Category Archives: $SPSIBI

The Case For ‘Swift’ Downside: XBI

June 6, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-12, Monty Python, Prechter, SPBIO, XBI 3 Comments

Rule Of Alternation

The last update presented a multi-timeframe analysis; medium to long-term (potential) bearish set-up in biotech, XBI.

This morning’s action appears to be confirming the up-thrust potential.

Now, we’ll get into why this move may happen quickly.

Multiple Timeframes

If the premise is correct, that we’ve gone through a month-long test of the weekly (timeframe) up-thrust, testing may now be complete.

Naturally, the power behind a weekly move, has more substantial effect than daily.

Next, the topic at hand; Prechter’s ‘Rule of alternation’.

Biotech XBI, Daily

The first chart shows detail on the last up-thrust.

Price action penetrated resistance, then posted five-days of congestion before breaking lower.

We’re labeling that congestion action as ‘complex’.

Next, we have the current situation. An apparent up-thrust in its initial stages.

If what we have now, is indeed an up-thrust, taking all the prior considerations into account, it’s reasonable to expect the subsequent move will be less complex, having different form, and move more quickly (not advice, not a recommendation).

In any case, we have a ‘hard stop’ for a short position, at the session high (not advice, not a recommendation).

Our Quest, Is At An End

Like something out of Monty Python, the entire analysis of downside potential feels like the quest is at an end.

However, just like the video snippet in the link above, what looks to be a dramatic conclusion to weeks if not months of work, could be completely derailed by a bunch of ‘French’ guys hanging out in a British castle 🙂

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279

After The Close

June 5, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-12, SPBIO, Wyckoff, XBI 2 Comments

Biotech In Review

In this update, we’ll review the entire biotech (bearish) XBI, set-up.

First: Going way-back to March 10th, this year was this post.

There was potential for a long-term downside reversal in biotech, XBI.

Subsequent price action proved the analysis to be correct; biotech declined significantly, down over 18%, before recovering.

Second: The weekly timeframe Up-Thrust was properly identified as (in Wyckoff terms) there was ‘Sign-of-Supply’, with price action in decline.

Third: If, and it’s a big if, we’re in a long-term reversal, we’ve had the initial Sign-of-Supply that’s been followed by an apparent test.

That’s where we are now, as shown in the weekly chart.

Biotech XBI Weekly (inverted)

The chart is inverted so Sign-of-Supply becomes Sign-of-Demand.

Note the MACD is very close to a crossover.

Doing so, would put a serious dent in the ‘Spring, Demand and Test’ assessment.

Now, on to the Daily

Fourth: Buried within the weekly action, ‘Demand and Test’ (inverted chart) is the Daily, with its own set-up.

Biotech XBI, Daily (inverted).

With the weekly in a potential ‘test’, the daily has formed a spring set-up.

Potential for a bullish divergence, noted in the prior update.

Now, it’s here.

Obviously, the expectation is for price action to rise on the inverted chart(s); Downside for the actual XBI.

Fifth: Depending on what happens next, if we do get a reversal to the upside, inverted charts, there’s a potential for that action to be swift.

If and when that happens, we’ll cover it in another update.

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279

Biotech … Hits Target

June 5, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-12, SOXX, SPBIO, Spring-to-Up-Thrust, XBI

Meanwhile, On The Other Side …

While the SOXX fights it out between bulls and bears, biotech XBI, has quietly penetrated resistance … and stopped.

Price action’s currently hovering above resistance in a narrow range.

The prior update showed the likely outcome for a spring-to-up-thrust target.

It’s arguable that we’re here now (not advice, not a recommendation).

Biotech XBI Daily

The upside penetration is not all that convincing.

That could be good or bad depending on one’s viewpoint.

Is there no more energy left or is the XBI just hesitating before moving higher?

If we pull back to the longer, weekly timeframe and recall, all of this action may be just a ‘test’ of a larger (timeframe) up-thrust.

That marginal energy would correlate with limited upside during a potential breakout (not advice, not a recommendation).

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279

Biotech … Nears Set-Up Target

June 4, 2024 By in $SPSIBI, Biotech, LABD, SPBIO, Spring-to-Up-Thrust, XBI 3 Comments

The Pattern (About) To Repeat

Of course, there’s no guarantee, biotech is going to repeat a repeating pattern; ‘spring-to-up-thrust’, but it looks probable.

We’ll start first, with the unmarked chart of biotech XBI.

Looking at the past month or so of trading activity, the eye should be drawn immediately to the potential.

Biotech XBI, Daily

If it’s a little vague, the second chart shows the detail.

Now, for the mark-up

Not included on the charts, is MACD.

If price action gets to the up-thrust (target) area and stalls, daily MACD could post a bearish divergence.

Let’s not forget, this congestion action continues to build a downside count when considering Point & Figure.

Stay Tuned

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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®, trade mark: No. 6,505,279

The Bearish Bet on Biotech

May 23, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-11, Prechter, SPBIO, The Maverick of Wall Street, The Speck, XBI

‘Monkey See … ‘

The next ‘show’ is about to begin; let’s take our seats, get the popcorn ready.

Setting the stage, we have this, just out.

Looks like there’s another ‘Speck’ on the horizon. You know, ‘The Thing’ as The Maverick of Wall Street, likes to call it.

But we can’t have this crisis go to waste. How about a press release, letting everyone know, we’re about to make (yet) another bundle of cash.

Is that really going to happen, this time around?

To find the answer or the probability, we’ll go to the chart of biotech XBI, and have it tell us the likely outcome.

Biotech XBI, Daily (inverted)

As we’ve being doing previously, here, and here, we’re using the daily but inverting it to show bearish (LABD) potential.

As a reminder, this update, indicated a possible stop for a short position (not advice, not a recommendation).

That location is labeled ‘Stop No. 1‘, on the chart.

Yesterday’s action presented the opportunity to move the stop; it’s labeled as ‘Stop No. 2‘.

Rule of Alternation

This ‘rule’, coming from Robert Prechter Jr., says:

‘What happened last time, is not likely to happen this time.’

That guides us to expect something different.

From the perspective of the analysis above, that ‘different’ is pointing probabilities to the downside (not advice, not a recommendation).

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279

Biotech ‘Set-Up’ … Sets-Up

May 16, 2024 By in $SPSIBI, Biotech, SPBIO, XBI 1 Comment

New Daily Low

Biotech, a set-up whose time has come?

Can we go further to say, a ‘set-up’ within a ‘set-up’?

With the caveat that absolutely anything can happen, let’s look at what may be a competed test on the weekly time frame while at the same time, a completed up-thrust set-up on the daily time frame.

First, the weekly using the inverted chart.

Biotech XBI, Weekly (inverted)

As a reference, here’s the link to the prior weekly chart, discussing the spring ‘test’ set-up.

Moving on to the daily we have the following. Note, the daily has been inverted as well.

Biotech XBI, Daily (inverted)

From an MACD indicator standpoint, we’re still in bearish territory (bullish on the regular chart).

The entire trade set-up could evaporate.

So, there’s no doubt, we’re at The Danger Point®

From yesterday’s update the market itself has shown its stop level for a short position (not advice, not a recommendation).

Looking at the two charts, it’s possible to see a test of a spring on the larger weekly time frame which may itself have created a spring set-up on the daily timeframe: corresponding to up-thrust test, and up-thrust for non-inverted XBI.

Consider that this is all happening while the broader markets are making new all-time highs.

Stay Tuned

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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®, trade mark: No. 6,505,279


Biotech … ‘Fills The Gap’

May 15, 2024 By in $SPSIBI, Biotech, LABD, SPBIO, XBI 2 Comments

End Of The ‘Test’?

Was this morning’s launch higher in biotech a ‘gut-check’ of the up-thrust (set-up), or just filling the gap left from the April 2nd, move lower?

The Fibonacci 55-Day, count remains intact as it moves from the closing high of February 27th, to the ‘print’ high of the 28th.

As of this post (10:40 a.m., EST), XBI has already retraced back to the top of yesterday’s trading range.

As we look at the chart, it’s important to note today’s early session high was 93.85, the exact closing price of the ‘gap’ created on April 1st, and 2nd.

Biotech XBI, Daily

If this action really is just a test of the larger scale up-thrust (described here), one gets the sense a significant move lower may be at hand (not advice, not a recommendation).

We’re just over an hour into the session and XBI has posted a clean reversal bar for the first hour.

In the event there’s no significant move lower, and the set-up fails, today’s high represents a good stop level for a short position (not advice, not a recommendation).

Stay Tuned

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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®, trade mark: No. 6,505,279

Biotech … ‘A Sneaky Suspicion’

May 14, 2024 By in $SPSIBI, Biotech, LABD, SPBIO, XBI 1 Comment

On Target, On Time

The last update on biotech XBI, ended with this:

“However, it’s just a sneaky suspicion, XBI may try to inch itself past the daily highs of April 9th, and April 11th (not advice, not a recommendation).”

Fast forward to now and here we are.

We’re at Fibonacci 55-Days, from the closing high on February 27th; today’s price action opened the session by penetrating highs of April 9th and April 11th.

Doing so, puts XBI in up-thrust (potential reversal) position.

Biotech XBI, Daily

We can say, XBI is at The Danger Point®

As this post is being created (10:34 a.m., EST) price action appears to be eroding from the early session push higher.

The typical market characteristic for XBI, is to retest in the second hour or so of trading; in this case that would mean a move back to the highs.

If that does not happen, it adds weight to the potential reversal scenario (not advice, not a recommendation).

Stay Tuned

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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®, trade mark: No. 6,505,279

Biotech … Nears 50% Retrace

May 6, 2024 By in $SPSIBI, Biotech, LABD, SPBIO, Wyckoff, XBI 3 Comments

Will That Be The Top?

When we last left biotech XBI, a push higher into a potential stop-zone was expected, link here.

‘The tape is always right’ as they say, and price action, somewhat unexpectedly, blew past those stop levels.

At this point (12:27 p.m., EST) we’re nearing the 50% retrace on the XBI. That level is somewhere around XBI, 92.28-ish. Currently XBI is trading at 90.12, about 2-points away.

We’ll do a little experiment with the weekly chart by inverting it to show the longer-term view.

Biotech XBI, Weekly (inverted)

Note the MACD lines are still crossed to the upside.

One way to look at the action is that we’re in a test of the spring set-up (up-thrust, non-inverted).

The retrace to the 50% level may have already happened with last Friday’s action.

However, it’s just a sneaky suspicion, XBI may try to inch itself past the daily highs of April 9th, and April 11th (not advice, not a recommendation).

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279

If, I Was Short Biotech …

April 30, 2024 By in $SPSIBI, Biotech, LABD, Richie Naso, SPBIO, XBI 1 Comment

Where, Would I Put My Stops?

As former floor trader Richie Naso says, ‘You have to think like a criminal’ (time stamp 10:50).

Using his example, a market-maker executes orders ‘to create liquidity’; where on the chart of biotech XBI (below), would that bundle of ‘order’ liquidity exist?

Biotech XBI, Daily

The purple oval shows where there’s a potential of congregated ‘stops’.

Also note, the MACD cross.

This trigger signal is on the Daily MACD, only as the weekly shows longer term momentum continues lower (not advice, not a recommendation).

At this juncture, XBI has broken out of previous trend channels and so, we have a new construct.

Positioning

Presently, I have no open positions in biotech (not advice, not a recommendation).

Back in the day, I would likely be holding short, placing my stops exactly at the location of the purple oval.

Let’s see if the market searches out my old stop location that if hit, would have taken me out of position (via LABD) right in time for a potential reversal to the downside. 🙂

Reminder, Fed interest rate announcement tomorrow.

Stay Tuned

Charts by StockCharts

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®, trade mark: No. 6,505,279