As biotech XBI, nears support levels (charts forthcoming), all short trades have been closed in the pre-market session (not advice, not a recommendation).
Trade LABD-25-06, was closed just after 7:00 a.m., EST with a profit slightly above +27%.
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.
Early yesterday, biotech XBI, got stretched into an apparent squeeze.
That squeeze printed a high at 75.86, which as of this post (10:43 a.m., EST) is holding.
The chart shows what’s technically called ‘inside action’ or an ‘inside bar’. Today’s trading is taking place within the range of yesterday’s bar.
Biotech XBI, 4-Hour
There’s a lot going on.
The expectation was for this morning’s open to post above yesterday’s high; it didn’t happen.
As of this release, price action remains tight, not pushing significantly higher or lower.
Tight action typically precedes a directional move.
Positioning
With the above conditions in play, a short has been re-established (LABD-25-06) with a very tight stop … one, or two ticks, above yesterday’s XBI, high. (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.
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.
You can’t make this up. Those two headlines (above) were one after another on ZeroHedge.
That’s probably enough. You get the idea. 🙂
In the case of Carvana, let’s look at what the price action is telling us is the most likely event.
Carvana, CVNA, Daily
After-Hours on April 2nd, trading posted briefly at 243.6, within the purple oval, creating an ‘Up-Thrust’.
Last Friday’s action penetrated support and is holding.
Note the price range of that day’s bar is less than Thursday’s, with volume slightly larger.
For now, CVNA, has stopped dead at support.
There may be follow-through on Monday, but with the (YouTube) crowd and others expecting a ‘crash’, that makes is less likely (not advice, not a recommendation).
When a real expert warns of a crash, it may look something like this (time stamp 6:42).
Note the condescension from the other panel member.
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.
There are sure to be plenty of post-mortems over the weekend; usual suspects giving us their assessment on what’s already happened. 🙂
Sometimes the question, is not ‘what’s happened’, but ‘what has not happened’.
That’s where the opportunity may lie.
Market Implosion
Over the past week, there were wide price bars, with action unstable in all major indices (ETFs): DIA, IBB, IWM, IYM, IYR, QQQ, SOXX, SPBIO, SPY, XLF, and XOP.
However, what did not implode (completely), are the car dealerships; specifically, CarMax and Carvana.
For this update, we’ll look at CarMax.
CarMax, KMX, Weekly Close
On a close basis, KMX, has bounced off the lower wedge boundary and is near the resistance area (magenta line).
Price action could be positively biased in the coming week as a result of ‘tax refund’ car buying (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.
The biotech short LABD-25-05, has been closed: Profit on the main position is +61.25% (not advice, not a recommendation).
While the market is hysterical, price action in XBI, indicates the current down move is losing (some) energy, hence the reason for the exit.
Biotech XBI, Daily
Exit was made at the lower channel line (demand line) contact.
The market could certainly continue lower from here.
However, from past experience and watching huge profits erode to only mediocre results, the same mistake is not being presented here (not advice, not a recommendation).
Meanwhile, the gold miners don’t look like the safe haven everybody thought they were.
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.
Those on this site daily, knew something was about to happen in a big way.
It was just, when.
Now, markets are volatile if not imploding.
Nearly all sectors reversing at once.
As of this post (10:55 a.m., EST), some of those are attempting to recover (GDX, GDXJ, SILJ) with others down hard (not advice, not a recommendation).
There were plenty of clues:
Massive volume increase in GLL, strange activity in biotech, then resignation at the FDA, failure of NVDA to get back to a 50% retrace, the list goes on.
As mentioned yesterday, one sector that’s continuing lower is biotech, XBI.
Biotech XBI, Daily
There may be several trading channels in effect. Only the most aggressive (so far) is shown.
Note the locations of short positioning via LABD (not advice, not a recommendation).
As of this post, the initial LABD short, entered on March 25th, is up over +40%.
Going Forward
So, what happens now?
For this trade, Livermore said it best (paraphrasing):
Position on the right side of the market (the correct direction), then wait.
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.
That’s two times in a row, Carvana hit a target area (presented on this site) in the after-hours session.
The last time was here, CVNA printed 310, in the after-hours on February 19th.
Then, just hours ago, price action thrust higher into the zone in this post, printed at 243.6, then collapsed.
We never got to ‘Day 34’.
However, the real story may be in biotech XBI, with huge swings in both directions; currently (as of 6:35 p.m., EST) trading below today’s regular session 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.
If the trendline is in-effect, meaning the market’s hanging in mid-air in a false breakout, getting back into that trend may result in some dramatic downside action.
Well, we got the dramatic downside.
Biotech XBI, collapsed nearly -11%, and 3X Inverse Fund LABD, is up +38%, and climbing.
As Wyckoff said a century ago:
‘Someone always knows something … and that ‘something’, shows up on the tape.’
It turns out in this case, showing up on the tape, was this, and this.
Biotech XBI, Daily
The chart from the week-ago post, has been updated.
As is typical, the ‘reason’ for last week’s price action comes out later, after the fact.
Positioning
At this point, trade LABD-25-05, is being maintained (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.
Sometimes, the question is not ‘what’s happening’, but ‘what’s not happening’.
In today’s case, we have gold (GLD) at new highs and the miners, not.
Not only are they not following gold higher, for the Juniors GDXJ, and the ‘Silvers’ SILJ, they both posted a new weekly low.
Junior Miners, GDXJ, Daily
Last Friday was a reversal bar.
Today (so far) we have gold at new all-time highs and the miners lagging (not advice, not a recommendation).
As of this post (12:54 p.m., EST), GDXJ, has moved up to test Friday’s low.
While price action retraces to test, it’s closing the gap on the amount of risk for a short position.
With that in mind, a direct short of GDXJ, has been opened (GDXJ-25-01) with the stop at (or to be) the session high (not advice, not a recommendation).
Note: As a result of the gold hysteria, YouTube grifting, book writing, podcast interviews, dollar collapse, and ‘It’s all coming down’ mania, instant gratification on this position is not expected. 🙂
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® 