The Nat-Gas futures contract for May (NGK23), needs to post above 2.383 soon (in the next day or so), or the contract is at risk of pressing to new lows.
We’ll look at the ETF proxy for nat-gas UNG, below, showing a Wyckoff up-thrust (downside reversal) condition.
As this post is being created (8:51 a.m., EST), the pre-market session shows the futures and UNG, oscillating about unchanged.
Natural Gas UNG, Daily
As with the upside reversal identified in the biotech sector (link here), we’re just reading the tape and acting accordingly (not advice, not a recommendation).
With that said, a trade was executed and closed in leveraged fund BOIL, with the following details:
BOIL Entry: 3.15
BOIL Exit: 3.45
Profit (Loss): 9.52%
The expectation was for a much larger profit.
However, price action is not behaving as if it’s in a strong up-trend. It’s even at risk of posting new lows as a result of the Up-Thrust condition noted above.
Meanwhile, biotech looks like it’s about ready to reverse.
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.
The biotech sector’s (upside) correction is complete.
If that’s correct, it’s likely to get very serious to the downside (not advice, not a recommendation).
A massive list of fundamentals, i.e., ‘side effects’, have been documented on this sector’s reprehensible behavior (saying it politely) over the past three years.
‘The List’
From here on out, we’ll call the linked information that follows, ‘The List’. So, we have The Biotech List, linked here, here, and here.
In the past few days we can add more items to the list, here, here and here.
When The Money Runs Out …
Now, it looks like the money (and ‘patient’) spigot is running dry as reported here.
So, let’s see how that’s working itself out for chief cook and bottle washer; biotech, SPBIO.
As usual, we’re looking at 3X, leveraged inverse fund LABD.
SPBIO, Leveraged Inverse LABD, Daily
Sharp reversal to the upside.
We’re nearing the end of today’s session (2:55 p.m., EST) and price action has been relentless.
Looking at the weekly chart of LABD, we see the trendline being confirmed.
Biotech Leveraged Inverse LABD, Weekly
A reasonable expectation for the next session(s) is some type of back testing of today’s action … although it’s not required.
Positioning
Yesterday’s downside LABD, action forced the complete exit of the main position that was (in-part) established during the downside thrust on February 2nd.
Overall profit gain on the series, was just over + 44%.
So, we had partial exit with +37%, main exit with +44%.
Later in the session yesterday, it became obvious the downside correction (from March 24th) may be nearing completion; the main position was re-established @ LABD 20.27 (not advice, not a recommendation).
Today’s action puts that entry well in the green.
If this really is the next leg lower (higher for LABD), the expectation is for significantly increased volatility.
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.
This time, instead of, The subprime crisis is contained”, we have, ‘The banking crisis is over’.
Back then, as the market crashed into ’09, and then forced (manipulated) higher into 2010 and later, you intuitively knew the next time, there’s no saving it (not advice, not a recommendation).
So, here we are … at the ‘next time’.
However, this time around, it’s different … very different.
Coming out nearly every day, is the massive driver to the downside: Biotech. The updated list on that sector is provided at the end of this post.
For this update, we’re looking at the technical condition and more specifically, biotech leveraged inverse fund LABD.
Biotech Leveraged Inverse LABD, Daily
We’re early in the session (11:03, a.m., EST) and we can see a reversal (if it holds) developing.
Today, is also Fibonacci Day 5, from the high set last Friday, the 24th.
Since today may be a pivot to the upside (biotech index lower), a potential continuation channel line is drawn in the chart below.
As mentioned in the last update, a retrace was probable and hence taking profits with a partial exit.
During the past four trading days, that position has been re-established at lower prices (not advice, not a recommendation).
Insurmountable Fundamentals.
At some point unknown to us, the fundamentals will come into play.
The conditions are insurmountable … they can’t be ignored.
Said many times, this is the driving factor for the market(s) on a go-forward basis (not advice, not a recommendation).
Latest on The Biotech List
We’re going to start first with an article that surmises, the blow-up has already happened. That article is here. The report starts off with profanity; be advised.
Then, the biotech list; growing without bound:
Risk Of Cardiac Death Tripled For Young Women Following AstraZeneca COVID-19 Vaccination: Study
Bombshell Vax Analysis Finds $147 Billion In Economic Damage, Tens Of Millions Injured Or Disabled
CDC Found COVID-19 Vaccine Safety Signals Months Earlier Than Previously Known, Files Show
Three Years To Slow The Spread: COVID Hysteria & The Creation Of A Never-Ending Crisis
Biden Signs Bill To Declassify COVID Origins Intel
“I Couldn’t Remain Silent”: Physician Assistant Fired For Reporting COVID-19 Vaccine Adverse Events To VAERS
A Haunting Anniversary – ’15 Days To Slow The Spread’
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.
There may be doubters, haters, even money managers reading this and thinking that as well.
So, we’re going to get into it.
We’ll address the ‘liar’ claim, present the current state of biotech along with partial exit of the short position (not advice, not a recommendation).
Fundamentals: The Rats Scramble
Anyone with two-boosters rubbing together can see the rats scrambling; attempting to ‘normalize’ the abnormal.
For example, it’s now ‘standard procedure‘, after a Pilot’s ‘incapacitated’ (i.e., potentially drops dead) in the cockpit to roam about the cabin and ask if there’s anyone else available to fly the plane.
You can’t make this up. Nothing to see here.
Now, on to the charts.
First: Let’s Review
The chart re-printed below, is how it looked this past February 9th, as presented in this post. Recall, the actual reversal was identified to-the-day, in this post.
To go even a bit further, the Wyckoff penetration set-up was identified a day earlier, in this post.
SPBIO Leveraged Inverse LABD, Daily
Re-printed from February 9th.
Fast forward to now. This is how it looked on Friday.
From the chart above, the reversal is well underway.
Momentum has slowed a bit, hence the reason for the position to be reduced by about 13%.
If the decision to partial-exit was wrong and LABD heads immediately higher, there’s still a sizable position open.
If LABD spends the next several days contracting lower (as anticipated), there may be an opportunity to re-acquire the exited position at a lower level (not advice, not a recommendation).
The next chart shows the current trading channel.
It won’t take much sideways to down action to contact the right side. If or when that happens, we’ll see how price action behaves.
Where’s The Lie?
The spreadsheet below, is a modified version of what’s used by my firm. Note, it’s not the actual shares traded but a representation of that action.
The chart has been simplified with the initial entry (of this series) adjusted to 1,000 shares. Subsequent entries are adjusted by the same factor as the initial entry.
For the engineers, the data has been ‘normalized‘.
Working the numbers; we have $43,162.10 initial cost, $59,226.55 at the exit, yielding $16,064.45, which is just over a +37%, gain.
If there’s a lie in all of the above data, the analysis identifying the set-up, the reversal and subsequent trading actions with partial exit, I’m not sure where it is. 🙂
Note: The two left-most rows of ‘zeros’ in the chart are for commission charges. The spreadsheet was developed way back in the day when we had such things.
The right-most row of ‘zeros’ is open profit/loss.
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.
Biotech SPBIO, opened lower and has continued lower throughout the day (with 30-minutes left).
Yesterday, this post showed a potential trading channel. Today’s lower action (higher with inverse LABD) appears to confirm the channel.
We need to be mindful though; events are unfolding rapidly at this point.
We’re just minutes away from market closure and going into the weekend … does anyone really want to be positioned long? (not advice, not a recommendation).
With that in mind, the daily chart of biotech leveraged inverse fund LABD, is shown below with a compressed scale.
The first chart has yesterday’s trading channel.
The second chart is the one of concern.
Biotech SPBIO, Leveraged Inverse LABD, Daily Close
Yesterday’s trading channel
New, potentially more aggressive channel
We’ll get more information on Monday to see if this new channel is in-effect.
There are still about 30-minutes left in the session and anything can happen.
Either way, we’ve already seen the markets ‘lock-up’ with bad quotes, brokerage outages and ‘disappearing‘ bank accounts.
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.
It’s the market’s job to frustrate and bankrupt as many participants as possible.
For the highly competitive alpha, the desire to ‘be right’ and catch the absolute turn, overrides any fear of ‘pulling the trigger’.
That fear is for the timid, over-calculating, fastidious type.
Either way, the market attempts to shake-out one side (the alpha trader) or leave the other side behind (the other traders).
Volatility & Price Extremes
So it is with both Intel (INTC), and biotech SPBIO, with its leveraged inverse LABD.
For Intel, today’s action looked like it would never stop and kept screaming higher.
However, if we look at the daily chart, INTC (at this juncture) has failed to post a new extreme daily high.
The chart shows that each recent extreme has been lower than the last (prices approximated).
Intel INTC, Daily
We’ll see if the next session or sessions will be able to penetrate farther to the upside … or if today was the last gasp before heading significantly lower.
For biotech SPBIO, and the leveraged inverse LABD it was a different story, high volatility.
With that sector, the wild price swings do not make it obvious but there’s (as of today) a nascent trend confirmation and trading channel.
SPBIO, Leveraged Inverse LABD, Daily Close
It’s been about six-weeks since the biotech reversal was identified in this post.
A short entry at the location noted (LABD 12.91) would now be yielding an open profit over + 50% (not advice, not a recommendation).
It’s easy to see at this point getting in position later, when it’s obvious, sets one up to get whacked on an adverse move like we’ve had over the past four sessions.
After Hours
With about 30-mintues left in the after-hours session, inverse LABD, is trading higher between 0.50% – 1.0% and INTC is lower by -0.38%.
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.
On February 3rd, also represented as; 2/3/23, it all changed.
That was the day the ‘toxic train‘ derailed in East Palestine, Ohio.
It was also the day biotech sector SPBIO, reversed to the downside.
The biotech reversal was identified to the day with the following quote:
” … today’s action is consistent with resolution of the five-months of congestion …”
Biotech had been in a congestion zone, a bear flag, for an incredible five-months. There’s no other pattern like on the chart of SPBIO (ticker, $SPSIBI, on StockCharts).
The analysis stated that if or when this sector breaks to the downside, the extended period of congestion suggests a long, sustained, move lower (not advice, not a recommendation).
So, here we are.
Now, the downside reversal is obvious. Then again, it’s likely we’re still very early in the move as we’ll see below.
Projection Methods
We’re going to use two projection methods:
First: The standard classical chart which identifies a potential Head & Shoulders pattern.
Second: The century old technique of ‘counting’ via Point & Figure (P&F).
Biotech SPBIO, Weekly (Classical)
Two charts are in classical format. The first shows the trading channel that spans 39-weeks from week 5/13/22, to week 2/3/23.
Note: Let’s not miss the symbolism (also, here and here): May 13th, 2022, was Friday. Then we have 2/3/23.
Note the “3,000-level”, discussed in the P&F section.
Biotech SPBIO, Monthly
If the H&S pattern is in-effect and the neckline is broken, we have a measured move projection to the vicinity of SPBIO ~ 1,700 (not advice, not a recommendation).
Now, on to the P&F.
The ‘P&F’ chart has been used as a forecast tool for over one-hundred years.
The idea is to ‘count’ the number of congestion points and then project that congestion either higher or lower.
In our case of a breakdown, the projection is lower.
Biotech SPBIO ($SPSIBI), Daily P&F
The P&F chart comes up with roughly the same lower projection; approximately 1,700 (not advice, not a recommendation).
Looking at the P&F, we can see a steady amount of congestion with few breaks, that is, until we get to the left-most area.
There, we have a break of twelve boxes.
In classical P&F terms, that break of 12, indicates the SPBIO may ultimately reach the 1,700 level, but price action could be choppy after the initial count.
That initial count equates to around 3,000 for SPBIO, which just so happens to be an intermediate support level as shown on the Monthly chart.
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.
How appropriate then, that someone who typically plays the ‘village idiot’ comes out with the truth.
Whether the ‘false narrative’ is finally crumbling or not, is not directly related to analyzing price action.
It does, however, provide the backdrop.
The ‘Big Reveal’
The last update in biotech had this to say (emphasis added):
“If this is the big reversal and biotech is the downside leader, unfortunately, that could mean a planned ‘reveal’ by the mainstream media.“
What wasn’t known, was just exactly how the truth would come out. Now, we know.
All of which, brings us to the topic at hand: Biotech SPBIO.
It turns out, SPBIO, is trading most consistently, on a three-day pattern.
Biotech SPBIO, 3-Day
In Wyckoff terms, the market itself defines what timeframes and what support/resistance levels are important.
Next up, we’re going to invert the chart to mimic the price action observed on the leveraged inverse fund LABD.
Biotech SPBIO, 3-Day, Inverted
And now, the characteristics of this sector the market itself, has revealed.
At this juncture, SPBIO, trades in a sequence of 3-Days after which, if there’s a directional move, continues on for nine consecutive bars.
After nine-bars, price action typically enters a correction for an undetermined amount of time.
After the correction’s compete the market has (in the past) continued on a directional move for another nine-bars.
Then & Now
We’re currently in a directional move that’s five ‘3-Day Bars’ in thus far.
If the market adheres to its prior behavior(s), we have at least four more ‘three-days’ to go (not advice, not a recommendation).
Note, the current reversal was identified to the day, with this update:
“However, today’s action is consistent with resolution of the five-months of congestion (not advice, not a recommendation).”
The fact the congestion period for SPBIO has taken so long to (apparently) resolve itself, has produced the potential for price action to go farther, last longer than anyone would normally expect.
That move if it happens, connects well with the introduction at the top of this post; a large part of the public has been informed in no uncertain terms, it was all a lie.
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® 