For now, we’ll discuss only the technical aspects.
We’ll leave the rest of the truth for mainstream news.
Discussed previously, the sector (SPBIO) was left with our assessment that it may reverse higher into a retrace; combined with an up-thrust/reversal.
That was then.
Biotech, SPBIO, Now:
Daily un-marked chart of SPBIO:
Below, a marked-up chart showing penetration and move off support (Spring Condition).
Included, is the 38% retrace level … location for potential test and reversal:
As with the on-going reversal in gold (GLD) and the miners, GDX, GDXJ, we’ll have to see how this plays out.
Unfortunately, as we head into what used to be the regular flu season, those who received ‘protection’, are going to find out they’re not protected at all.
Stay Tuned
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.
Will Demand Collapse Faster Than Supply Contracts ?
Is There A Biotech Connection ?
The Next Chess Move
Everyone’s good at telling you what the problem is; it’s a financial collapse !!!
No, Duh!
The hard part is, how to position for the unknown at least for those of us in the serfdom.
The so-called elites, the oligarchs know (or think they know) exactly what’s happening.
They move their chess players and we move ours. The goal is to position for (potential) profit with the caveat we all make it out on the other side.
Personal Anecdote (skip to XOP Analysis if not interested):
I have a close family member that’s been a school teacher for about twenty years. He/She is well known in the local town and has a significant number of connections.
Because the children being taught are typically small, ranging from kindergarten to fourth grade, those kids tend to reveal all that’s happening at home.
Their revelations include financial status (or lack of), political leanings as well as abuse that’s happening physically and sexually. It’s the real deal.
As an aside, any potential crimes are fully documented and reported.
The point here is, this contact has revealed that children, family members and extended family members are severely ill or dropping dead after receiving an ‘injection’.
However, the surviving family members are just too stupid (or afraid) to put it together; the injections are causing the deaths.
It’s some kind of mental block and/or mass hypnosis.
It’s wrenching and heartbreaking.
However, at the same time and this is where it gets harsh, for those of us in the faith, we know Biblical scripture tells us the Lord delights in hiding the truth.
One has to diligently seek out truth. It takes work and a prayerful form of neural plasticity; the ability to be mentally flexible.
Truth is not for the lazy, the incompetent, the coward.
Why should immutable truth come to a coward or idiot that does not diligently seek it?
New ‘Variant’:
The rapidly increasing deaths may be passed off by the mainstream media as some kind of new ‘variant’.
That ‘variant’ brings us to the market at hand; oil and oil exploration XOP and possible biotech connection.
XOP Analysis:
As with biotech SPBIO, and its leveraged inverse fund LABD, so too we have Oil & Gas Exploration XOP, and leveraged inverse fund DUG.
The long term un-marked, weekly chart of XOP:
Next, we have price action contacting a multi-year trendline:
Moving closer on the weekly, we have a terminating wedge:
Terminating wedge(s) typically result in price action moving opposite of wedge formation.
In the case above, that would be a reversal to the downside.
This past week’s bar was a reversal. It’s a potential signal the formation is complete and XOP is ready for the downside.
Of course, if XOP is about to head lower, inverse DUG is about to head higher (not advice, not a recommendation).
Daily chart of DUG.
The Biotech (SPBIO) Connection:
The weekly chart of SPBIO, shows momentum on downward thrusts has slowed. The black dashed arrow’s trajectory is becoming more shallow:
If biotech is going to retrace, the solid blue line is a Fibonacci 38%, as well as potential location for an up-thrust (downside reversal).
A new variant (which is likely injection injury) may be used by the media to drive biotech higher to the retrace level.
We’ll have to wait and see if there’s a reduction of the population as we head into the end of the year. It’s a known fact, the injection destroys the immune system … so far, permanently.
That would be a factor in the up-coming flu season.
Remember that?
We used to have a regular flu season … but that all disappeared (re-branded, actually) with our current situation.
Summary:
Nearly all recessions have started with rising oil prices.
However, we’re not in a recession but an all out collapse. The economy is contracting at the fastest rate in U.S. history.
Our current position is demand will collapse faster than supply restriction (not advice, not a recommendation).
Or, we could still have rising oil prices but it won’t be enough to offset the cost of drilling and production; lack of demand may be overwhelming.
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 daily chart above, shows our current location.
Inverting the chart and expanding the price action gives us the following:
Was today an attempt to break the up-trend (down-trend, non-inverted)?
Wyckoff called this type of sharp adverse move ‘threatening action’.
You won’t know if the market’s going to carry out the threat until the next session or subsequent sessions.
Positioning:
My firm’s (core) short position remains unchanged (not advice, not a recommendation).
However, the main account holding of LABD, was reduced by approximately 2.9%, during this session to adjust for margin requirements.
It’s important to note, the after hours session is already trading about 1% higher (for inverse LABD); a typical occurrence when the day’s move was a shakeout.
We’ll see if that action carries over to the regular session tomorrow.
Stay Tuned
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.
Because, it’s the news that’s pushing around those who are easily manipulated, causing set-up(s) to materialize.
Decades ago, Wyckoff said that a speculator, will never be successful in the markets until they can completely ignore the news.
Sure, it’s important to monitor the news … but not for the purpose of speculating or investing.
Keep track of it to identify what they’re trying to accomplish. What’s the desired outcome for their press releases? Who are they trying to influence and maybe ask why?
Wyckoff went on to say (paraphrasing).
‘Put the other traders and speculators to work for you. Stand aside and let them spend their own money to drive prices into a high probability set-up.’
With that in mind, last week’s ‘Shakedown’ update on biotech SPBIO, and inverse fund LABD, said this:
“Because LABD, price action has hit the 21.40 area three times and rebounded, … it could, … could head lower for a penetration and spring set-up.”
Well, today was the penetration and spring set-up 🙂
Inverse Biotech Fund LABD
Hourly Chart
We’ve had the penetration of support … the rebound as well as what looks like a test.
Expectation for LABD, is to move higher from here to the top of the trading range.
Positioning:
My firm remains short SPBIO via LABD (not advice, not a recommendation).
Biotech’s showing weakness in the face of all-time highs in the S&P as well as the Dow.
What’s going to happen to ‘already in a bear market biotech’, when the overall markets reach their final top?
Stay Tuned
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.
About a week ago, the fist bullet item in this list discussed Moderna; that when price action reverses to the down-side (after being a market darling), the lawsuits start.
It’s not the lawsuits themselves, but the discovery process that’s part of the trial … if it goes to trial.
One can guess with some assurance, the last thing Moderna wants is for this baby (any potential lawsuit) to go to discovery and trial.
This could be one of those times, popcorn is justified; watching it all from the sidelines.
Southwest Backs Off:
Looks like greed is more powerful than jabs.
At least we can see the priorities and keep that for future reference.
Now, all-of-a-sudden, it makes no sense to destroy executive stock options with forced collapse of the organization.
Glad we have such genius executives in charge. 🙂
Meanwhile, Back At The Ranch:
While all that’s going on, we still have the financial press talking about earnings and sales and ‘pent up demand’ like any of that is important or actually real.
The only reality at this point in time, is the price.
Biotech SPBIO, Inverse Fund LABD Analysis:
We’re going to start with the un-marked chart of SPBIO:
Next, we’re going to invert that chart; giving a better perspective of what the inverse fund LABD, is tracking:
Repeating a previous observation; price action over the last two months (from late August to now), has calmed down.
Price range has narrowed and movement looks orderly.
Our take on this; bears have assumed control and are preparing (opening positions) for a directional move.
Compared to my firm and probably anyone reading, their capital is unlimited. They’re also patient.
Depending on the level of greed, they’re keeping price action from a major breakout until positioning is complete (not advice, not a recommendation).
Wyckoff termed this phenomenon (a century ago) as the ‘composite operator’, or the ‘central mind’.
This is how markets work. There’s no getting away from it.
By making a transaction, any transaction, one has implicitly entered the ‘arena’ where the gladiators (the professionals) are ready to take all you own.
Moving in a little closer, we already have a trend.
Price action bounced off support on Friday (resistance on the inverted chart) but closed nearly unchanged.
My firm remains short SPBIO via LABD (not advice, not a recommendation).
That is, until the market itself says the bearish analysis is wrong or it’s time to exit.
Stay Tuned
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 looked like biotech inverse fund LABD was going through a standard ‘test’ and then secondary ‘test’ (not as common).
Price action lulled participants to sleep; including this author.
Then , the shakedown.
The purpose is obvious; scare (nearly) everybody half-to-death and have them close out their positions.
It seemed to be working.
Early on, it looked like LABD was going to crater … with SPBIO launching higher accordingly.
Then, a funny thing happened.
LABD Block Trades:
As LABD price action was reaching its session lows, huge amounts of volume started to print on the tape.
Price action was not going down further and yet ‘block trades’ started to show up.
Strictly speaking, a block trade is anything over 10,000 shares.
However, I’m lumping in the 5,000 share trades and up, into the ‘block’.
There were plenty of those including one (buy) block for 13,000 @ 21.66; that’s equivalent to $281,580.
Stand Fast:
It’s days like today, understanding where one is in the market, is critical.
The initial work had been done long ago; that biotech (SPBIO) had printed three down quarters in a row.
The main long-term trend is down until price action says it’s not (not advice, not a recommendation).
LABD Analysis:
The un-marked daily of LABD is below:
Next, we move closer in and mark-up the 30-minute chart:
The large spike in volume is clear.
Volume in that bar’s 30-minutes was the highest since October 1st which was during a huge upward spike in LABD.
Positioning:
If LABD comes back down to the lows, it would indicate weakness and potential exit (not advice, not a recommendation).
At this juncture, the short biotech (SPBIO) via LABD, is being maintained (not advice, not a recommendation).
Last Thing:
Because LABD, price action has hit the 21.40 area three times and rebounded, … it could, … could head lower for a penetration and spring set-up.
Everybody and their dog (that’s left) has now put their stops at that level.
Stay Tuned
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, is in the process of testing yesterday’s action.
The hourly chart of the inverse fund LABD, has price action in the process of competing a secondary test.
The take-away is unchanged.
Biotech (SPBIO) looks like it’s preparing for a directional move (not advice, not a recommendation).
Price action thus far (since the support penetration), is consistent with that potential.
Stay Tuned
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.
Art & Science: Interpreting price action requires both.
Since the September 2nd, high in biotech SPBIO and low for inverse LABD, the character of the market has changed.
Price action has become tight and orderly.
Typically, when that happens, someone (some entity) is gaining control. They are preparing the market for a directional move.
That’s the science part; the observation part.
Art is ephemeral. You don’t know if it matters to the subject at hand or not.
You won’t know until it becomes obvious.
In the markets, when it’s obvious, it’s too late.
News Of Note:
Within the past few days, there have been at least two news stories of note: Here and here.
It’s not really the stories themselves but what they represent.
Go to time stamp 8:10, at this link. That’s what it’s about.
The so-called controlling entities may be in the early stages of consuming each other.
What does that have to do the the markets and specifically biotech? Those thinking they were safe and getting fake ‘protection’ could be realizing, maybe they didn’t.
Maybe it was the real thing.
Mid Session:
SPBIO (Inverse, LABD):
The market’s had a change in character.
Whether or not the above links were the reason, just part of the reason or not at all, won’t be known until long after the market opportunity has passed.
We’ll start with the un-marked daily chart of leveraged inverse fund LABD:
Tight price action identified:
Now, it gets interesting.
We’ll zoom in on part of the tight area using the hourly chart:
LABD has oscillated around support and then penetrated that support as shown.
Price action rose dramatically from there. We’ll label it as a sign of demand (Wyckoff term).
Next, we have the testing action. David Weis used to call it “The Gut Check”.
Tests can either pass or fail. That currently puts LABD at the danger point.
Positioning:
My firm’s position remains unchanged: Short biotech via LABD (not advice, not a recommendation).
Summary:
As this post is being created, LABD is moving up off the test lows. So far, overall price action has been well behaved.
Thus far, there has been no major (news generating) price break.
That type of controlled movement allows large positions to be built carefully and quietly (not advice not a recommendation).
Stay Tuned
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.
Maybe, it turns out that some people don’t want to be in the spotlight after all.
Click on the link.
See if your jaw doesn’t drop with how casually the interview discusses things we (the serfs) should not know.
That interview (at least the ‘tweet’) is from February, this year. So, maybe this is old news to some.
Even so, it’s just one of the many bricks in the wall for biotech.
With that said, let’s take a look at our chief cook and bottle washer: SPBIO
SPBIO (and inverse, LABD) Analysis:
The last update said that we expected SPBIO, to decline and LABD, to rise from current levels.
That’s exactly what happened.
As usual, we’ll start with the unmarked chart:
Obviously, biotech’s not moving higher.
At Friday’s close, it’s down – 28.4%, from the all time highs posted February, this year.
Market Insight:
The ‘tweet’ in the link above, is dated February 9th, 2021.
The all time high for biotech SPBIO, was the very same day: February 9th, 2021.
Remember, there are no coincidences.
Let’s mark up the daily chart; showing that Friday was an outside-down (key reversal) day.
The right-most area of the chart has been zoomed-in.
Higher high, lower low and lower close:
The next chart is where it gets interesting.
We’ve included a Fibonacci projection; going from all time highs to lows in May and then counter-trend high on June 28th:
It’s clear the 23.6%, projection level has been an axis line.
SPBIO, price action has oscillated about this area for months.
With Thursday’s ‘a-b-c’ corrective move and Friday’s outside-down reversal, that axis oscillation may be complete.
If SPBIO is to head lower from this point (which is expected), we’ll watch to see if price action ‘respects’ the Fibonacci projections; that is, will price action head lower to 38%, then 50%, and on?
Positioning:
Friday was a good day to be short via LABD (not advice, not a recommendation).
Biotech, is nowhere near all time highs. The sector is essentially running neck-and-neck with GDX, to the downside.
The expectation’s for SPBIO to head lower in the coming week.
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 is typical for this site, we’ll let the bulls duke it out with the bears. We’ll wait and see if we’re at a reversal point (trend-line) or if we’re headed to up-thrust condition.
If GLD breaks the trend-line, getting back to the 170 – 171, level (up-thrust), imagine the hysteria. 🙂
Lastly, Biotech (LABD):
First: Did we exit LABD?
Answer is No (not advice, not a recommendation)
Second: Why?
The price action thrusts below support that have been reported in prior posts were indeed spring set-ups.
However, it’s obvious now, they were not THE set-up.
The chart shows LABD has met an ‘a-b-c’ measured move target.
The idealized form of an ‘a-b-c’ corrective move, is shown with the blue lines and notations:
At this juncture, wave ‘a’ net distance traveled, is equal to ‘c’ and wave ‘b’ net distance, is about 50% the length of wave ‘a’.
These measurements are typical for ‘a-b-c’.
Positioning:
My firm’s main position is still showing a good profit and we’re going to maintain short biotech via LABD (not advice, not a recommendation).
However, as with GDX being at the danger point before its rally, so too is biotech at the danger point (prior to a potential decline).
Expectations are for LABD to retrace higher from current 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.
The Danger Point® 