March 10, 2024 By in $SPSIBI, Biotech, CAT, LABD, NVDA, SPBIO, Spring-to-Up-Thrust, Wyckoff, XBI 3 Comments

The Set-Up, Two-Years Wide

It seems like it’s been forever.

Shown in the chart, Biotech XBI, may be set-up for potential, sustained downside.

This post from August of 2021, describes what we’re looking for; a repeating action, possibly as old as the market itself.

It’s important to note, ‘set-up’, is not, success.

‘Set-Up’, Means: Conditions have presented themselves, lending to high probability outcome (not advice, not a recommendation).

Biotech XBI, Weekly Close

Looking at the example with CAT (above link), and comparing it to the chart below, it’s similar except for the timeframe; XBI, is much longer.

Of course, downside action in CAT, reversing back to support, has yet to materialize with XBI.

That’s the point, it’s the unknown; The Danger Point®, where the risk of being wrong is least.

There’s nothing wrong with being wrong, i.e., quickly exiting a losing trade. It’s being wrong and staying wrong, that’s the problem. 🙂

The Nvidia Connection

This past Friday had wild trading action and volume in Nvidia, NVDA.

It posted a wide outside-down day, ranging over 108 points with heavy volume, 113.6-million.

The net result may be the end of the A.I. bubble; potential downside for it, and the rest of the markets (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

Real ‘Opportunities’ Are Rare

March 4, 2024 By in $SPSIBI, Biotech, LABD, Loeb, SPBIO, XBI 1 Comment

When One Is Found …

… It must be used to it’s maximum extent’.

A paraphrased quote from late Gerald M. Loeb, Vice Chairman of E.F. Hutton, Author of: The Battle for Investment Survival.

Here … Now?

Is that where we are with biotech, XBI?

Obviously, the answer won’t be known until it’s all over.

What we do have, is a potential reversal in the making that could be of significance.

No New Highs

At the open today, XBI immediately began to post lower.

It did so without exceeding the prior recovery high set three trading days earlier on February 28th.

Biotech XBI, Daily

The daily chart shows just how close XBI is to a 38.2% retrace. A bigger picture view of that retrace is in the prior update, link here.

It’s obvious we’re still at The Danger Point® where anything can happen.

However, price action tells us, it’s struggling at this area.

A decisive break lower would likely signal a top and significant reversal (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

At The Edge … Biotech

March 3, 2024 By in $SPSIBI, Biotech, IBB, LABD, SOXX, SPBIO, The Maverick of Wall Street, Wyckoff, XBI 2 Comments

Amidst The Confusion, The Biotech Set-Up

Let’s remind ourselves with a paraphrased quote, long ago:

‘Until you can completely ignore the financial press and focus strictly on price action, you will never be successful in the markets.’

Richard D. Wyckoff, circa 1934

New Highs … Except

It’s new highs for the AI insanity; all the while, CEOs and other insiders are cashing out, as reported by The Maverick, and J. Bravo.

Notably absent from this drunken cyber-bash are biotech IBB, and XBI.

Fibonacci Retrace Compete?

Both indexes (ETFs) posted a Fibonacci retrace (from 2021 highs), doing it simultaneously; IBB at 50% and XBI at 38%.

Potential reversal of XBI, link here.

We have below, even more (technical) weight for XBI pivot from up-to-down (not advice, not a recommendation).

Biotech XBI, 3-Day

Attempted breakout above resistance (magenta line) puts XBI, at The Danger Point®

Price action’s hovering above resistance while at the same time posting climactic volume.

Note that it’s just touching the underside of the 38.2% retrace level (blue line).

The last time we had a similar volume climax was the pivot point from down-to-up, in early May of 2022.

Does that mean the current volume spike signals a (potential) reversal from up-to-down?

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