Biotech SPBIO, opened lower and has continued lower throughout the day (with 30-minutes left).
Yesterday, this post showed a potential trading channel. Today’s lower action (higher with inverse LABD) appears to confirm the channel.
We need to be mindful though; events are unfolding rapidly at this point.
We’re just minutes away from market closure and going into the weekend … does anyone really want to be positioned long? (not advice, not a recommendation).
With that in mind, the daily chart of biotech leveraged inverse fund LABD, is shown below with a compressed scale.
The first chart has yesterday’s trading channel.
The second chart is the one of concern.
Biotech SPBIO, Leveraged Inverse LABD, Daily Close
Yesterday’s trading channel
New, potentially more aggressive channel
We’ll get more information on Monday to see if this new channel is in-effect.
There are still about 30-minutes left in the session and anything can happen.
Either way, we’ve already seen the markets ‘lock-up’ with bad quotes, brokerage outages and ‘disappearing‘ bank accounts.
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 February 3rd, also represented as; 2/3/23, it all changed.
That was the day the ‘toxic train‘ derailed in East Palestine, Ohio.
It was also the day biotech sector SPBIO, reversed to the downside.
The biotech reversal was identified to the day with the following quote:
” … today’s action is consistent with resolution of the five-months of congestion …”
Biotech had been in a congestion zone, a bear flag, for an incredible five-months. There’s no other pattern like on the chart of SPBIO (ticker, $SPSIBI, on StockCharts).
The analysis stated that if or when this sector breaks to the downside, the extended period of congestion suggests a long, sustained, move lower (not advice, not a recommendation).
So, here we are.
Now, the downside reversal is obvious. Then again, it’s likely we’re still very early in the move as we’ll see below.
Projection Methods
We’re going to use two projection methods:
First: The standard classical chart which identifies a potential Head & Shoulders pattern.
Second: The century old technique of ‘counting’ via Point & Figure (P&F).
Biotech SPBIO, Weekly (Classical)
Two charts are in classical format. The first shows the trading channel that spans 39-weeks from week 5/13/22, to week 2/3/23.
Note: Let’s not miss the symbolism (also, here and here): May 13th, 2022, was Friday. Then we have 2/3/23.
Note the “3,000-level”, discussed in the P&F section.
Biotech SPBIO, Monthly
If the H&S pattern is in-effect and the neckline is broken, we have a measured move projection to the vicinity of SPBIO ~ 1,700 (not advice, not a recommendation).
Now, on to the P&F.
The ‘P&F’ chart has been used as a forecast tool for over one-hundred years.
The idea is to ‘count’ the number of congestion points and then project that congestion either higher or lower.
In our case of a breakdown, the projection is lower.
Biotech SPBIO ($SPSIBI), Daily P&F
The P&F chart comes up with roughly the same lower projection; approximately 1,700 (not advice, not a recommendation).
Looking at the P&F, we can see a steady amount of congestion with few breaks, that is, until we get to the left-most area.
There, we have a break of twelve boxes.
In classical P&F terms, that break of 12, indicates the SPBIO may ultimately reach the 1,700 level, but price action could be choppy after the initial count.
That initial count equates to around 3,000 for SPBIO, which just so happens to be an intermediate support level as shown on the Monthly chart.
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.
How appropriate then, that someone who typically plays the ‘village idiot’ comes out with the truth.
Whether the ‘false narrative’ is finally crumbling or not, is not directly related to analyzing price action.
It does, however, provide the backdrop.
The ‘Big Reveal’
The last update in biotech had this to say (emphasis added):
“If this is the big reversal and biotech is the downside leader, unfortunately, that could mean a planned ‘reveal’ by the mainstream media.“
What wasn’t known, was just exactly how the truth would come out. Now, we know.
All of which, brings us to the topic at hand: Biotech SPBIO.
It turns out, SPBIO, is trading most consistently, on a three-day pattern.
Biotech SPBIO, 3-Day
In Wyckoff terms, the market itself defines what timeframes and what support/resistance levels are important.
Next up, we’re going to invert the chart to mimic the price action observed on the leveraged inverse fund LABD.
Biotech SPBIO, 3-Day, Inverted
And now, the characteristics of this sector the market itself, has revealed.
At this juncture, SPBIO, trades in a sequence of 3-Days after which, if there’s a directional move, continues on for nine consecutive bars.
After nine-bars, price action typically enters a correction for an undetermined amount of time.
After the correction’s compete the market has (in the past) continued on a directional move for another nine-bars.
Then & Now
We’re currently in a directional move that’s five ‘3-Day Bars’ in thus far.
If the market adheres to its prior behavior(s), we have at least four more ‘three-days’ to go (not advice, not a recommendation).
Note, the current reversal was identified to the day, with this update:
“However, today’s action is consistent with resolution of the five-months of congestion (not advice, not a recommendation).”
The fact the congestion period for SPBIO has taken so long to (apparently) resolve itself, has produced the potential for price action to go farther, last longer than anyone would normally expect.
That move if it happens, connects well with the introduction at the top of this post; a large part of the public has been informed in no uncertain terms, it was all a lie.
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.
With today’s heavy downward action, as we head into the close, any number of scenarios could play out.
Work has already been done on INTC, KMX, MRNA, Biotech Leveraged Inverse LABD, and others.
With such a decisive push lower, there could be some kind of short covering late in the session.
For example, as of this post 2:15 p.m. EST, KMX (detailed below) appears to be coming off the day’s lows.
CarMax Weakness
The daily chart has KMX, right a the bottom of a trading channel.
Price action may continue to rebound from this area heading into the close or not.
If there’s a rebound, naturally Put options will begin to decay in value … a desired outcome if one is looking to enter short (at the cheapest price possible).
The bottom of the channel line could be all there is for this week or we could be heading to much lower levels.
It’s up to the trader/speculator to decide (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.
Of all the major indices for today’s (Wednesday) session, biotech’s SPBIO, Leveraged Inverse Fund LABD, had one of, if not the largest gain @ +10.48%.
The last update identified two sectors to watch for short positioning: Real Estate IYR, and Biotech SPBIO; Short positioning via leveraged inverse funds DRV, and LABD, respectively (not advice, not a recommendation).
Since that post, DRV is up + 1.74%, and LABD is up + 8.58%, both measured on a close basis.
The ‘Big Reveal’
Remember: When price action turns south, that’s when the bad news comes out.
If this is the big reversal and biotech is the downside leader, unfortunately, that could mean a planned ‘reveal’ by the mainstream media.
Anyone going to alternative sites such as BitChute, ZeroHedge, Rumble, know full well what’s happening.
Maybe we’ll have another distraction like the 100-th (at last estimate) food processing plant fire or even something totally retro, like a balloon flying across … oh, wait. 🙂
Biotech SPBIO, Leveraged Inverse LABD
We’ll get straight to the point as prior updates have built a substantial case for a long term, significant reversal.
Recall, LABD is the leveraged inverse of SPBIO. The daily chart shows the current set-up.
This site does not provide investment advice.
With that said, one could infer from this prior post (at the bottom), a position in LABD had already been established and included a hard-stop.
That was indeed the case.
Next Steps
There’s no guarantee on how far or how long a directional move will go.
However, for SPBIO, one can observe since the February 2021, reversal from all-time highs, a sustained, directional move typically lasts 4 – 6 weeks.
The next update will show the best chart timeframe (multiple days) that resulted in capturing the majority of the directional moves since the February 2021-high.
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 large number of VIX (volatility) Calls, tells us, not to expect an immediate sharp move lower.
Those Calls will likely need to be bled-off in value, before we get a significant downward spike … if there is one.
Market Summary, Watch List
Over the past week, there are two markets that are being monitored for short position entry: Real Estate and Biotech; IYR, and SPBIO, respectively.
After nearly five months of price action whipsaw and congestion, biotech appears to be in a nascent downside reversal. Real estate looks to have reversed today (not advice, not a recommendation).
Biotech has been the weakest (technically) of all the major indices (except miners, GDX and GDXJ).
We’re going to look at the daily chart of SPBIO, to see the opportunity and the risk.
Biotech SPBIO, Daily Close
Since late September last year, there has been sideways-to-up, price action congestion.
Price action today, appears to have resolved into a nascent reversal.
We’re going to invert the chart to mimic the leveraged inverse fund LABD, showing the opportunity and the risk.
SPBIO, Daily Close (Inverted)
The prior two days of Fed induced bullish short-covering hysteria, have resulted in a decisive penetration of the support level, as shown.
By definition, this puts us in Wyckoff ‘Spring Position’; be on guard for a potential reversal.
Positioning
There have been many false starts to this sector’s reversal as evidenced by previous posts.
However, today’s action is consistent with resolution of the five-months of congestion (not advice, not a recommendation).
Every trading/speculator has their own style and this site does not give financial advice.
With that said, a (highly leveraged) short entry via LABD, would have a hard stop at today’s low.
At present (2:15 p.m., EST) and entry at LABD 12.91 would have a stop at 12.45, yielding a ‘risk’ of 0.46-pts.
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 clock is ticking for biotech in so many ways. Now, one more event.
Shown below is an inverted chart of biotech sector SPBIO.
While all the major indices have posted a bear market rally above their 200-Week moving average (except the miners), the SPBIO, has remained firmly below those levels.
Now, today, we have a decisive penetration of resistance as shown on the daily below.
The chart has been inverted to mimic the 3X Leveraged Inverse Fund LABD.
So, ‘resistance’ now becomes ‘support’ on the inverted chart.
Biotech SPBIO, Daily (Inverted)
We’ve penetrated ‘support’. Therefore, we’re in Wyckoff ‘Spring Position’, ready for reversal.
Even as this post is being created (2:25 p.m., EST), LABD is coming off its lows; currently trading at LABD: 12.61
A push back above support (approx. LABD 14.00 area), would indicate the spring reversal, is underway (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.
Let’s see if the market’s ready to hand it to this sector. What’s the price action telling us.
Biotech SPBIO, Weekly
The weekly chart shows the potetial breakout.
However, since we’re looking at this from a ‘going short’ perspective (not advice, not a recommendation), the chart following this one is inverted.
When we invert the chart, it takes on a whole different look.
Biotech SPBIO, Weekly (Inverted)
If price action’s spent over three months getting where support has been penetrated only to have it fail into a reversal, the ensuing move has massive potential.
In Wyckoff terms, it’s cause and effect.
The ’cause’ has been three months of congestion. The ‘effect’ is a potential long duration, or wide volatility move.
Before The Open
It’s twenty minutes before the open and 3X leveraged inverse fund LABD, is trading higher by about +3.5%.
This is normal behavior whether we have a reversal or not.
One last check of ZeroHedge, before releasing this post turns up this:
Senator Questions CDC On Why It Claimed No ‘Unexpected Safety Signals’ For COVID Vaccines
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 a digression; in Texas, we’re just now coming out of yet another record-breaking cold spell.
That’s two, never before seen record breaking low temp events within the past three years!
How does that fit with the global warming narrative?
Anyone awake knows full well what’s going on … and it’s not global warming.
Who’s On First: NFLX or TGT?
Now that vending machine Carvana (CVNA), is out of the way, who’s next?
Partly as a result of economic decline and partly from the decision to take consumer spending elsewhere, Netflix and Target now appear ready to continue their implosion.
More on their technical chart conditions in the next update.
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® 