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.
Unfortunately, the (mad scientist) graphic at left, is not too far removed from what’s really going on in biotech.
While the S&P, Nasdaq Qs, Gold Miners, Semiconductors, Financials, The HOOD, ORCL, and others, continue to make all-time highs, conspicuously absent is biotech, XBI and IBB.
Now, it appears that quietly, in the background, XBI is reversing to the downside.
Biotech XBI, Daily Close
The up-thrust is there, but is a weak penetration of resistance.
Even so, on the ‘test’, volume contracted by -49.24%, when compared to volume on the upside penetration.
Until proven otherwise, this set-up appears to (currently) be the best short opportunity.
With that said, all other short positions have been closed to focus on biotech.
Leveraged inverse fund LABD is being used at this juncture: Trade LABD-25-10, with stop at the session low (not advice, not a reocmmendiaton).
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.
We’re letting the market decide what support/resistance, trendlines, and Fibonacci levels are significant.
We’ll even make an attempt to pick the timeframe(s) that best describes current action.
There’s a lot going on in a market sense, as well as ‘behind the scenes’ with revelations like this, and this, and this.
With that said, we’re looking at the 3-Day chart and Fibonacci levels.
Biotech XBI, 3-Day
The 3-Day is being used; it best shows current trending action (planned for next update).
The XBI, has near perfect (Fibonacci) symmetry.
Price action has made its way back to the 23.6%, level, and is hesitating.
Watching the action in real time, XBI gives the sense it does not know quite what to do … is it in a pause, gathering steam to move higher, or was the massive squeeze, on Wednesday, the 9th, all there was?
Positioning
As stated in the earlier update, XBI action on the 15th, put it at The Danger Point®; the location where risk was least for a short position (not advice, not a recommendation).
It’s been slow going since then (ratcheting lower) but the one thing XBI, is not doing … is moving significantly higher.
More trade discussion, stop levels, link here (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.
Moderna, MRNA, is down -88%, from its all-time highs.
Having worked the markets for nearly forty-years, it (typically) goes as follows …
When a stock declines 80% or more, in short order (12-36 months or so), those with absolutely no analysis skills or discipline, who bought-in because everyone else is doing it (making a supposed fortune), have now lost their shirts.
So, they do what they know best, blame somebody else. Let the lawsuits begin.
The whole thing is so much like High School.
Class action is nothing new. What is new this time around, or what could be new, is the ‘discovery’ process.
One has to wonder if (or when) the lawyers are going to come across this piece of ‘discovery’.
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.
Let’s get back to our fantasy world; the highly simplistic excuse that gold’s responding to ‘massive inflation’ and ‘money printing’.
Gold GLD, Monthly
One wedge, with its target already reached.
There’s another potential wedge (not advice, not a recommendation).
Since futures are trading about $200/oz. higher than GLD (at 1/10 oz. pricing), the second measured move if reached, corresponds to about $3,300/oz. (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.
As usual, we have the rabid gold and silver bulls, breathless; ‘This is it!’, ‘This is the big one!’, ‘Dollar collapse, imminent!’
All the while, nobody’s reporting the fact, that ever since ‘The Speck’ was introduced in 2019, and of course, Speck ‘protection‘, gold production has dropped to 2014 levels, and has not recovered (source, Statista).
Is it as simple as ‘supply and demand’? Is the ‘inflation’ narrative, just another ruse?
Even as gold and silver are rising (for now), the mining sector’s GDX, GDXJ, are far below their all-time highs.
As if to put icing on the cake, Newmont, appears to have reversed (not advice, not a recommendation).
Newmont Mining NEM, Daily (inverted)
Similar to recent biotech analysis, we’re inverting the chart to show the potential.
Note: This ‘inversion’ technique is a psychological exercise covered in one of Dr. Elder’s books (here and here).
It’s a basic fundamental for un-biased analysis.
Back in the day, while publishing on SeekingAlpha (a whole story in itself), users of that site would complain about charts being ‘upside down’. 🙂
Moving on, we have the following:
There’s a lot going on in this chart.
Price action has recoiled off the support (resistance non-inverted) and is now at a point where it may attempt to retrace for a test.
MACD has become successively bullish; now has a crossover signal.
As shown in prior updates here and here, the support level’s in the vicinity of the 23.6%, retrace.
That indicates bullishness on the chart above or weakness on non-inverted (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.
Gold’s near all-time highs, silver’s rebounded, testing recent highs; yet Newmont’s at a paltry 23.6%, retrace.
So, you tell me. What’s likely to happen to Newmont, if gold or silver head back lower, even just a little bit?
That dude in the picture, needs to keep on diggin’. 🙂
Wyckoff, In-The-Know
Years ago, Wyckoff told us not to pay any attention to the financial press, the local circus.
However, that does not mean he didn’t know what was going on. He did, and sometimes down to the penny.
We don’t know for sure what’s (really) happening with Newmont and the mining sector but among other things, it might have something to do with this, this, and this.
Even so, price action’s the truth; let’s look at our chief cook and bottle washer’s progress since the last update.
Newmont Mining NEM, Weekly
The chart has expanded the Force Index (middle panel) for better clarity.
Going back to the last update, it had this to say:
“A reasonable expectation is NEM, retraces, testing the wide bar and volume before continuing to the downside or moving back higher to a breakout.”
Price action has done exactly that. It came down to test the wide (4/25/24) bar and then back up to resistance, where we are now.
The only thing missing at this point, is the breakout or reversal (not advice, not a recommendation).
Show Me, The Money
Anyone with two Latte’s rubbing together, knows the economy may (already) be in full-blown collapse.
Anecdotal (and factual) evidence of that can be found here, here and here.
Adding, Nemont itself is not doing well as evidenced by this recent (February) article about dividend cuts, asset sales.
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.
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.
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 little nerve-wracking over the past two sessions being short biotech; was it an upward correction, or a full-blown reversal?
No one really knows, until it’s over.
Well, as of today’s new daily low in index SPBIO, it looks like what is now seen as a correction, may be complete (not advice, not a recommendation).
Bad, And More Bad
On the fundamental side, The List keeps building with links like this, this and this.
However, keep in mind, it may be something as simple as rising interest rates that’s ultimately going to collapse biotech and the rest of the markets (not advice, not a recommendation).
Moving on and looking at the chart of SPBIO, there’s a trend confirmation and potential trading channel.
Biotech SPBIO, Daily
The left side line is the trend … the right-side line is what’s called the ‘reverse trendline’ and possibly defines the trading channel.
As of this post (12:30 p.m., EST) the SPBIO, is doing all it can to reverse higher, against what may be the over-riding (down) trend.
So far, the daily high of SPBIO 5764.73, remains intact.
Positioning
As a result of today’s new SPBIO low, the stop has been moved on the position in the inverse fund LABD, from LABD 18.22, to LABD 19.18 (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.
The Danger Point® 