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 that’s where we are now (a big if), price action SPBIO, will not stay at elevated levels long.
Summary
If we’re in yet another shakeout, the expectation is for price action to retrace the opening gap higher within the first hour of trading.
How price action behaves if/when that happens will help determine if we’ve had a failure; SPBIO, heading much higher or one more shakeout before lower levels.
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.
Sometimes you feel like an idiot and sometimes you don’t 🙂
Question: How do you know where the market’s going to go?
Answer: Put in your stop; that’s where it goes.
The stop level mentioned in yesterday’s update was not physically placed in the market but a mental identifier; indicating if the LABD trade was subject to failure.
As if on cue; no sooner was the stop posted than today, the market heads right for it.
In or Out
With the level being tagged so easily, it means that one’s thinking is right along with the amateurs, doing the same thing. Ouch.
So, price action penetrated the LABD 26.50, lows.
It’s what happened next that’s important.
It took less than one hour for LABD, to reverse off the lows and begin to print decisively higher.
Therefore, we just witnessed a run on the stops.
At the trader’s discretion, LABD-22-05, was maintained throughout the stop-run process.
The hourly chart of 3X Leveraged Inverse Fund LABD, provides detail; note LABD got itself back above an existing trend line.
SPBIO 3X Leveraged Inverse LABD, Hourly
Time is approximately 2:11 p.m., EST
Typically, a ‘bump-and-run’ move like this signals the kick-off for price action.
Summary
Biotech appears to have gyrated enough at the extremes to frustrate both the bulls and bears.
With today’s run, we may now be ready for a directional move; LABD to the upside.
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.
With a new daily low printed for biotech SPBIO, we’ve got confirmation of yesterday’s sell signal (not advice, not a recommendation).
To show that biotech is the weakest of them all, an updated chart (below) has the major indices ranked in order of downside action.
Prices as of 11:12 a.m., EST
Index Table
It’s a no-brainer (almost).
Even with the recent rebound, SPBIO remains the weakest.
From a Wyckoff standpoint, if one is going to short the market, his approach was to select the weakest sector(s) as they’re likely to fall farther, faster.
It’s the complete opposite of the amateur who spends his time trying to pick the top of the highest flyer.
We’re interested in opportunity; not bragging rights.
Let’s go straight to the 3X Leveraged Inverse Fund LABD, hourly basis.
SPBIO 3X Leveraged Inverse LABD, Hourly
Slowly but surely, LABD is competing the spring set-up and testing action.
If you’re not looking, it’s nearly imperceptible.
However, we’re still at the stage where the test can fail. We’re still at The Danger Point®
A reasonable soft-stop would be today’s low @ LABD 26.21, with a hard stop at yesterday’s low @ LABD 24.60
‘Soft-Stop’ meaning, if it’s hit, probabilities of trade failure have just increased significantly.
Summary
As can be seen on the side-bar, we’re short this sector with LABD-22-05, and TDA-LABD-22-02 (not advice, not a recommendation).
If price action continues to proceed as expected, the next update will show a repeating trendline that’s sure to catch one’s breath.
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.
In what may be just the beginning of similar actions, is this the pivot point?
Part of a lawsuit’s process is ‘discovery’. That’s probably the last thing any ‘institution’ wants.
ZeroHedge picked up the news, linked here; the comment section is telling.
Potential for a significant reversal in SPBIO, has been on the radar for about three-weeks.
What’s price action saying at this juncture?
SPBIO, Daily
For starters, within the first hour of today’s session, we’ve already had an ‘outside-down’ print; last session’s highs and lows have been exceeded by today’s action.
Shifting gears for the next chart, we’re looking at 3X Leveraged Inverse Fund LABD.
LABD, Hourly
The Wyckoff spring set-up is clear. The testing discussed in this update, is per-the-book for Wyckoff action.
‘Tests’ can always fail.
That’s why it’s called ‘The Danger Point’. It’s the location where the risk of being wrong is least (not advice, not a recommendation).
The next chart, also LABD, highlights the record volume on two time-frames, daily and hourly.
This is a potential ‘changing of hands’ from weak to strong for the short-side on SPBIO.
It should be noted, last week’s volume for LABD, was also a record, making it three time-frames.
Summary
As this post was being created, LABD continues to rachet lower into what is now a deep test.
Currently trading at LABD 25.98 (mid-session), we’ll see if the test holds and LABD finishes higher for the day.
Meanwhile, the fundamental backdrop and pressure continues to build.
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 good news for the bears and the shorts; this morning’s action was probably the final push higher for biotech SPBIO.
The bad news; if that’s the case (a reversal) and the right-side trend-line has been verified, it could be the very beginning stages of a massive collapse.
It’s about midway through the day’s session. The leveraged inverse fund LABD, is printing a repeating characteristic that identifies a reversal.
Biotech SPBIO 3X Leveraged Inverse LABD, Hourly
This is how it looks around 12:50 p.m., EST with no mark-up.
Next, we’re going to zoom in on two areas of interest. A previous reversal and the apparent reversal in progress.
The price action is near identical.
First a false reversal that’s followed by the real one. That’s where we are now with today’s action.
Summary
A follow-up post using the weekly time frame is due out before the session open tomorrow.
All short positions remain active (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.
Summarizing trading actions for the week and the action plan, going forward.
Open Positions:
Currently there are two open positions: details below.
TDA-YANG-22-01
Short the Chinese FXI via YANG (not advice, not a recommendation)
Enter YANG @ 10.95, with current stop @ 10.89
Friday’s close @ 14.05, Open profit = 28.3%
FXI, 3X Leveraged Inverse, YANG, Daily
Shown above, YANG appears to be in a trading channel (grey lines).
As a result of moving decisively higher (FXI, lower), the stop on the position is to be moved to YANG 12.79 (not advice, not a recommendation) at the next trading session.
LABD-22-05
Short the biotech SPBIO via LABD (not advice, not a recommendation)
Multi-entry LABD @ 28.11 (combined), with current stop @ 26.57
Friday’s close @ 26.98, Open loss = – 4.02%
SPBIO, 3X Leveraged Inverse, LABD, Daily
Last week contained both record daily volume (since inception) for LABD, as well as record weekly volume.
Downward thrust energy has dissipated. The down-move appears to be exhausted.
Supporting the assessment LABD is at or near a pivot point (reverse higher), we’re going to review the 3-Day chart.
SPBIO, 3X Leveraged Inverse LABD, 3-Day
Note, there is one more trading session (this Monday) needed to complete the current ‘3-Day’ bar.
First, we can see downward thrust dissipating as on the daily chart.
The prior three-day bar is identified as ‘Ease of Movement’.
It’s the first bar in the entire down-sequence starting on 6/14, where upside action was able to penetrate the prior (3-Day) bar’s high.
That’s an indication of demand.
After upside penetration, price continued lower.
However, here’s the important part, LABD, closed higher and posted a higher low when compared to the prior 3-Day bar; subtle clues a reversal may be in the works.
There’s one more trading session needed to complete the current 3-Day bar and anything can happen.
However, based on the analysis thus far, it’s reasonable to expect LABD, to continue to post higher; that we’ve reached the extreme of downside action.
The 3-Day below shows the higher lows and includes a zoom of the area.
Adding to the reversal case, on a weekly close basis, SPBIO reached underside resistance during the week of 7/8. This week just past, it closed slightly lower (chart not shown).
Summary
It’s the weekend and so we have the usual suspects of bad news … any of which could be the butterfly in the amazon, the final upset for the markets.
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® 