Category Archives: XBI

Frog In The Pot … Biotech

March 15, 2024 By in $SPSIBI, Biotech, GDXJ, LABD, SPBIO, XBI 2 Comments

Turning Up The Heat

It’s all quiet on the biotech front but for those paying attention, the temperature’s rising.

XBI (sector ETF), penetrated support and is now testing that breakdown.

At this juncture, anything can happen. A new lease on life, and we get a reversal higher.

However, probabilities argue against that scenario; multiple posts, here, here, here and here, present the case for significant downside (not advice, not a recommendation).

Going to the price action, we’ll use a 3-Day chart.

Biotech XBI, 3-Day

You might ask, ‘Who uses a 3-Day chart?’, ‘I don’t know anyone that does.’

Well, this may be the only place and that’s the point. 🙂

The 3-Day, for this market, at this juncture, shows support/resistance areas more clearly.

Notice on the current bar how the close (as of 3:15 p.m., EST) is below resistance, the blue line.

Then, look how the prior bar closed above the resistance area. The attempt to test this area (resistance breakout) and make it support has failed (thus far).

As a reminder, it’s the failed moves that get the attention of The Street.

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

Gold Miners … Trap Set?

March 13, 2024 By in $SPSIBI, Biotech, Bonds, GDX, GDXJ, Gold & Silver, Gold Miners, IWM, Life Insurance, MET, NVDA, SOXX, SPBIO, TLT, Wyckoff, XBI 4 Comments

Is The Fear Exhausted?

It’s a confusing time.

Semiconductors with chief cook and bottle washer Nvidia, seem to be reversing. Other sectors like biotech and mid-caps were never part of the mania.

Add to that, biotech and life insurance may be correlated (more on that, in another update).

As the market looks to pivot lower, bonds are also pivoting lower or at least under pressure.

In response, one can say there’s been sort of a panic into the mining sector GDX, GDXJ; like it’s somehow more safe there.

Let’s see if the miners really are the safe-space.

Junior Miners GDXJ, Daily

As the chart shows (as of 12:35 p.m., EST), we’re pushing into known resistance (blue line) at the 37.00, area.

There’s also a Fibonacci time frame. Today is ‘Day 55’, from the December 22nd high.

Not only are we at Day 55 from the 12/22/23 high, but we’re also at Day 21, from the February 13th, lows.

Essentially, GDXJ is about to post a Wyckoff up-thrust condition, the area for potential downside reversal.

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 Ready … For Reversal

March 10, 2024 By in $SPSIBI, Biotech, CAT, LABD, NVDA, SPBIO, Spring-to-Up-Thrust, Wyckoff, XBI 3 Comments

The Set-Up, Two-Years Wide

It seems like it’s been forever.

Shown in the chart, Biotech XBI, may be set-up for potential, sustained downside.

This post from August of 2021, describes what we’re looking for; a repeating action, possibly as old as the market itself.

It’s important to note, ‘set-up’, is not, success.

‘Set-Up’, Means: Conditions have presented themselves, lending to high probability outcome (not advice, not a recommendation).

Biotech XBI, Weekly Close

Looking at the example with CAT (above link), and comparing it to the chart below, it’s similar except for the timeframe; XBI, is much longer.

Of course, downside action in CAT, reversing back to support, has yet to materialize with XBI.

That’s the point, it’s the unknown; The Danger Point®, where the risk of being wrong is least.

There’s nothing wrong with being wrong, i.e., quickly exiting a losing trade. It’s being wrong and staying wrong, that’s the problem. 🙂

The Nvidia Connection

This past Friday had wild trading action and volume in Nvidia, NVDA.

It posted a wide outside-down day, ranging over 108 points with heavy volume, 113.6-million.

The net result may be the end of the A.I. bubble; potential downside for it, and the rest of the markets (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

Real ‘Opportunities’ Are Rare

March 4, 2024 By in $SPSIBI, Biotech, LABD, Loeb, SPBIO, XBI 1 Comment

When One Is Found …

… It must be used to it’s maximum extent’.

A paraphrased quote from late Gerald M. Loeb, Vice Chairman of E.F. Hutton, Author of: The Battle for Investment Survival.

Here … Now?

Is that where we are with biotech, XBI?

Obviously, the answer won’t be known until it’s all over.

What we do have, is a potential reversal in the making that could be of significance.

No New Highs

At the open today, XBI immediately began to post lower.

It did so without exceeding the prior recovery high set three trading days earlier on February 28th.

Biotech XBI, Daily

The daily chart shows just how close XBI is to a 38.2% retrace. A bigger picture view of that retrace is in the prior update, link here.

It’s obvious we’re still at The Danger Point® where anything can happen.

However, price action tells us, it’s struggling at this area.

A decisive break lower would likely signal a top and significant reversal (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

At The Edge … Biotech

March 3, 2024 By in $SPSIBI, Biotech, IBB, LABD, SOXX, SPBIO, The Maverick of Wall Street, Wyckoff, XBI 2 Comments

Amidst The Confusion, The Biotech Set-Up

Let’s remind ourselves with a paraphrased quote, long ago:

‘Until you can completely ignore the financial press and focus strictly on price action, you will never be successful in the markets.’

Richard D. Wyckoff, circa 1934

New Highs … Except

It’s new highs for the AI insanity; all the while, CEOs and other insiders are cashing out, as reported by The Maverick, and J. Bravo.

Notably absent from this drunken cyber-bash are biotech IBB, and XBI.

Fibonacci Retrace Compete?

Both indexes (ETFs) posted a Fibonacci retrace (from 2021 highs), doing it simultaneously; IBB at 50% and XBI at 38%.

Potential reversal of XBI, link here.

We have below, even more (technical) weight for XBI pivot from up-to-down (not advice, not a recommendation).

Biotech XBI, 3-Day

Attempted breakout above resistance (magenta line) puts XBI, at The Danger Point®

Price action’s hovering above resistance while at the same time posting climactic volume.

Note that it’s just touching the underside of the 38.2% retrace level (blue line).

The last time we had a similar volume climax was the pivot point from down-to-up, in early May of 2022.

Does that mean the current volume spike signals a (potential) reversal from up-to-down?

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 (XBI), ‘Changing Hands’ ?

February 28, 2024 By in $SPSIBI, Biotech, LABD, SPBIO, XBI 1 Comment

Historic Volume, Short-Side

Yesterday’s down-draft in biotech leveraged inverse LABD, had the largest volume in the ETF’s history.

It’s possible, we just witnessed a ‘changing of hands’; from weak to strong.

Conversely, the biotech index XBI, may have reached or be near a long-term reversal (not advice, not a recommendation).

XBI, fundamentals as usual, are horrific; the (current) top-ten components, comprising over 18% of this index, are at mind-numbing ‘valuations’.

Of those ten, none have a yield and nine have no P/E at all; the one that does (KRYS), has a P/E, close to 1,900 (BigCharts).

Which brings us to the chart.

Biotech 3X Leveraged Inverse LABD, Daily

Unprecedented volume; potential ‘changing of hands’.

As always, anything can happen.

As of this post (11:30 a.m., EST) the inverse LABD is only slightly off its lows (XBI, off its highs).

If there’s to be a sustainable reversal, it could take some time to materialize (not advice, not a recommendation).

Either way, LABD volume is telling us to watch closely.

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 “Bottled Air”

January 31, 2024 By in $SPSIBI, Biotech, DHI, Federal Reserve, LABD, SPBIO, Uneducated Economist, XBI

Nothing (or not much) Holding It Up

We’re still a few hours away from the Fed announcement and it’s already high anxiety in the market.

D.R., Horton (DHI) has retraced about 38% of its move and is testing the underside of breakdown resistance.

Over on the ‘Little, or no P/E’ side of the market, biotech XBI is coiling, building (downside) potential in its own on-going reversal.

Biotech XBI, Daily

The last update on biotech XBI (link here), said to watch for a false breakout.

The chart shows the result. The breakout did not last; we’re congesting just below resistance (blue line).

The latest post from Uneducated Economist talks about the potential for lower rates, i.e., probabilities are low.

Incorporating that possibility into the above analysis, it suggests the XBI move from last November to the end of December, is essentially built on “bottled air” (not advice, not a recommendation).

The retail side of the market appears to be positioned long, expecting lower rates.

What happens if that does not happen?

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.

Biotech Squeeze … Terminal ?

January 10, 2024 By in $SPSIBI, Biotech, Federal Reserve, LABD, SPBIO, XBI 1 Comment

At The Extreme

Has the biotech squeeze been stretched to its limits?

The daily chart of XBI, shows we’re at an extreme, MACD is flat, crossing below the signal line, second time in the past five trading days, and price action is at well-established resistance.

Still Waiting

What has not happened, is printing a new daily low.

As of this post (11:30 a.m., EST), XBI is trading just above yesterday’s low of 92.00.

Biotech XBI, Daily

At 3:15 p.m., EST, New York Fed president John Williams is due to speak.

It may or may not be a catalyst for what happens next.

However, it still remains to be seen if there are any rate cuts on the horizon. So far, none.

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

Blow-Up or Breakout … Biotech

December 27, 2023 By in $SPSIBI, Biotech, LABD, SPBIO, XBI

The XBI, P&F Count

Biotech XBI, is now at the point where any substantial move upward, results in a ‘change of character’, the market would then be sub-dividing higher.

The Point & Figure (P&F) chart shows and interesting characteristic; each prior correction higher, reached a maximum that’s just one box (approx. 2-pts) below the prior peak.

That’s where we are now.

Biotech XBI, P&F

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

Think Like A ‘Criminal’

December 22, 2023 By in $SPSIBI, Biotech, LABD, Neil McCoy-Ward, SPBIO, Wyckoff, XBI 1 Comment

How The Game Is Played

Watch the video linked here, to see how veteran trader Richie Naso describes trading false breakouts and breakdowns, showing how to position in the markets.

What he’s in effect describing is a Wyckoff Up-Thrust (false breakout) and a Wyckoff Spring (false breakdown).

Then he adds, you have to ‘think like a criminal’ to really understand who is doing what, to whom.

Note: No mention of the Fed, corporate earnings or any other ‘funny-mentals’ as Ed Seykota likes to call them.

Inflation Takes A Holiday

Not for long though.

Neil McCoy-Ward at this link, describes how inflation is coming back (time stamp 21:00).

The Imaginary Friend

We’ve had the markets launch on ‘Imaginary Rate Cuts’ as Uneducated Economist calls them, while in the background, more inflation (i.e., supply destruction) is in the works.

Which brings us to biotech and specifically, SPBIO, $SPSIBI, and XBI.

Biotech XBI, Daily

We may have just had the largest market fake-out (up-move) in history; time will tell.

With all of that manipulation, price action (for biotech, at least) has come back to near prior peaks … but not above.

As this post is being created (3:05 p.m., EST), XBI is starting to back off its intra-day highs.

Internalize It

Referring back to Undedicated Economist, the comment sections of his videos have the usual ‘So, what do I do?’.

His response is a good one. 

He says to ‘internalize’ the message he’s presenting. For example, in this case, it’s possibly the biggest market fake-out in history. Then he says you will ‘intuitively’ know what to do (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