With that understood, we’ll present three potential scenarios for Moderna (MRNA) price action for the upcoming days, or week(s).
When we last left our chief cook and spike-protein injector, price action was in a downtrend but also in Wyckoff spring position; indicating at least a chance for upside.
As with the CarMax (KMX) analysis, still playing out with Scenario No. 2, and/or No. 3, at this link as the forecasted price action, we’ll show potential Scenario No. 1 – No. 3, for MRNA, below.
Moderna MRNA, Daily, Forecasted Action
Scenario No. 1
Upside wedge breakout
Scenario No. 2
Downside wedge breakout with no test
And now, the most probable, ‘If there’s a downside breakout.
From a short-dated options standpoint, Scenario No. 3, is the most desirable (not advice, not a recommendation).
If there’s a downside breakout with no test, there’s always the possibility at some point, there will be a test, which in turn completely wipes out any potential gain in the (put) trade; time would run out and the option expires.
Re-Visiting, Elder
Recall, in the example that Dr. Elder gave, he bought OEX Put Options at 3/8-ths, back in the day when the markets traded in fractions.
Three-eighths is 0.375, which gives a target value on which option to select (not advice, not a recommendation).
To get to that small of a fraction, the option’s either way out of the money, short on time, or both.
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 a potential right-side trend (and channel) contact confirmed; shown below at – 86% annualized, odds are now favorable for a Put strategy.
In addition to the technical factors discussed, listed at the bottom of this post are no fewer than 22-links to the current fundamental state of biotech and their ‘handiwork’.
The weekly chart of MRNA, has a Wyckoff Up-Thrust and a test, confirmed by the downside pivot.
Moderna MRNA, Weekly
Notice the reversal action took place at a very weak Fibonacci 23.6% retrace.
The two blue lines on the daily chart (below) are exactly parallel.
The grey lines are parallel to the blue lines and intended to show MRNA, exhibits a repeating (downtrend) pattern.
Moderna MRNA, Daily
The expanded version on the daily has support being penetrated (horizontal blue line) and then ‘spring’ action last Friday as a result.
Of course, it’s ‘what happens next’, that’s the question.
In a prefect scenario, price action would thrust lower for a day or several days and then come back up to test the underside of resistance.
Elder Option Strategy
This strategy is taken from Elder’s book ‘Come Into My Trading Room’, and seeks to use as short-dated options as possible.
Doing so, requires the discipline to wait sufficient amount of time for price action to get into position and for option time value to bleed-off.
Potential Upside
Since we’re already in spring position and price action moved off the lows on Friday, MRNA could continue the upside right back to, or past the downtrend line.
However, with massive (undeniable) fundamentals building buy the day, and MRNA being mentioned specifically in at least one link below, probabilities favor the downside.
Supporting Links For The Bearish Stance
Florida Surgeon General Warns Life-Threatening VAERS Reports Up 4,400 Percent Since COVID-19 Vaccine Rollout
US Says Government, Not Moderna, Should Face COVID-19 Vaccine Lawsuit
New Medical Codes For COVID Vaccination Status Raise Concerns Among Experts
Watch: Rand Paul Grills School Of Nursing Head On Student COVID Vaccine Mandate
US Navy Lifts COVID Vaccine Mandate For Sailor Deployment
Mainstream Media Continues To Push False ‘COVID Heart’ Narrative To Explain Excess Deaths
NFL Players’ Association Urged To Screen for Heart Issues Over Vaccine Side Effects
WHO Suddenly Shelves Plans For Second Phase Investigation Into Origins Of COVID-19: Report
Watch: CDC Director Suggests It Will Never Change Child-Masking Policy
Rand Paul Introduces Bill To Halt Funding For Hospitals Denying Care To The Unvaxxed
Welfare State Weakens… 30 Million Americans Are About To Lose ‘COVID’ Food Stamp Handouts
IMF Says World Needs To Prepare For The “Unthinkable” After COVID, War In Ukraine
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 last update about our chief cook and bottle washer of gene ‘modification’ had this to say about price action.
“We’re about forty minutes into the session; Moderna (MRNA) has just confirmed the up-thrust reversal discussed in the last update“.
From that point Moderna (MRNA) declined for seven weeks for a total of around – 31.5%.
However, that’s not the most important part.
In that update, a trading channel was shown which at the time, was declining at – 93.7%, on an annualized basis.
Well, the channel is back.
Only this time, probabilities and price action have come together to set up for a potential sustained decline.
Moderna MRNA, Weekly
Above, we have a Wyckoff ‘Up-Thrust’ and a test that has since turned lower.
Next, we have a series of repeating trend or channel lines.
Additional data has modified the downward slope to be declining at approximately – 90%, annualized.
From a fundamental standpoint, the data set is enormous on the events of the past three years.
At some point that data could provide a huge tailwind for downside action.
For now however, let’s stick with what price action is telling us and go to the Summary & Strategy
Summary & Strategy
The past week has identified two areas of position or trade execution and two areas for possible short-term options execution (not advice, not a recommendation):
Position or Trade: Real Estate IYR, and Biotech SPBIO
Options: Carmax KMX, and Moderna MRNA
As a reminder, most if not all trade analysis is for the short side (not advice, not a recommendation).
Final Thoughts
Since we have possibly the largest bull trap in market history with huge numbers of VIX Call options, the following week may be subdued by going modestly up, sideways or down, slowly.
With that said, options positioning (if any) could be slated for the week of 2/17/23.
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.
Back in October last year, the update on CarMax, said this:
“… there could be small blip up to resistance in the 85-area before potentially rolling over into a descent that projects to the 4.00, level.
If and when that happens, CarMax rival Carvana, may be long gone; its disruptive vending machines possibly being used as homeless shelters or insect farms.”
Even with the short-squeeze mania last week, rival Carvana, remains down a blistering – 96.2%, from its all-time highs; having reached an interim low of – 99.1%, in December.
Insect farms, dead-ahead. 🙂
The ‘Bounce’
So, does getting to a high of KMX 80.92, meet the forecast of “the 85-area” ?
It looks close enough, but the real story is the bearish trade set-up.
I’ve lost track of the number of Wyckoff ‘Spring to Up-Thrust’, set-ups that have been covered since this post, over sixteen months ago; we now have another.
CarMax KMX, Weekly
Unmarked chart.
Long time users should be able to spot the set-up immediately.
For those new to the site or if more clarification is needed, here it is:
Getting down to the daily, is where a trading plan is created.
KMX, Daily
Several scenarios.
Three potential scenarios are below.
Remember, we’re in possibly the largest bull-trap in market history.
Those in control of the markets need to bleed-off the VIX Call options values by having the market go up, sideways, or down slowly (at first).
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.
‘Some of the best market traders are former Marines.’, Prechter
That’s a paraphrased quote from Robert Prechter Jr., given during an interview in the early 1990s.
The inference: Marines succeed at trading because they have been conditioned to endure and perform while being in pain … physical and mental.
On the other hand, the financial press, being ever so helpful during this unprecedented collapse, is all too happy to help analyze the situation by catastrophizing on how ‘painful’ the market feels.
If we go to Jerimiah Babe at time stamp 1:36, the mainstream press is still touting ‘The consumer is strong’.
In other videos, Babe, has shown how devastated the real estate market really is … ‘boots on the ground’ reports at vacant malls, empty parking lots and new (unoccupied) housing developments that stretch for miles.
With that backdrop, let’s look at what the price action of real estate is telling us … is the consumer strong?
Real Estate IYR, Weekly
There are so many things happening in IYR, it will probably take several updates.
At this point, price action exhibits the following:
Currently in Wyckoff ‘Up-Thrust’ condition, potential reversal
On a close basis, IYR has retraced 38.2% of its entire move.
Repeating trend line(s) underside test.
Trading channel that’s a Fibonacci 34 (-1) weeks wide.
For the week just ended, Force Index is divergent (54.7%, weaker) than the last push higher.
We’ll look at the first three of those, below.
As the market came to a close on Friday, price action pushed through established resistance (and axis line) to end the week higher.
Price action’s in Up-Thrust condition, The Danger Point®
Next, we have on a close basis, a Fibonacci 38.2% retrace as well as testing the underside of a resistance/trend-line.
In the next update, we’ll discuss the possible trading channel and the pressures (Force Index) behind the last move higher.
There Will Be Great ‘Wringing Of Hands’
As always, anything can happen in the markets. The above is not advice or a recommendation.
Next week, we can expect the Usual Suspects to come out and provide their ‘expert analysis’ on what the Fed is likely to do or not.
The Fed on the other hand, has repeatedly said what’s it’s going to do; that is, raise rates.
Interest rate sensitive real estate already appears ready for reversal.
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.
Monday was Fibonacci ‘Day 13’ from the January 4th, XOP, lows.
With about fifteen-minutes before the open, pre-market action in the XOP leveraged inverse fund DRIP, is trading slightly higher at 12.67.
So, was yesterday the day? Has XOP topped-out and now in the process of reversal?
As always with the markets, the price action itself, will show us the truth.
However, what can be stated with some confidence, is that we’re at a low-risk point for going short (not advice, not a recommendation).
‘Low-risk’, does NOT mean ‘no-risk’
XOP, New Low or New High
It’s somewhat straightforward at this point.
If XOP, posts a new daily low, it increases the probability of reversal. If it posts a new daily high, then price action is possibly on to new all-time highs.
Oil & Gas XOP, Daily Close
The daily chart shows the labored six weeks of rounded top that’s identified as ‘Up-Thrust’.
At present, XOP is testing the underside of that Up-Thrust.
The zoom version of the chart shows the amount of upside effort expended during the rounded top.
Price action spent over a month attempting to move higher, only to collapse into a downside reversal.
Now, we can see that wide price action area is being tested; not unlike the Newmont test as described 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.
In chess, most (if not all) opens and responses have a name:
‘Danish Gambit’
‘Cochrane Gambit’
‘Petrov Defense’
‘Scotch Game’
‘King’s Gambit’
It’s been nearly one year, since discussing a potential corn trading strategy; during that time, the strategy remains in effect (not advice, not a recommendation).
We’re still waiting for a chess move from the ‘other side’.
Keeping in concert with traditional opening moves as named above, we’re going to name our set-up as follows:
‘Potato Head Gambit’
That is, an ‘administrative’ move which temporally puts the corn futures market into chaos. A move similar to Carter’s grain embargo of the 1980s.
The weekly chart of tracking fund CORN, shows us something’s about to happen.
Either we get a breakout … or breakdown.
Teucrium Corn Fund, CORN, Weekly
The ‘Derecho‘ is marked as it was the kickoff to the current structure.
A wedge has formed.
A breakdown puts CORN, at a measured move in the vicinity of 18.0; a breakout to the upside, measures approximately to 38.0.
From a trading perspective, a breakdown is preferred.
Price action pushing lower to the 18-area, puts CORN below well established (support) lows of 2021.
A penetration of those lows would (potentially) put CORN in Wyckoff Spring Position.
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.
