Category Archives: $SPSIBI

A War of Attrition

June 11, 2022 By in $SPSIBI, Biotech, LABD, LABD-22-03, SPBIO 2 Comments

To Survive, Prosper, You Need To Have The ‘Stomach’

There’s nothing like the Vietnam war to remind us, the enemy on their home turf has the advantage and can exercise a war of attrition.

Similar to the Soviets in Afghanistan; the natives, the Mujahideen, wearing down the invading army month after month and year after year.

The Oligarchs and The Proletariat

Day after day, another food processing plant burns down; another fertilizer train mysteriously derails, a natural gas facility unexpectedly blows up.

‘So it goes’, as Vonnegut wrote.

Americans, except for a few, don’t have the stomach for discomfort. The Depression-era generation is long gone.

However, this site, is for that small few.

As can be seen with the above ‘events’, we’re in a long-term chess game. Adding a potential twist is this video at time stamp 12:50; seeds may now be dead-on-arrival.

Is the typical money management firm, or market analysis YouTuber, taking all of this into account?

Or are they still talking about ‘due diligence’, ‘fundamentals’ and what The Fed ‘has to do’?

A good number, if not the vast majority of these firms, may be on a course for self-destruction.

More chaos to come as that industry gets crushed.

With that, let’s review why there’s been so much focus on biotech and specifically, SPBIO.

The Major Indices or ETFs

As of yesterday, Friday, this is where the major indices stood in relation to all-time highs or ‘recovery’ highs.

Listed from smallest percentage loss to the largest.

Biotech SPBIO, has been down five quarters in a row and is working on the sixth.

Because of last week’s action, the sector may be poised for its most dramatic part of the decline (not advice, not a recommendation).

We’ve had an on-going analysis of the sector with recent links provided here, here, here, and here.

Positioning

If we’re about to have a market implosion in the coming week(s), SPBIO, has already set itself up to be the downside leader (not advice, not a recommendation).

That doesn’t mean ‘straight-down’, although it’s always a possibility.

The most likely price action is more SPBIO downside (LABD, higher), with some oscillation in the accumulation area shown on leveraged inverse LABD, below.

SPBIO, 3X Leveraged Inverse, LABD

Un-marked chart

Potential zone for oscillating price action.

Now, adding the trading channel, we see the possibilities.

In the coming week, there’s also the potential for a ‘test’ where SPBIO, rises and LABD, declines.

However, from an empirical standpoint, when a Friday has a violent down move that closes near the low, it increases the odds for downside follow-through the coming Monday.

Positioning

The data below is taken from one of the accounts trading this market. It’s provided as a courtesy; showing entries and exits as the trade, LABD-22-03, unfolds (not advice, not a recommendation).

The expectation is for price action to allow the position to be increased based on more biotech downside.

With the Fed meeting due up this week, it’s going to be interesting.

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 … ‘Brace for Impact’

June 10, 2022 By in $SPSIBI, Biotech, IBB, LABD, LABD-22-03, SPBIO, Wyckoff 2 Comments

Downside Leader

From the outset of the bull market’s end, biotech has been the downside leader.

Of the two indices being tracked, IBB and SPBIO, the latter of the two, is the weakest.

Over the past several weeks, it’s been like a terrier on a mailman’s leg concerning positioning short this index (not advice, not a recommendation).

In the end (as we’ll see below), it turns out that waiting for an actual penetration, print, and close above resistance, was the best approach.

Now, it’s obvious, we’re in a reversal.

The unfortunate part from an economic standpoint, this could be the next big leg lower.

Biotech SPBIO, Daily Close

Penetration and close above resistance (blue line).

Then, price action retreats below resistance and back into the trading range; Wyckoff, Up-Thrust (reversal).

It’s important to note, if SPBIO closes at this level or lower, the prior analysis of ‘grinding to a halt‘ on a weekly close basis, remains valid.

Positioning

Right or wrong, the short position LABD-22-03, was never fully exited (not advice, not a recommendation).

Everyone has their own style.

From a personal standpoint, I despise ‘chasing’ the market. Chasing is for the lazy or frightened who are too afraid to pull the trigger. No thank you.

In fact, the LABD-22-03, position was increased near the end of yesterday’s session.

The intuition, the gut feel, if you will, was ‘This sector’s going to reverse. When it does, it’s going to reverse hard’.

With today’s pre-market action (about fifteen minutes before the open), LABD, trading higher by 3.10-points, or +6.35%, that intuitive assessment is proving correct.

At this point, an obvious stop level would be yesterday’s LABD, low @ 45.77

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 … ‘Hold the Phone’

June 8, 2022 By in $SPSIBI, Biotech, LABD-22-03, SPBIO 2 Comments

Danger Point … Print, Danger Point … Close

First, biotech SPBIO, ‘printed’ into the danger point.

The next day (yesterday), it ‘closed’ into the same region.

The charts below show where things left off at that close.

As is frequently done, farther down, we’re going to invert the chart to show price action similar to the leveraged inverse fund LABD.

Biotech SPBIO ($SPSIBI) Daily Close

Adding zoom for more detail

Next, we invert the same chart to show how it looks going short via LABD (not advice, not a recommendation).

Biotech SPBIO ($SPSIBI) Daily Close … Inverted

We can see that price action has been in a similar set-up before; just prior to a significant decline (non-inverted).

Summary

Obviously, Monday’s print into the danger point was taken as the set-up for a reversal. That reversal appeared to be taking hold based on that day’s price action.

Yesterday, reversed the reversal but then wound-up printing and closing into a danger point; an up-thrust condition on the standard chart and a spring condition when looking at it on the inverted scale.

Positioning

As was done in prior action, the position size in LABD, was reduced as price retreated (not advice, not a recommendation).

However, the position was not exited entirely.

Pre-market action has LABD, trading higher about 1-point or 2.0%. This behavior is consistent with a potential reversal.

Today’s close is the important part.

Higher for LABD, and we’re in a potential reversal for a significant move; lower and it’s time to exit completely and stand aside (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 … Grinds To A Halt

June 4, 2022 By in $SPSIBI, Biotech, LABD-22-02, Neil McCoy-Ward, S&P, S&P 500, SPBIO 3 Comments

‘Two Weeks, To Flatten The Curve’

On a weekly closing basis (as we’ll see below), it’s obvious.

Upward (net) progress in biotech SPBIO, has come to a standstill.

While the media continues to foment the lie that somehow interest rates have reached their limit, or ‘Da Fed’, is going to do this or that, behind the scenes the plan … set out years ago, continues to unfold.

Before we get to the charts, let’s not forget what’s happening ‘out there‘. The number of idiots seems to be increasing without bound.

As Goethe said way back in 1826, ‘There is nothing more frightful than ignorance in action’. He was being polite with the ‘ignorance’ part.

Now, on to the charts.

The un-marked, chart of biotech SPBIO, is below.

The second chart zooms-in, showing the percentage changes on a closing basis.

Biotech SPBIO, Weekly

Zoom in, showing net progress.

One would think, since biotech has dropped so significantly, there’s no more (downside) left.

Certainly, anything can happen.

However, the premise is, the overall collapse is still in the early stages.

We have not (yet) had a 50% – 90%, drop in the S&P.

In addition, pension funds are likely to go broke.

So all those $250,000/year ‘retired’ lifeguards that J.B. has spoken about? Well, how do you leverage that ‘skill’ to another industry?

SPBIO, Inverted

Next up, the inverted chart of SPBIO, to mimic the action seen in leveraged inverse, LABD.

Then after that, is the same chart marked with a potential forecast of where price action may be heading (not advice, not a recommendation).

Now, the markup showing potential action should biotech continue its decline.

Zooming in on the last few weeks of action.

The fact price action has bounced from this area of the chart, tells us the trading range is valid; the blue line is being recognized by the market.

Now as shown, we’ve come to a halt.

So, what happens next?

Positioning

As SPBIO ground its way higher (LABD lower) over the past week, the short position, LABD-22-02, was reduced further but not eliminated (not advice, not a recommendation).

Since there’s no more net progress upward and we’re still in an overall downtrend, expectations are for biotech to either stall, or reverse, continuing its trend lower.

As stated previously in this post, the market’s prior congestion was ‘complex’.

So, we’re expecting ‘simple’ this time around; all of which lends support to more downside.

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 … Stall & Reverse

May 31, 2022 By in $SPSIBI, Biotech, Jerimiah Babe, LABD, LABD-22-02, SPBIO

Heading Off The Cliff ?

We’re about to find out.

The last update presented that whatever happens with biotech (SPBIO), it’s likely to be decided quickly.

That conclusion was based on the ‘rule of alternation’ and the fact, the whole short squeeze event from last week, did not result in a new weekly high.

That, Was Then

What we have now so far in today’s session, is an attempt to move higher by SPBIO, which appears to have stalled and now, looking to reverse.

The reversal part won’t be confirmed unless, and until a new daily low is posted.

For today, posting a new low is somewhat of a tall order because of Friday’s wide trading range … but we’ll see.

Instead of going to the actual index, SPBIO, we’ll look at the 3X leveraged inverse fund LABD

SPBIO, 3X, Leveraged Inverse, LABD

Note:

The chart below, is a 3-Day chart with Friday, completing the last ‘third’ day.

As price action has moved lower, energy behind that move is weakening; seen in the thrust divergence

Why a 3-Day Chart?

When’s the last time you saw a 3-Day, 2-Day, or 6-Day, or any other non-conventional chart in anyone’s analysis?

Anybody? … Bueller? Bueller?

It’s not different, just to be different.

Shown below, we have the same 3-Day LABD, compressed and marked up with a trading channel.

At this juncture, the 3-Day shows the nuances more clearly.

If this trading channel is in-effect, that is, if it’s active, potential exit points for an LABD position at this point in time, would be 105, or 240 (not advice, not a recommendation).

For LABD, to get anywhere close to those points, especially the second (240-level), biotech would need to collapse.

Summary

There’s plenty of chaos to go around. We have those who are still arguing whether or not ‘it’s the bottom’.

Such arguments are potentially (and likely) from those completely unprepared.

As Jerimiah Babe said in one of his latest videos, ‘something’s going to break’.

When or if that break happens, it won’t be to the upside.

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

Economic Free-Fall

May 29, 2022 By in $SPSIBI, Appalachia's Homestead, BIS, DRV, DRV-22-03, I Allegedly, IBB, IYR, Jerimiah Babe, LABD-22-02, Red Hurricane, SPBIO, Wyckoff, ZeroHedge 2 Comments

Anecdotal Data, Says Implosion

As we speak, economic activity is shutting down … fast.

Amazon shipments cancelled, gas stations going dry, banks halt lending, real estate sales collapse.

Meanwhile, the market’s in a short-squeeze.

What happens next?

We’ll discuss real estate and biotech farther down but first the data sources.

Dan from i-Allegedly reports here, he still has a couple of rubes (my word) that think the market just bottomed out.

Good luck with that.

As we’ll show below, the real estate bear market (IYR) rebound, was identified ahead of time.

Next, we have Red Hurricane describing one semi-trailer load after another being cancelled. He hauls for Amazon.

Shipping activity’s contracting, seemingly, by the minute.

Lastly, this link where the D-word, ‘Depression’ is used within the first one-minute, twenty seconds.

Bottom-out in the stock market? Probably not.

So, let’s take a look at real estate IYR, and see where it might go next.

Real Estate IYR, Weekly Chart

The last update (link, here) showed potential to rise into a test of resistance. That’s exactly what happened.

Back then:

And now:

With zoom

Obviously, the upward test happened much quicker than anticipated … but it was anticipated … no surprise.

Real estate got itself into Wyckoff spring position; so, a rebound (test) is normal market behavior … short-squeeze or not.

If it was a squeeze and if it’s over, we can expect an immediate drop in price action. We’ll analyze that as it plays-out in the coming week.

Now, on to biotech, SPBIO

Biotech SPBIO ($SPSIBI), Weekly

Some housekeeping first.

Obviously last week, with being short, more downside action was anticipated resulting in upside for LABD.

On Friday, that did not happen. Biotech was part of the squeeze as well.

The short position via LABD, identified as LABD-22-02, was reduced but not exited completely (not advice, not a recommendation).

At present this is where we are.

First, we’ll start by inverting the chart to mimic the action of 3X inverse, LABD.

Next, we’ll zoom-in and highlight the ‘squeeze’.

Doesn’t look like much when viewed that way does, it?

Next, we’re going to zoom-in, on the zoom

In spite of all the squeeze chaos on Friday, price action could not post a new weekly low (high on the non-inverted).

We’ll see this Tuesday, if that’s important or not.

This post is getting long but let’s end with the rule of alternation. The same chart is marked up below.

If this rule is still in-effect, we’re at a juncture where one can expect a ‘simple’ alternation.

We’ve already had complex action on the prior congestion; so, we can expect current action to be simple in character.

That means, price action’s not likely to stick around at these levels whether it’s going up or down.

Based on the above analysis, the expectation for Tuesday’s open is a gap lower for SPBIO and higher for LABD.

If that does not happen, something else is at work … we’ll report on that as necessary.

Summary

Has the market bottomed out? Not likely.

Those who are at this late stage, still arguing with Jerimiah Babe and Dan (and Patera), that the market’s rebounding, everything’s fine, are in a state of delusion.

The mindless herd following spending with ever newer cars, moving up to the McMansion, opulent vacations, posting it all on Facebook is most decidedly, gone.

It’s finished. It’s Done.

The problem is, as J.B. notes above (time stamp 7:15 and 8:30), those still living that life don’t seem to know it’s over.

For the leaders, the tiny minority and those reading this post, who are, or who have been preparing for years, it means potential huge (life changing) opportunities.

That is, as long as the markets, the banks and other infrastructure stay open; not guaranteed in any way.

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