‘Cash In’

As it becomes more apparent the entire ‘mask experience’ was a mirage, a fabrication, there may be no bottom in sight for biotech.

Fotosearch_k21914517New highs for IBB back in April, prompted this video ‘analysis’ clip.

Biotech, moved even higher from there.

Anyone shorting IBB (via BIS or LABD) back then, most likely covered with a significant loss.

Now, things look different.

In classical analysis, Wyckoff parlance, what’s been going on is called an “up-thrust”.  It’s an archaic term to describe a false breakout:  A reversal.

Biotech may actually be one of the market leaders to the downside.   It’s already made new highs and is reversing now.   

The overall market, the S&P could defy gravity and prognostications for an immediate crash by making its own new highs before rolling over.

A technical chart and nascent trend-line of IBB, is here.

If we keep getting lower lows and price action stays within the trend, there’s significant downside potential.

Are You Experienced?

Every major corporation has the same tag line … it’s all about the “experience”.

Their goal’s nothing substantial; just the ephemeral. 

Shadow stats reports that real unemployment is at 35%; already way past 1930’s depression-era levels.

Fotosearch_k34589852We won’t have to go searching for the experience.

It’s coming to us.

Even those still employed are wondering if they’re next or what’s going to happen if/when their pay is cut.

As a result, huge masses have poured into the markets; Desperate for income or distraction from collapsing food supplies, society out of control and free-fall economy.

Meanwhile, the market itself has already told us where to go and where to look.  The S&P just opened down 2.3% and may be starting the next leg lower.

Is that the place to go … the S&P? 

The S&P is probably the most computer controlled, algorithm induced, manipulated market in the world.  All eyes focused on it.

Back around 2009 or so, my firm stopped trading the S&P and moved on to a more effective approach.

A strategic view was developed.  Trading methods created that were focused on positioning instead of instant (day-trade) gratification.

With that in mind, biotech has been the topic of discussion and analysis.  Price action in IBB has been tight and getting tighter.  That allows one to take a low-risk short position (not financial advice) if so desired.

At this point, knowing where to go and where to look, may be the only essential experience.

Cat & Mouse

It’s rigged.  It’s been rigged from the beginning.

Back in the day, the father of technical analysis, Richard D. Wyckoff, called this sort of manipulation, the ‘composite operator’, or the ‘central mind’.

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If one could figure out what the big players were doing, there’s opportunity to position for profit.

That’s why tape reading was (and is) so important.  The moves and potential moves of the big players show up on the tape.

So, what’s happening with the cat and mouse chess game now?  Where should one look for potential profit?

A better question is not ‘what’s happening?’, but rather, ‘what’s not happening?

Until price action proves otherwise, what’s not happening is biotech (IBB) is not participating in the swift rally over the past month.

It stopped-dead right around May 13th.  That’s where to look.

While all others are focused on if/when the market’s going to new highs or crash, biotech looks like it’s under distribution.

Attempts to move higher are being sold off.  The market has stalled.

Things can change quickly.  Distribution can turn into accumulation if there’s a breakout to new highs.  However, at this point, price action is tight and (short position) risk is low.

 

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.

Sooner, Not Later

The bond market’s either fully under control with a planned collapse; or it’s out of control and still collapsing.

Fotosearch_k25875817-clockNo matter who or what is at the helm, bonds are down and rates are rising … and they’re rising quickly.

The real harbinger will be bond behavior if/when the overall market reverses.

If the market heads lower and bonds head lower as well, that’s when the real panic starts.  There’ll be no safe haven.

Making it more surreal, throw in gold with its own reversal.

Trillions being printed, money spigots wide-open, yet gold is lower.  Something else is going on.

Then, there’s biotech.  For the past three weeks, biotech has not participated in the market rally.  It’s a clue we may be at a significant, sustainable, dramatic reversal.

It’s been five trading days since the ‘Time’s Up‘ post and IBB has made a series of new daily lows; including today.

Debt Bomb Set

The market is set to reverse.  The debt bomb fuse has been lit and bonds are already heading lower with rates rising.

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This slow but persistent reversal was first covered here.  Now, the TLT is nearly 3% lower; a significant move for such a massive market.

As of this post, real estate (IYR) is attempting a breakout above resistance.

A failure here could be lethal as this market has been severely lagging the overall ‘recovery’.

Opportunities abound to generate profits and income; but it’s not on the long side.  Everybody’s a genius in a bull market.

It’s the bear market where fortunes are made … quickly.

Banking Sector, Jailbreak

The bank sector, XLF, is attempting to breakout above resistance.

Fotosearch_k3712001-borderA failure here, indicates a pivot to lower, possibly much lower levels.

This chart (6/2/20, update) shows the current situation.

The market has just opened and XLF is hovering near its recent highs.

An XLF move below the prior day’s low of 23.34, means a possible failure; the beginning of the next leg down.

As just reported here, there’s no recovery in sight.

Biotech: Time’s Up?

It’s been seventeen days since the first post that biotech (IBB) was about to reverse.

Fotosearch_k2638638-borderHysteria, hope and greed take time to bleed off.  It looks like today’s the day.

Unsuccessful attempts to move higher have exhausted the bulls.

The expectation is for a swing trade to lower levels. 

A close below IBB, 130.81 would provide extra weight to the down-swing potential

However, if “this is it”, the two-trillion dollars of bottled air (as David Stockman puts it) may be on its way out.

Technical, price action discussions on IBB and the inverse vehicles BIS, LABD, can be found at this link.

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.

Where’s The Crash?

No recovery in sight.  Pay cuts set the stage for sustained decline.

The markets however, appear to have their own agenda.  Like Clara Peller from the old Wendy’s commercial; Where’s the crash?

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If we use 1929 as the model, then we’re either in one of two places.

The ’29 market had a sharp drop in May of that year before it went on to September all-time highs.

We could be there … with new all-time highs ahead.

Or, behind door number two; after the initial leg down in September – October of ‘29, the market recovered until late March of 1930, before rolling over.

Market behavior now, mimics the latter scenario.

The bond market continues its reversal.  Real estate’s a lagging market, having pushed higher and negating its previous reversal potential; at least for now.

Biotech seems to be in a world all its own.  The reversal identified here, continues.  Instead of an immediate move lower, we’ve got a topping process.

The 30-minute chart at this link shows attempts to move higher that are not (for now) successful.

If a new daily low is posted in today’s session (below 126.63), we may consider the topping process complete.

No Bailout: Real Estate

Commercial real estate has not joined the bailout party; it may be strictly political as described here.

iStock-1048065504If that’s the case, with political backlash a possibility, commercial real estate may be left to implode.

Highlighted four days ago here and here, was the probability of a counter trend move for real estate ETF, IYR.

That move appears to be over.  As of this post, IYR has just penetrated the prior day’s low (of 72.29), adding weight we may be in the next leg down.

Using standard tools such as Fibonacci, a projected move points all the way to ~35.50, for IYR.  At current levels, that represents a decline of 51%.

Short Squeeze Bull Trap

Yesterday’s action in the markets looked like a short squeeze; a sharp, near vertical move higher.

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Only later can one be sure.  When the squeeze is over, prices collapse.

At this point we’re at a critical juncture.

A reversal could signal the beginning of the next leg down.

With that in mind, SPY is trading lower in the pre-market session.