Biotech Short: Technical Discussion

September 27, 2020 By in Biotech, BIS, IBB

Short out, short in. That was the trade action for Friday, the 25th.

The pre-market update hinted price action would rise; taking out stop orders at the area shown.  IBB did just that and more.

Early in the session, within about thirty minutes it was obvious that we’re moving higher. The BIS position was exited at 33.10.

Profit on the short, held for ten days was about 6.5%.

Price action continued to rise throughout the day. Late in the session, the short was re-established via another position in BIS.

Not expected, was that IBB continued to move higher into the close of the day. 

BIS moved correspondingly lower.

The position is showing a slight loss of -1.5%.  This amount is well within risk parameters but does require that IBB opens lower and moves lower at the next session.

The chart, with an expandable version here, shows we’re at the top edge of an established trading channel. 

Force Index, upward thrust energy has declined while at the same time price action finished the day right at the axis line shown.

There’s also a Fibonacci time sequence as noted.

The expectation is for a lower open and lower action during Monday’s session.

If price action opens higher, the short-covering scenario as identified in this update, is not in effect; the short position will be closed.

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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.

Amgen At The Edge

September 26, 2020 By in AMGN, Biotech, BIS, IBB 2 Comments

The market itself has decided the lower wedge-line is important.

Price action penetrated, then recovered, penetrated again and is now testing the underside.

This oscillation about the line validates its existence and confirms its importance.

AMGN is at the danger point.  Price action can go either way.

Higher, and the wedge has been negated.  Lower and we may have a strategic, long-term reversal.

Separately, the short position via BIS at the trader’s discretion was exited early during Friday’s session.

When it’s obvious, we did not wait around for the stop.

The total profit on the short, held for just ten days, was about four-weeks pay for the typical American worker.

Why list it in those terms? 

With at least 30% of the population out of work and no job in sight, would it not make sense to show how proper research, experience and training may replace some of the lost income?

Getting back to the biotech short position; Later in the session, as IBB was rising, BIS declining, the short was re-established.

More on that entry is planned for tomorrow’s discussion.

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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.

June 5th, 2008.

September 26, 2020 By in DIA, Dow 30, S&P 500, SPY

That was the day where the bear market began in earnest.  After that day, it never looked back. 

The final posted low was 666, on March 6th. 

Let that sink in for a while:   Six-six-six, on the sixth.  There is much more going on than the general public realizes.

We wrestle not with flesh and blood …

Getting back to that day on June 5th, those old enough will remember the market had been trending lower for about three weeks.

Then, on Thursday the fifth, there was a huge rally.  The S&P moved up over 2% on the day.

This rally as it turned out was just short covering.  The next day, price opened gap-lower and moved swiftly lower to new daily lows.

The move down was about -3.5% on the day.  There was no denying at that point, it’s a bear market, potentially a crash (which it was).

Is that same scenario what just happened today, Friday?

Looking at the analysis that Sajad put out on August 15th   He showed “there’s one final move to go”: Time stamp, 5:20

His quote is shown on the chart.  Indeed, the Dow 30, the DIA, had one more move to go before reversal.

If the coming Monday, opens gap lower and posts a new daily low, the market is performing in a way that’s similar to June 5th of 2008.

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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, Short Stop

September 25, 2020 By in Biotech, BIS, IBB 2 Comments

It’s about 20-minutes before the open.

For those monitoring the short trade in biotech (IBB), the stop has been moved (not advice, not a recommendation) to the area around IBB, 133.11.

This is the middle of the trading range from September 23rd.

There may be orders hiding right around IBB 132.00 – 132.40 and the market could attempt to search these out.

We’ll see.

Annotated chart below:

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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.

Amgen: Strategic Reversal

September 24, 2020 By in AMGN, Biotech, IBB 1 Comment

Amgen (AMGN) was covered in the last update as having a wedge breakout to the downside. 

Price action then promptly reversed back into the wedge, giving the equity a new lease on life.

At least, that’s the way it looked at the time.

If we pull out to one time frame higher … the weekly, and look at AMGN, the reversal set-up and possible channel(s) are clear.

The terminating, rising wedge is there.  However, we can see several trend-line symmetries.

Taking the solid blue trend-line (right side) and bringing it backward (dashed lines), sometimes referred to as “reverse trend-line”, there’s symmetry in the AMGN set-up.

We may be witnessing the strategic reversal of AMGN which has already developed a massive trading channel.

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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.

Dow 30: Measured Move

September 24, 2020 By in DIA, Dow 30, DXD

It’s thirty-minutes before the open. Dow tracking ETF, DIA is trading lower about one-point or -0.43%.

The inverted chart of DIA, has a wedge breakout.

Using traditional techniques for a ‘measured move’, we can project to the 235-area for DIA.

When and if that happens, the Dow will have pushed below significant sepport levels that would then become resistance.

Inverse fund typically used for the downside (not advice, not a recommendation) would be DXD at 2X Inverse.

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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.

Trending: Biotech

September 24, 2020 By in Biotech, BIS, Gold & Silver, IBB, SLV

Today’s action may be in a trading channel.

It’s a Fibonacci eight days from the low of September 4th, to the top on the 16th.

That time correlation, along with the channel hits, help to provide validity to the set-up.

Our short position in the sector has not changed appreciably.  There was a slight backing off yesterday, by reducing the size about one-percent.

However, during today’s action as IBB was making intraday highs (BIS making lows), the short position was increased, via BIS.

In any event, we have a hard stop at the day’s high, IBB 134.85, which is approximately 31.46, on BIS:  Not financial advice, not a recommendation.

As of this post, 7:00 p.m., EST, the S&P 500 futures are trading down about -0.50%, giving the inference that downside action will continue at the next session.

Silver futures have dropped another 4.5% – 5%. Price action’s heading straight down.  Nearest chart support for the SIZ20 (December) contract is around 20.00.

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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.

Silver Freak-Out

September 23, 2020 By in Gold & Silver, SLV 1 Comment

It’s all starting to sound like the global warming scam. 

‘It’s only ten years before all the ice caps will be melted’.  Problem is, it’s only been ten years for at least 40-years!

Note:  For a total evisceration of the AGW narrative (or hoax), Tony Heller has done an excellent job.

Which brings us to silver and the boogeyman of ‘hyperinflation’s just around the corner’.  It could be the latest false narrative that’s not panning out.

At some point, the dollar will go to zero.  That’s well understood by anyone with a modest amount of financial knowledge.

It’s what happens before that; that’s what’s important.

Even J. Bravo, is starting to think it may not be a slam dunk to dollar zero.  He had a guest on a while back that got howls of disapproval with his deflation (first) assessment.

Not saying the premise is right.  Just saying when there’s that much of a consensus (hyperinflation), it has a nasty habit of not coming to fruition.

As always, anything can happen.  We could get hit with a solar flare or a massive volcanic eruption throwing everything out of balance.

Matter of fact, both of those are highly likely right along with a near earth miss, asteroid passing within 13,000 miles … tomorrow.

In the meantime, we’ll focus on typical market behavior.

The last update stated:  “Barring any additional upside, the expectation is for price action to retrace and test the wide, high volume chart areas.”

Fast forward to now.  There was just one more blip higher before silver began its correction in earnest.  This is normal and expected market behavior. 

The chart shows there’s potential to go all the way back to support levels at the 17-area.

However, it’s also possible we’ve seen a top and silver’s headed to new lows (time stamp 3:10); That’s completely opposite the consensus and potentially a more likely result.

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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.

Amgen (AMGN) Forecast

September 21, 2020 By in AMGN, Biotech, IBB 1 Comment

Now that AMGN is breaking lower, let’s take a look at how far down it could go.

The chart shows the terminating wedge pattern.  Depending on where the wedge entry is measured, slightly different projections will result.

A fairly conservative estimate is shown.

If we do not get some kind of recovery back into the wedge itself, a measured move projects to the 185-area.

A potential downside breakout was highlighted yesterday. The press as typical, appears surprised by the markets opening lower, continuing lower.

Doing what they do (fabricate a ‘reason’), AMGN’s decline seems to be a political problem … even though its been in a topping formation for years with ever slowing upward trend.

No matter, it’s all about healthcare uncertainty.  Tomorrow it may be all about something else. 

Wyckoff said over a century ago, the financial press was essentially useless at best and intentionally deceptive at worst.

A hundred years later, not much has changed.

Wyckoff analysis is one of the best kept secrets on Wall St.  We’ve been using it to spot market opportunities since 2008.  Find out more about Wyckoff analysis here.

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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.

Upside Breakout Ready

September 20, 2020 By in AMGN, Biotech 1 Comment

The chart below has a bullish wedge.

Price action’s at the wedge top.

This is how it looks just before an up-side breakout.  Of course we’re dealing with probabilities and the pattern could morph into something else.

However, at this juncture it looks about to move … higher.

The problem is and you may have already noticed, the chart does not look quite right.  Why is price action at the bottom and volume at the top?

It’s inverted … turned up-side down.

We’re looking at Amgen (AMGN), inverted.

Inverting the chart is an old trading technique that’s used to remove analysis bias in one direction or other. 

If a chart looks like a buy (or sell) no matter which way you turn it, there’s a problem … a significant trader’s bias that blinds one to the potential.

Amgen is the largest component in the biotech (IBB) sector. The coming week, may support or negate the breakout potential.

An expandable version of the chart above is here.

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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.