Category Archives: $SPSIBI

Biotech, Fibonacci, & The Tape

September 24, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-18, Livermore, Loeb, SOXS, SOXS-24-16, SOXX, SPBIO, Wyckoff, XBI Tags: , , , ,

Reversal of Significance

Wyckoff (tape reading) analysis identified the potential reversal in XBI.

In the past two days of trading, biotech XBI, is decisively lower (not advice, not a recommendation).

However, there’s more to this story.

As we’ll see below, Fibonacci is at work as well.

Biotech XBI, Daily Close

From closing high on 2/27/24, to closing high on 9/19/24, was a Fibonacci 144 days (minus one).

Ladies and Gentlemen, it doesn’t get much better 🙂

The black lines show resistance penetration, up-thrust and reversal.

Livermore, Wyckoff & Loeb

The trading methods of the three market masters above, can be summarized as:

Strategy, Tactics and Focus.

Livermore’s method of ‘what’s going to happen in a (potential) big way’, pointed to biotech.

Wyckoff’s analysis was used to identify (to the day), the potential for a significant reversal.

Loeb, who is less known, was the former Vice Chairman of E.F. Hutton, disparaged ‘diversification’ as the ‘averaging of errors’; meaning, if you don’t know what you’re doing (in the markets), you ‘diversify.’

We can see all three at work in the selection to go short biotech via LABD (not advice, not a recommendation).

Fixing Errors

For those watching, you got to see up close and personal a trading error on shorting the SOXX; specifically, an -11.6%, hit, link here.

As of this post, four trading days later, that loss has been fully recovered and then some.

This is how should be done.

Clear the mind, look for (don’t force) another opportunity, get to back to business.

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 Power Goes Out on Biotech

September 21, 2024 By in $SPSIBI, Artificial Intelligence, Biotech, Dr. Elder, LABD, LABD-24-18, NVDA, SPBIO, XBI 1 Comment

More ‘Natives’ Leaving

Like Yogi Berra used to say:

“It’s deja vu all over again’.

Only this time, instead of Nvidia, it’s biotech, XBI.

Nobody’s called on our hapless student at left … no, we’re still pumping out bullish propaganda to the masses.

Anything can happen and biotech could magically levitate to new, more manic highs.

However, the chart below, paints a very sobering picture.

Biotech XBI, Weekly Close

“What do you see?”

It’s been over six months of price action posting and then attempting to penetrate (closing above) the highs of the 101.50-area.

At Resistance: Bulls Exhausted

The center panel is Elder’s Force Index.

It shows (as with NVDA) a succession of force declines with each attempt to push higher.

The last force unit (19.4) has fallen off a cliff, compared to the unit prior (123.7); Force Index down over 84%.

Price action could always grind itself higher.

However, the inference is, the bulls are exhausted (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 (fake-out) Breakout

September 20, 2024 By in $SPSIBI, Biotech, Bonds, Federal Reserve, Interest Rates, LABD, LABD-24-18, SOXS-24-16, SPBIO, TLT, Wyckoff, XBI 1 Comment

That Didn’t Take Long

It was just four days ago, the mainstream (in this report) was telling us, be on the lookout for a biotech breakout.

That was then … here we are now.

Price action in XBI, attempted to break higher at the Fed announcement.

That move appeared to fail by the end of Wednesday’s session … then came Thursday’s launch higher.

However, that move may have failed as well.

Biotech XBI, Hourly

At this point, we’ve posted a Wyckoff Up-Trust (reversal).

If this is a significant reversal, we’re still in the very early stages; at The Danger Point®

Positioning

As can be seen in the sidebar, a short position was opened (yesterday), LABD-24-18.

That position has been increased in size during this session (not advice, not a recommendation).

The SOXX (short) Exit.

Yesterday, SOXS-24-16, was exited with an -11.6%, hit; so, everyone can see the effects of breaking one’s discipline (not respecting the position stop).

Don’t force the trade … sounds so simple.

Getting back to work, the XBI false breakout was recognized early and the trade opened.

Today, so far, we have follow-through, confirming the reversal.

Bonds Continue Lower

Bonds, TLT, are currently posting an outside-down (reversal) on the weekly timeframe.

The last time there was an outside-down on the weekly, was over two-years ago; week of August 5th, 2022.

After that, bonds declined a whopping 32% before (slightly) recovering.

Now, they’re posting outside-down … again.

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 … Breakout or Fake-Out?

September 17, 2024 By in $SPSIBI, Biotech, Bonds, Federal Reserve, Interest Rates, LABD, LABD-24-17, SPBIO, TLT, XBI, ZeroHedge 2 Comments

The Bull & Bear Side

The last biotech trade (going short) was back in August, as LABD-24-17.

The trade posted a -3.6%, loss and from then, the decision was made to stand aside.

The sector was not validating its up-thrust (bearish) set-up discussed many times prior; price action itself, showed something else at work.

Fast forward to now.

At this point, we’re at (upside) resistance and threatening to break out; biotech has made the news, link here.

Biotech XBI, Weekly

“What do you see?”

Shown below is a wedge formation, the likely premise for all the hoopla in the linked article above.

Also shown, we’re just ticks away from a Fibonacci 38.2%, retrace of the entire move; February 2021 highs to lows, May of 2022.

Possibly as important, the volume (magenta arrow); where is it?

Where’s the volume (demand) for this underperforming sector, rising into some kind of (potential) breakout?

If there is a breakout, which could be as soon as tomorrow’s Fed announcement, price action will be monitored closely.

Bond Digression

The Fed does what the bond market tells it to do (not advice, not a recommendation).

From the last report, the potential downside reversal, was negated and bonds (TLT) are at their own breakout (up-thrust) level.

That being the case, probabilities favor a rate cut; finally, after 1.5 years of mainstream jawboning on the topic.

Back to biotech.

If we do get an upside breakout and it fails … we’ll cover the downside potential at that point.

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

Update: Ins & Outs

August 16, 2024 By in $SPSIBI, Biotech, DRV, DRV-24-03, IYR, LABD, LABD-24-17, Real Estate, SPBIO, Wyckoff 1 Comment

Biotech and Real Estate

Those monitoring this site are witnessing the search (for the short entry) in real time.

As said in the prior update, just because Fibonacci lines up, both in time and distance, does not guarantee anything.

From a Wyckoff perspective, as a result of Wednesday’s XBI price action penetrating the prior days’ low, and then stopping dead, there was a probability of a (minor) spring … which we got the very next day.

By the way, that upward move (yesterday) carried the XBI, near another Fibonacci retrace level: 61.8%.

As a result, the LABD-24-17, was exited with about a 3.6% loss (not advice, not a recommendation).

Now, on to the action at hand.

Real Estate IYR, Daily

Depending how price action progresses, we’ll go into more detail on the technical condition.

Today printed a new daily low and we have an MACD (bearish) crossover still in effect.

Trade action was to go short via DRV with a representative stop (for DRV) one tick above the IYR high: 95.96 (not advice, not a recommendation).

Admittedly, it’s a tight stop and that’s the point.

If IYR turns and starts to exhibit buoyancy, we don’t want to hang around.

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 … Target & Reversal

August 14, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-17, SPBIO, XBI 1 Comment

Right On Schedule

Biotech XBI, meets target: Check

Biotech XBI, Fibonacci Day 8: Check

Biotech XBI, 50% Fib Retrace: Check

Biotech Fib 1-to-1 Projection: Check

Biotech XBI, New Daily Low: Check

Biotech about to ‘Hit the fan’: Check 🙂

Well, obviously the last bullet item is ‘not advice, not a recommendation’.

However, one can’t deny that all of the above bullet items (save the last) concerning price action have been met.

Fibonacci Retrace & Projection

Moving on to the chart, we have the XBI daily, with two Fibonacci overlays.

The first, is the typical retrace from high to lows; the second is a projection from the ‘a-b-c’ correction (a-b-c, labels not shown).

Biotech XBI, Daily with Fibonacci

Admittedly, it’s a busy chart.

The attempt here, is to show a ‘confluence of events’.

We’re meeting Fibonacci time sequence and two Fibonacci price action levels, simultaneously.

Obviously, that does not guarantee anything.

What is does do, is show we’re at a point where probabilities have lined up for a reversal (not advice, not a recommendation).

Positioning

As can be inferred from the sidebar a short has been opened: LABD-24-17, with stop level tentatively set at the LABD daily low for the session (not advice, not 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

So, Monday Never Happened …

August 9, 2024 By in $SPSIBI, Biotech, FAZ, FAZ-24-01, Financial Sector, SPBIO, XBI, XLF 1 Comment

Losses For The Week, Erased

Monday’s losses were (mostly) recovered by the close on Friday.

One might be inclined to think we can all get back to ‘normal’.

Normal, like rigged elections, poking the bear (expecting nothing bad to happen), attempted assassinations, fake data, falsifying employment records, more ‘visitors’ flooding in, you know, normal.

However, for anyone paying attention, the charts say we’re at The Danger Point® (not advice, not a recommendation).

The potential for biotech XBI, has been covered over the past few days (here and here), but we also have another potential set-up; the finance sector, XLF.

We’ll cut to the chase, with the chart.

Finacial Sector, XLF, Daily

It’s important to note: It was four days of retrace (upward) into the test; each day had less volume than the day prior.

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

A Tale of Two Scenarios

August 8, 2024 By in $SPSIBI, Biotech, LABD, LABD-24-16, SPBIO, XBI 2 Comments

One Up … One Down

No sooner had price action appeared to confirm a breakaway gap (link here), than today, it begins to threaten closing that gap.

With that said, we’ll look at two most likely scenarios for the coming session(s).

Biotech XBI, Daily

If XBI, manages to close the gap, it puts price action into an up-thrust condition as well.

A lower print keeps the breakaway gap intact and hints at much lower levels to come (not advice, not a recommendation).

Housekeeping

Short trade LABD-24-16, has been closed: Total Profit just over 11%.

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

Breakaway Gap … Biotech

August 7, 2024 By in $SPSIBI, Biotech, Bonds, Interest Rates, LABD, LABD-24-16, SPBIO, TLT, XBI 2 Comments

‘Today Was The Day … ‘

If there was a day to attempt a close of the (August 2nd) gap in biotech (XBI), today was that day.

With the higher open, supposedly from an interest rate policy reversal in Japan, link here and here, there appeared to be plenty of upside momentum for higher prices.

It didn’t happen

Instead, XBI posted a new daily low, painting that gap as a downside breakaway (not advice, not a recommendation).

As noted in other updates, failed moves are the most telling, getting focused attention from ‘The Street’.

Biotech XBI, Daily

The breakaway is noted.

In addition, trendlines have been updated.

The market could somehow recover and close the gap.

However, with the poor bond auction, pointing to no rate cut or even a rate increase, probabilities suggest more downside for XBI (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

Brokerages Blow Up

August 5, 2024 By in $SPSIBI, Biotech, Dollar, Dr. Elder, LABD, LABD-24-16, SPBIO, UUP, XBI 1 Comment

Positioned Ahead of Time

Developing a trading plan that accounts for broker outages, blow-ups, and platform lockups, was presented on this site, as early as December of 2020.

Back then, we had this:

“Built into that [system] approach is recognition there will be market outages, trading halts, communication interruptions and natural disasters.“

“The one thing that may separate this site from others, these (potential) events are taken into account.“

Fast forward to now.

Those events are not ‘potential’ anymore, but a reality.

Note: Before leaving that post, from December 2020, let’s not forget, the dollar reversal (and rally) discussed, is still going, nearly four years later!

That’s what’s meant by ‘a strategic, engineering perspective’ (see About).

Moving on to the topic at hand.

The last update showed potential trendlines in biotech, XBI.

As a result of today’s action, we’re revisiting the post with new information.

Biotech XBI, Weekly

As Dr. Elder said years ago, ‘trendlines are not made of glass’. Trendlines are more like a wire fence; the market can attempt a breakout that may ultimately get negated.

With the weekly XBI, that may be the case.

We’re about one hour before the close, only one day into the trading week; it’s pre-mature to say XBI, will finish the week (or even the day) inside the trendline shown above.

However, if we do end the week lower, it may be a serious bellwether; XBI could be in deep kimchi (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