Category Archives: $SPSIBI

At The Edge … Biotech

March 3, 2024 By in $SPSIBI, Biotech, IBB, LABD, SOXX, SPBIO, The Maverick of Wall Street, Wyckoff, XBI 2 Comments

Amidst The Confusion, The Biotech Set-Up

Let’s remind ourselves with a paraphrased quote, long ago:

‘Until you can completely ignore the financial press and focus strictly on price action, you will never be successful in the markets.’

Richard D. Wyckoff, circa 1934

New Highs … Except

It’s new highs for the AI insanity; all the while, CEOs and other insiders are cashing out, as reported by The Maverick, and J. Bravo.

Notably absent from this drunken cyber-bash are biotech IBB, and XBI.

Fibonacci Retrace Compete?

Both indexes (ETFs) posted a Fibonacci retrace (from 2021 highs), doing it simultaneously; IBB at 50% and XBI at 38%.

Potential reversal of XBI, link here.

We have below, even more (technical) weight for XBI pivot from up-to-down (not advice, not a recommendation).

Biotech XBI, 3-Day

Attempted breakout above resistance (magenta line) puts XBI, at The Danger Point®

Price action’s hovering above resistance while at the same time posting climactic volume.

Note that it’s just touching the underside of the 38.2% retrace level (blue line).

The last time we had a similar volume climax was the pivot point from down-to-up, in early May of 2022.

Does that mean the current volume spike signals a (potential) reversal from up-to-down?

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 (XBI), ‘Changing Hands’ ?

February 28, 2024 By in $SPSIBI, Biotech, LABD, SPBIO, XBI 1 Comment

Historic Volume, Short-Side

Yesterday’s down-draft in biotech leveraged inverse LABD, had the largest volume in the ETF’s history.

It’s possible, we just witnessed a ‘changing of hands’; from weak to strong.

Conversely, the biotech index XBI, may have reached or be near a long-term reversal (not advice, not a recommendation).

XBI, fundamentals as usual, are horrific; the (current) top-ten components, comprising over 18% of this index, are at mind-numbing ‘valuations’.

Of those ten, none have a yield and nine have no P/E at all; the one that does (KRYS), has a P/E, close to 1,900 (BigCharts).

Which brings us to the chart.

Biotech 3X Leveraged Inverse LABD, Daily

Unprecedented volume; potential ‘changing of hands’.

As always, anything can happen.

As of this post (11:30 a.m., EST) the inverse LABD is only slightly off its lows (XBI, off its highs).

If there’s to be a sustainable reversal, it could take some time to materialize (not advice, not a recommendation).

Either way, LABD volume is telling us to watch closely.

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 “Bottled Air”

January 31, 2024 By in $SPSIBI, Biotech, DHI, Federal Reserve, LABD, SPBIO, Uneducated Economist, XBI

Nothing (or not much) Holding It Up

We’re still a few hours away from the Fed announcement and it’s already high anxiety in the market.

D.R., Horton (DHI) has retraced about 38% of its move and is testing the underside of breakdown resistance.

Over on the ‘Little, or no P/E’ side of the market, biotech XBI is coiling, building (downside) potential in its own on-going reversal.

Biotech XBI, Daily

The last update on biotech XBI (link here), said to watch for a false breakout.

The chart shows the result. The breakout did not last; we’re congesting just below resistance (blue line).

The latest post from Uneducated Economist talks about the potential for lower rates, i.e., probabilities are low.

Incorporating that possibility into the above analysis, it suggests the XBI move from last November to the end of December, is essentially built on “bottled air” (not advice, not a recommendation).

The retail side of the market appears to be positioned long, expecting lower rates.

What happens if that does not happen?

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.

Biotech Squeeze … Terminal ?

January 10, 2024 By in $SPSIBI, Biotech, Federal Reserve, LABD, SPBIO, XBI 1 Comment

At The Extreme

Has the biotech squeeze been stretched to its limits?

The daily chart of XBI, shows we’re at an extreme, MACD is flat, crossing below the signal line, second time in the past five trading days, and price action is at well-established resistance.

Still Waiting

What has not happened, is printing a new daily low.

As of this post (11:30 a.m., EST), XBI is trading just above yesterday’s low of 92.00.

Biotech XBI, Daily

At 3:15 p.m., EST, New York Fed president John Williams is due to speak.

It may or may not be a catalyst for what happens next.

However, it still remains to be seen if there are any rate cuts on the horizon. So far, none.

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

Blow-Up or Breakout … Biotech

December 27, 2023 By in $SPSIBI, Biotech, LABD, SPBIO, XBI

The XBI, P&F Count

Biotech XBI, is now at the point where any substantial move upward, results in a ‘change of character’, the market would then be sub-dividing higher.

The Point & Figure (P&F) chart shows and interesting characteristic; each prior correction higher, reached a maximum that’s just one box (approx. 2-pts) below the prior peak.

That’s where we are now.

Biotech XBI, P&F

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

Think Like A ‘Criminal’

December 22, 2023 By in $SPSIBI, Biotech, LABD, Neil McCoy-Ward, SPBIO, Wyckoff, XBI 1 Comment

How The Game Is Played

Watch the video linked here, to see how veteran trader Richie Naso describes trading false breakouts and breakdowns, showing how to position in the markets.

What he’s in effect describing is a Wyckoff Up-Thrust (false breakout) and a Wyckoff Spring (false breakdown).

Then he adds, you have to ‘think like a criminal’ to really understand who is doing what, to whom.

Note: No mention of the Fed, corporate earnings or any other ‘funny-mentals’ as Ed Seykota likes to call them.

Inflation Takes A Holiday

Not for long though.

Neil McCoy-Ward at this link, describes how inflation is coming back (time stamp 21:00).

The Imaginary Friend

We’ve had the markets launch on ‘Imaginary Rate Cuts’ as Uneducated Economist calls them, while in the background, more inflation (i.e., supply destruction) is in the works.

Which brings us to biotech and specifically, SPBIO, $SPSIBI, and XBI.

Biotech XBI, Daily

We may have just had the largest market fake-out (up-move) in history; time will tell.

With all of that manipulation, price action (for biotech, at least) has come back to near prior peaks … but not above.

As this post is being created (3:05 p.m., EST), XBI is starting to back off its intra-day highs.

Internalize It

Referring back to Undedicated Economist, the comment sections of his videos have the usual ‘So, what do I do?’.

His response is a good one. 

He says to ‘internalize’ the message he’s presenting. For example, in this case, it’s possibly the biggest market fake-out in history. Then he says you will ‘intuitively’ know what to do (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, XBI Forecast

December 17, 2023 By in $SPSIBI, Biotech, LABD, SPBIO, XBI

Just Two of Many Possible Scenarios

Looking at where biotech (XBI) closed this past Friday, two potential outcomes are possible for the week(s) ahead.

Based on typical price action, when an extended move encounters resistance (shown as the blue line), we have the following (not advice, not a recommendation).

Biotech XBI, Daily Close Forecast

The analysis shows XBI, is currently at resistance.

Typical market behavior is to come back for a test of the support level shown as magenta dashed lines.

What happens after that in the above case, is either continued upside or a potential failure and breakdown.

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

The Usual Suspects

December 16, 2023 By in $SPSIBI, AMT, Biotech, BOIL, Bonds, CVNA, DRI, Federal Reserve, Food Supply, Genesis 41, GLD, Gold & Silver, Gold Miners, IYR, LABD, Natural Gas, Real Estate, Semiconductors, SLV, SOXS, SOXX, SPBIO, TBT, TLT, Uneducated Economist, UNG, Usual Suspects, WEAT, Wyckoff, XBI 1 Comment

Everything Happening At Once?

Not in any particular order; not advice and not a recommendation.

No 1. There (still) is no Fed Pivot. Seriously, have rates really, actually been lowered? Everyone has a huge case of ‘normalcy bias’. i.e., what the Fed did last time will happen this time.

The 40-year bond bull market from the 80’s, ended in 2020. We’re in a different paradigm now.

No. 2 Natual Gas UNG, is reversing. We’ll see whether or not there’s going to be a supply disruption.

No. 3 The semiconductors SOXX, now have a monthly bearish MACD divergence; daily and the weekly indicators posting even to prior tops (as of Friday’s close). 

No. 4 Components of biotech index XBI, are being shuffled around faster than deck chairs on the Titanic … or, the Olympic 🙂

Seems like a mad dash to add/remove, increase, reduce equities to prop things up. We’ll see how that turns out. Currently, XBI is right at resistance level, 86.50 – 87.0

Here’s just one example from an index, riddled with equities that have no P/E.

No. 5 Carvana is very close to posting new highs and potentially, running the stops.

No. 6 Has Darden Restaurants, topped out? 

The consumer is certainly tapped-out and no-one ‘needs’ a restaurant.

No. 7 Wheat is reversing; It is and has always been about the food supply.

No. 8 Gold, GLD, is currently not going higher (look at the divergences); silver (SLV) is in a major non-confirmation, down nearly – 55%, from all-time highs.

During the 1980s inflation, precious metals moved (upward) together.

Silver looks like it’s responding to the destruction/collapse of (economic) demand.

No. 9 American Tower (AMT), number two in the IYR index, posts a clear false breakout and reversal. 

If rates really are going (materially) lower, interest rate sensitive real estate should continue going higher, right?

No. 10 Which brings us to the bond market, TLT. 

Price action broke above established resistance, currently hovering above that level. 

It’s at The Danger Point®

We can see the set-up, a price action pattern repeated time and again, between the lower and upper blue lines, called a ‘Spring-to-Up-Thrust.

While the media laughs at the bears, let’s just see how this all works out.

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 Bellwether … CRSP

December 9, 2023 By in $SPSIBI, Biotech, CRSP, IMGN, LABD, LABD-23-16, MRTX, Positions, SOXS-23-10, SPBIO, Spring-to-Up-Thrust, Wyckoff, XBI

Repeating Trend, Cashing-Out

Once again, there’s a repeating trend of (potential) reversal.

This time, it’s biotech, specifically CRISPR Therapeutics, CRSP.

Before we get into it, a point of housekeeping; SOXS-23-10, has been closed, exited at SOXS 8.43; loss is manageable at -2.9% (not advice, not a recommendation).

CRSP, Market Proxy

CRSP, is being used as the proxy for biotech as it’s number five in market cap at this link.

However, the first two IMGN, and MRTX, are buyout (acquisition) candidates, eventually to be removed, making CRSP, number three with no additions.

Set-Ups That Repeat

Market behaviors repeat. Set-Ups repeat. The title above, was from a post over two years ago, link here.

Taking a look at CRSP, we have the same pattern.

CRISPR Therapeutics CRSP, Weekly

The volume spike for the week, is the largest ever; ergo, someone is selling.

From a CRSP, price action catalyst and news standpoint, the link is here.

This coming Wednesday, is the Fed interest rate announcement, link here.

Wyckoff said, ‘somebody always knows something and that “something”, shows up on the tape’.

It’s likely those that know, are cashing out ahead of the meeting (not advice, not a recommendation).

Positioning

If it’s presented on this site, a position has already been established or it’s in preparation for entry.

So, it is with biotech.

A biotech short was opened this past Friday via LABD with two entries: LABD 13.93 and LABD 14.17.

Trade is labeled, LABD-23-16

Hard Stop @ LABD 13.82, for a combined (both entries) risk of 0.23-pts/share (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

What To Expect … For Biotech

November 25, 2023 By in $SPSIBI, Biotech, LABD, LABD-23-14, Positions, SPBIO, Wyckoff, XBI

When The ‘Thrust’ Shortens

The balls clicking away on a Newton’s Cradle, will eventually come to rest; so, it is with markets and reversals.

Price action moving in one direction will eventually stop, then reverse.

The ‘how’ and ‘when’ of that action, is what we want to know.

Years ago, Wyckoff observed, reversals were likely when price action began to have a ‘shortening of the thrust’.

We can see that in the chart of inverse biotech fund LABD.

Biotech 3X Leveraged Inverse Fund LABD, Hourly

Friday’s action posted a new LABD low of 0.01-pts, corresponding to new XBI high, of 0.02-pts.

From a shorter thrust perspective, we’re looking for net downside progress, not overall distance.

Looking at the chart, it’s reasonable to expect biotech SPBIO, $SPSIBI, XBI to decline in the coming sessions with leveraged inverse fund LABD, rising accordingly (not advice, not a recommendation).

Positioning

Those monitoring this series on trading the sector, have been privy to the actions taken by one speculator to position (and re-position) short via LABD.

With the understanding, anything can happen, I have an open short via LABD, noted as LABD-23-14.

Hard Stop is last Friday’s low of LABD 17.61, with Soft Stop, discretionary, near LABD 18.00 – 18.09 (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