First, biotech SPBIO, ‘printed’ into the danger point.
The next day (yesterday), it ‘closed’ into the same region.
The charts below show where things left off at that close.
As is frequently done, farther down, we’re going to invert the chart to show price action similar to the leveraged inverse fund LABD.
Biotech SPBIO ($SPSIBI) Daily Close
Adding zoom for more detail
Next, we invert the same chart to show how it looks going short via LABD (not advice, not a recommendation).
Biotech SPBIO ($SPSIBI) Daily Close … Inverted
We can see that price action has been in a similar set-up before; just prior to a significant decline (non-inverted).
Summary
Obviously, Monday’s print into the danger point was taken as the set-up for a reversal. That reversal appeared to be taking hold based on that day’s price action.
Yesterday, reversed the reversal but then wound-up printing and closing into a danger point; an up-thrust condition on the standard chart and a spring condition when looking at it on the inverted scale.
Positioning
As was done in prior action, the position size in LABD, was reduced as price retreated (not advice, not a recommendation).
However, the position was not exited entirely.
Pre-market action has LABD, trading higher about 1-point or 2.0%. This behavior is consistent with a potential reversal.
Today’s close is the important part.
Higher for LABD, and we’re in a potential reversal for a significant move; lower and it’s time to exit completely and stand aside (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.
This morning’s action in biotech SPBIO, indicates we’re done with the upward corrective move.
The prior short position LABD-22-02, was reduced throughout the downward push over the past week and then exited completely in this morning’s pre-market session.
Within minutes after the open, as LABD pushed lower (SPBIO higher), it became obvious, a significant reversal was at hand.
It took LABD, just a little over two minutes to clear out stops and then begin an upside reversal.
Amateur vs. Professional
Dr. Alexander Elder covers the amateur/professional difference in his book Come Into My Trading Room.
That is, if an amateur gets stopped out or exits with a loss, they never come back.
Even if the trade reverses to go their direction, they refuse to re-position … having been ‘spanked’ by the market.
Breaking free of the (engineering) perfectionist mindset, is just one challenge during the journey to professional.
It must be overcome to achieve sucess in the markets.
Re-Positioned, Short
All of the above to say, the short in biotech has been re-established: LABD-22-03 (not advice, not a recommendation).
The difference at this point is, there’s a high level of expectation on what’s likely to happen next.
As Wyckoff put it a century ago, the reversal and re-position, enables us to be ‘in tune’ with price action.
Biotech SPBIO, Weekly
We’re going to invert the chart and mark it up.
First off, we can see the rule of alternation at work.
Next, we have at least two potential trading channels.
This one …
And this one …
We’ll let price action itself define which one (or none) is in-effect.
When we get a corrective move that resolves itself, at times, it creates a pivot point with a different rate of advance or decline.
That means, there’s more than a good possibility, the second (more aggressive) channel, is now dominant.
Summary
As this trade progresses, we’ll cover potential areas where the existing position can be increased with as low risk as possible.
As this juncture, LABD is trading in the area of 55.25.
The early (pre-market) loss has been more than recovered and we’re now well in the green for the day.
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 a weekly closing basis (as we’ll see below), it’s obvious.
Upward (net) progress in biotech SPBIO, has come to a standstill.
While the media continues to foment the lie that somehow interest rates have reached their limit, or ‘Da Fed’, is going to do this or that, behind the scenes the plan … set out years ago, continues to unfold.
Before we get to the charts, let’s not forget what’s happening ‘out there‘. The number of idiots seems to be increasing without bound.
As Goethe said way back in 1826, ‘There is nothing more frightful than ignorance in action’. He was being polite with the ‘ignorance’ part.
Now, on to the charts.
The un-marked, chart of biotech SPBIO, is below.
The second chart zooms-in, showing the percentage changes on a closing basis.
Biotech SPBIO, Weekly
Zoom in, showing net progress.
One would think, since biotech has dropped so significantly, there’s no more (downside) left.
Certainly, anything can happen.
However, the premise is, the overall collapse is still in the early stages.
We have not (yet) had a 50% – 90%, drop in the S&P.
In addition, pension funds are likely to go broke.
So all those $250,000/year ‘retired’ lifeguards that J.B. has spoken about? Well, how do you leverage that ‘skill’ to another industry?
SPBIO, Inverted
Next up, the inverted chart of SPBIO, to mimic the action seen in leveraged inverse, LABD.
Then after that, is the same chart marked with a potential forecast of where price action may be heading (not advice, not a recommendation).
Now, the markup showing potential action should biotech continue its decline.
Zooming in on the last few weeks of action.
The fact price action has bounced from this area of the chart, tells us the trading range is valid; the blue line is being recognized by the market.
Now as shown, we’ve come to a halt.
So, what happens next?
Positioning
As SPBIO ground its way higher (LABD lower) over the past week, the short position, LABD-22-02, was reduced further but not eliminated (not advice, not a recommendation).
Since there’s no more net progress upward and we’re still in an overall downtrend, expectations are for biotech to either stall, or reverse, continuing its trend lower.
As stated previously in this post, the market’s prior congestion was ‘complex’.
So, we’re expecting ‘simple’ this time around; all of which lends support to more downside.
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.
First off, biotech (SPBIO), may already be in a collapse.
Of all the major sectors, it’s leading the way lower; down -61%, from all-time highs, set in February of 2021.
With SPBIO, lower by that much, are there still downside opportunities?
Only you can be the final judge of that.
However, for my firm, I’m not waiting around to see what happens next; we’re already short (not advice, not a recommendation)
SPBIO, Summary
As we’ll show below, SPBIO’s maintaining price action in a downside channel, declining at approximately -97.8%, on an annualized basis.
If that channel is held for the next three months (a big if) and if there’s no ban on short sales (as happened last time in 2008), and if the vehicle itself (LABD) remains viable, we can look for a -90%, decline from all-time highs, by October at the latest.
Why -90% ?
We’re using our chief, cook, and oh so, ‘disruptive’ bottle-washer, Carvana (CVNA) as the example.
The last report on Carvana, highlighted the possibility that it’s ripe for implosion.
The very next session, that implosion started in earnest.
Currently trading at 26.53, CVNA is down -92.96%, from all-time highs.
So, -90% (or more), for biotech seems reasonable 🙂
Throwing in a couple of anecdotal comments from J.B., Dan, and Patera, and voila! ‘This sucker could go down.’
Moving on to the main topic.
Biotech SPBIO, Weekly
Here’s where we are with the un-marked chart.
We’re going to compress the chart and put in the channel lines. The lower horizontal line marks a decline of -90%, from all-time highs.
If price action maintains the right-side trend line, a 90% decline, targets right around October this year.
Summary
This analysis could be blown away, rendered invalid, at the very next session.
That’s the way of the markets.
As sated, current positioning is to be short the sector via LABD, with trade LABD-22-02 (not advice, not a recommendation).
As a result of today’s action thus far, we’ve got a hard stop for LABD, currently @ 55.73.
Even as this post is being created, SPBIO action continues to grind down; threatening to post a new weekly low.
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 last update presented that whatever happens with biotech (SPBIO), it’s likely to be decided quickly.
That conclusion was based on the ‘rule of alternation’ and the fact, the whole short squeeze event from last week, did not result in a new weekly high.
That, Was Then
What we have now so far in today’s session, is an attempt to move higher by SPBIO, which appears to have stalled and now, looking to reverse.
The reversal part won’t be confirmed unless, and until a new daily low is posted.
For today, posting a new low is somewhat of a tall order because of Friday’s wide trading range … but we’ll see.
Instead of going to the actual index, SPBIO, we’ll look at the 3X leveraged inverse fund LABD
SPBIO, 3X, Leveraged Inverse, LABD
Note:
The chart below, is a 3-Day chart with Friday, completing the last ‘third’ day.
As price action has moved lower, energy behind that move is weakening; seen in the thrust divergence
Why a 3-Day Chart?
When’s the last time you saw a 3-Day, 2-Day, or 6-Day, or any other non-conventional chart in anyone’s analysis?
Shown below, we have the same 3-Day LABD, compressed and marked up with a trading channel.
At this juncture, the 3-Day shows the nuances more clearly.
If this trading channel is in-effect, that is, if it’s active, potential exit points for an LABD position at this point in time, would be 105, or 240 (not advice, not a recommendation).
For LABD, to get anywhere close to those points, especially the second (240-level), biotech would need to collapse.
Summary
There’s plenty of chaos to go around. We have those who are still arguing whether or not ‘it’s the bottom’.
Such arguments are potentially (and likely) from those completely unprepared.
As Jerimiah Babe said in one of his latest videos, ‘something’s going to break’.
When or if that break happens, it won’t be 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.
As we speak, economic activity is shutting down … fast.
Amazon shipments cancelled, gas stations going dry, banks halt lending, real estate sales collapse.
Meanwhile, the market’s in a short-squeeze.
What happens next?
We’ll discuss real estate and biotech farther down but first the data sources.
Dan from i-Allegedly reports here, he still has a couple of rubes (my word) that think the market just bottomed out.
Good luck with that.
As we’ll show below, the real estate bear market (IYR) rebound, was identified ahead of time.
Next, we have Red Hurricane describing one semi-trailer load after another being cancelled. He hauls for Amazon.
Shipping activity’s contracting, seemingly, by the minute.
Lastly, this link where the D-word, ‘Depression’ is used within the first one-minute, twenty seconds.
Bottom-out in the stock market? Probably not.
So, let’s take a look at real estate IYR, and see where it might go next.
Real Estate IYR, Weekly Chart
The last update (link, here) showed potential to rise into a test of resistance. That’s exactly what happened.
Back then:
And now:
With zoom
Obviously, the upward test happened much quicker than anticipated … but it was anticipated … no surprise.
Real estate got itself into Wyckoff spring position; so, a rebound (test) is normal market behavior … short-squeeze or not.
If it was a squeeze and if it’s over, we can expect an immediate drop in price action. We’ll analyze that as it plays-out in the coming week.
Now, on to biotech, SPBIO
Biotech SPBIO ($SPSIBI), Weekly
Some housekeeping first.
Obviously last week, with being short, more downside action was anticipated resulting in upside for LABD.
On Friday, that did not happen. Biotech was part of the squeeze as well.
The short position via LABD, identified as LABD-22-02, was reduced but not exited completely (not advice, not a recommendation).
At present this is where we are.
First, we’ll start by inverting the chart to mimic the action of 3X inverse, LABD.
Next, we’ll zoom-in and highlight the ‘squeeze’.
Doesn’t look like much when viewed that way does, it?
Next, we’re going to zoom-in, on the zoom
In spite of all the squeeze chaos on Friday, price action could not post a new weekly low (high on the non-inverted).
We’ll see this Tuesday, if that’s important or not.
This post is getting long but let’s end with the rule of alternation. The same chart is marked up below.
If this rule is still in-effect, we’re at a juncture where one can expect a ‘simple’ alternation.
We’ve already had complex action on the prior congestion; so, we can expect current action to be simple in character.
That means, price action’s not likely to stick around at these levels whether it’s going up or down.
Based on the above analysis, the expectation for Tuesday’s open is a gap lower for SPBIO and higher for LABD.
If that does not happen, something else is at work … we’ll report on that as necessary.
Summary
Has the market bottomed out? Not likely.
Those who are at this late stage, still arguing with Jerimiah Babe and Dan (and Patera), that the market’s rebounding, everything’s fine, are in a state of delusion.
The mindless herd following spending with ever newer cars, moving up to the McMansion, opulent vacations, posting it all on Facebook is most decidedly, gone.
It’s finished. It’s Done.
The problem is, as J.B. notes above (time stamp 7:15 and 8:30), those still living that life don’t seem to know it’s over.
For the leaders, the tiny minority and those reading this post, who are, or who have been preparing for years, it means potential huge (life changing) opportunities.
That is, as long as the markets, the banks and other infrastructure stay open; not guaranteed in any way.
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.
Once this next level gives way, carnage will (likely) reach all-time records.
Over a centry ago, Wyckoff said in his writings, it’s those on the wrong side of the bull trade, who provide the fuel on the way down.
As reported by Reuters, that downside fuel appears to be building on a massive scale.
The Fed This … The Fed That
What a colossal waste of time … that is, trying to figure out what The Fed is, or is not, going to do.
As The Maverick reports in this update, The Fed has a higher authority. It should be no surprise to any of us at this point … they’re ‘just following orders’.
Part of the reason there’s so much focus on earnings, financials and The Fed, is that it’s a whole lot easier to do that, than actually getting down to work and learning price action.
That my friends, as Wyckoff said in his text Studies In Tape Reading, ‘takes many years and many losses’.
So, let’s take a look at what that ‘tape’ is telling us concerning the biotech market.
However as was done with real estate, changing from 2X inverse to 3X inverse, the same has happened with biotech; from BIS, to LABD.
Since the overall bearish assessment has not changed, this morning’s upward move in the markets was used to re-position to a higher (inverse) leverage vehicle … LABD (not advice, not a recommendation).
The hourly charts below show the exit of BIS and the entry of LABD.
Biotech 2X Inverse, BIS
Biotech 3X Inverse, LABD
As this post is being written 12:55 p.m., EST, price action’s at the danger point.
We’re at the extreme; the risk is least but price can go either way.
Summary
Watching that action in real time, it looks like LABD wants to go higher; currently trading at 57.20-ish.
If LABD is higher, that means SPBIO, is moving lower.
Unless price action of biotech (IBB, SPBIO) and the overall markets signal a change of behavior … the bear move is still in play.
If we get a significant break lower, ‘retail’ that’s not positioned properly, will provide the majority of downward thrust energy.
It’s no different than it was in Wyckoff’s time, over a century ago.
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 been a while since we’ve talked about the chief cook and bottle washer in this whole financial collapse scenario.
However, biotech has not been forgotten.
There are two indices (ETFs) being tracked: IBB and SPBIO.
Both entered bear market territory long ago. SPBIO topped out, way back in February 2021; IBB topped later, in August the same year.
Leveraged inverse funds are LABD, and BIS, respectively. LABD is 3X inverse with BIS a 2X inverse.
The Long Term
One thing unique to David Wies, was to look at the long term: Monthly, Quarterly and Yearly charts.
Doing so, puts one in a strategic mindset … not easily swayed by the latest prattle from media sources.
If we look at biotech, IBB, on a quarterly basis we have the following chart.
Biotech IBB, Quarterly
The mark-up of this chart is where it gets interesting.
A terminating wedge that’s been over seven years in the making has just broken to the downside.
Not only that, when we get closer-in (on the weekly), we can see the wedge break has been tested and now today, appears to be reversing to the downside (shown on daily).
Biotech IBB, Weekly
With zoom
The daily shows a Fibonacci retrace to 38%; then today, a downside reversal.
You can see where this is going.
Based on the above analysis a short position in IBB, has been opened via BIS (not advice, not a recommendation).
The trade is BIS-22-01, with an (initial) entry @ 28.5173
Summary
The news on specific biotech companies is already out if one knows where to look.
Stated time and again on this site, we’re just in the beginning stages of the repercussions.
It even looks like they’ve moved on from the initial scam and are cooking up a new one.
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.
That’s it in a nutshell. What happened last time, won’t happen this time.
The market reveals its own secrets; you just have to know where to look.
An entire industry has been (purposely) built to make sure the ‘average investor’ never finds the truth of the markets.
That industry is the financial analysis industry; the one with the P/E ratios, Debt-to-Equity, and so on.
Sure, it was a tongue-in-cheek post to use the fact that Carvana had no P/E (linked here).
I’m not certain if they ever had a P/E; probably not.
However, that financial, i.e., fundamental(s) fact, did not keep the stock from going up over 4,529%, in four years.
It should be noted, the Carvana analysis was done on a Saturday (as has this one). At the very next trading session, CVNA posted lower, started its decline in earnest and never looked back.
Not saying that exact thing (timing it to the day) will happen with our next candidate real estate; as said before, part of Wyckoff analysis (a lot of it, actually) is straight-up intuition.
The good part from a computer manipulated and controlled market perspective, intuition can’t be quantified.
So, that’s your edge.
Let’s move on to ‘last time is not this time’ and see what the real estate market IYR, is telling us.
Weekly Chart, IYR
We’ve got the weekly un-marked chart of IYR, below.
The ‘alternation’ is there.
Here it is, close-up.
The first leg lower had some initial smoothness but quickly became choppy and overlapping.
Not so, now.
We’re essentially heading straight down.
Fundamentals
From a fundamental standpoint, real estate is finished. However, it’s been finished for a long time.
The fundamentals won’t and can’t tell anyone what’s likely to happen at the next trading session … or any other session.
The market itself (shown above) is saying the probabilities are for a continued decline; posting smooth long bars until some meaningful demand is encountered.
As shown on the last post, if the trading channel is in-effect, that (chart) demand is a long way down.
Positioning
Shorting IYR via DRV, has been covered in previous posts (search for DRV-22-02).
The following weekly chart, is marked up with two arrows.
Arrow No. 1
Initial short position via DRV was opened late in the day on April 28th; the day before the market broke significantly lower (not advice, not a recommendation).
Arrow No. 2
As the market headed lower during the week just ended, the size of the DRV position was increased by 36%.
Currently, the gain on the total position is about +22%.
At this juncture, the DRV stop is located well in the green in the unlikely event we get a sharp IYR, upward move in the coming week.
Summary
Under ‘normal’ conditions one could expect some kind of upward bounce in the days ahead.
However, as shown already with big cap leader PLD, the situation’s anything but normal.
Highlighted in earlier posts, biotech is leading the way with SPBIO, currently down – 59.8%, from its highs.
Biotech IBB, with chief cook and (globalist) bottle washer Moderna (MRNA), is down – 36.2%.
As Dan from i-Allegedly has stated time and again, we’re already in a depression.
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 Danger Point® 