Here’s the latest news (as of 2:03 p.m., EST), link here.
Note, the article says the shares ‘tumbled’ … hardly, it’s a crash … take a look at the chart, link here.
The life insurance sector, and more specifically Globe Life (GL) along with Met Life (MET), have been on the watch list for reasons discussed many times on this site.
The Biotech Link
Possibly related (correlated) to the life insurance industry is biotech.
We’ll discuss that sector, XBI, in an upcoming update. The synopsis is that XBI could make a brief new daily high today (or at the open tomorrow).
If so, it could put the sector in a minor up-thrust position, while still in an overall down trend.
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’s been beat up and down so much, you can lose track of what’s really happening.
Include the financial media side-show, and it’s a recipe for confusion and delay.
In the case of biotech XBI, it had a ‘change of character’ on March 21st, then morphed into a trading channel.
Now, it looks like it has a Fibonacci time correlation.
It all sounds complicated, so let’s take a look.
Biotech XBI, Daily
The original change of character, identified in this post.
Yesterday, Tuesday, was Fibonacci Day 13, from the point where the ‘change’ was noted.
It appears, the market used Tuesday, to post the right side (supply side) of the current trading channel.
Of course, there have been no ‘confirming’ hits on that right side so far; we just have one data point.
As the action unfolds, the key is to look for the market to adhere to the channel or tell us that something else is happening (not advice, not a recommendation).
Sorry, No Rate Cuts
That’s news to some.
On this site, it’s been a working premise for over a year.
Remember, back then, it was called ‘The Pivot’:
“Like ‘bread and circuses’, the ‘pivot’ discussion is a distraction … keeping the proletariat placated.”
Now, the man behind the curtain has been exposed, here and here, it may get very dangerous … as if it’s not already.
This post is being released (12:52 p.m., EST) before the Fed minutes. No telling what kind of volatility may, or may not, ensue from there.
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.
Way back in 2001, it was all bearish on the gold front as well; lows were around $254/oz. – $255/oz.
How did that work out?
No, Nat-gas is not gold but at this point, it’s possibly just as ignored as gold was, then.
The strategy or potential reasons for a rally in Nat-gas, have already been addressed here and here.
So, we’ll cut to the chase, looking at the proxy, UNG.
Natural Gas, UNG, Daily
It’s possible, the March 27th, penetration of support (covered here) and subsequent recovery, is a Wyckoff spring set-up (not advice, not a recommendation).
If we’re in a spring with the wedge in-effect, meaning, the market’s not going to morph into another structure, then it’s likely, Friday’s action was a test of both the spring and the wedge (breakout).
Supporting the ‘test’ scenario, we have Friday’s action pulling back to the lows; volume contracts by over 37%, when compared to the day prior, Thursday.
Of course, this is all very nuanced action and can be blown away at the next session.
However, as with our gold example, no one was looking for a major, long-term reversal at the time.
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.
Yesterday, biotech (XBI) had the chance to reverse off Wednesday’s lows, continue higher into an upside move, a Wyckoff spring.
It didn’t happen.
The move failed spectacularly.
The ‘Street’ pays attention to such failed moves. Thus far, unless there’s some kind of massive demand, biotech XBI, has penetrated and tested support, now resistance, and is moving lower.
Strategy First
Recall, the work was done (three weeks ago) indicating high probability of a long-term reversal in this sector.
Adding some entertainment with the Fed is, or the Fed isn’t (going to cut rates). How about the Fed never was. 🙂
Until proven otherwise, we’re in a high, and higher, interest rate environment.
Biotech XBI, 4-Hour
Moving closer-in on the chart, the 4-Hour.
As we can see, on March 21st, XBI had a change of character.
Price action was relatively ordered and well behaved but then became more volatile on the 21st; it all fell apart, declining sharply on April 2nd.
At the point where the ‘change’ is noted, it also looks like XBI, began to form its (current) trading channel.
P&F Projection
If XBI, continues its decline, where’s it going?
What’s a likely target?
There are several methods that can be used; Fibonacci projection, measured move, and P&F to name a few.
A basic P&F projection is shown below:
What’s shown is the maximum projection range (not advice, not a recommendation).
As this post is being created (11:52 a.m., EST), XBI continues to grind its way higher in what’s likely a move to test resistance in the 90.50 – 90.60, area.
For the breakdown to be negated, we would need to see a decisive upside penetration of the right-side channel line.
It’s close but so far, price action is within ‘normal’ correction boundaries.
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’s been something wrong with the precious metal’s, gold and silver, for years.
Gold and silver used to move essentially in tandem, over the long term; not anymore.
This link shows there’s a huge divergence in the correlation between the two metals. Gold has launched higher, while silver has lagged.
Right around June of 2020, the correlation began to break down. What else was going on (or being ‘rolled out’) around June of 2020?
Recall, silver’s primarily an industrial metal; affected much more (than gold) by manufacturing demand.
Strategy First
Shown by the market itself, direct correlation between silver and gold no longer applies (or has somehow changed into a new construct), silver’s not confirming the ‘inflation’ shtick, possibly influenced more by industrial demand.
Thus, we have the following.
Silver SLV, Weekly
Just listening to what the market’s telling us, it says, when SLV, reaches a top and inflection point (to reverse lower), it tends to print heavy upside volume bar(s).
Looking at the chart, price action’s all over the place. Wide bars, volume spikes, the gamut.
Markets like this are unstable and usually can’t mount a sustained move in either direction.
Typically, if there’s going to be a breakout (or breakdown), price action tends to get tight, or get itself into a ‘coil’.
Even so, we need to account for the market itself.
Having traded silver futures contracts during the last run up and meltdown from 2011 – 2014, the silver market is thin and likes to ‘spike’.
That (spike) behavior is confirmed by Ed Seykota in Market Wizards and David Wies in his (formerly) daily market updates.
We may be at the beginning of a set-up for a Wyckoff up-thrust (above resistance) and then reversal.
A possible measured move for SLV (to be covered in another update), puts the tracking ETF, right around 25.60, about 2-pts. from where we are now (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.
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.
“What we’re looking for here, is some kind of Jimmy Carter type stunt where corn exports are halted in the name of ‘national security’ or some such thing.”
Corn Tracking Fund CORN, Weekly
Two Fibonacci projections are overlaid on the chart.
First, a simple retrace starting near ‘Derecho’ lows, to highs set during the week of April 29th, 2022.
Second, a counter-trend projection from those highs to the intermediate lows set during week of May 19th, 2023 and highs of June 23rd, week, the same year.
CORN has retraced 61.8%, which is also the 1:1 counter-trend projection. In addition, it’s the measured move from the wedge break.
The market has effectively confirmed the support area.
Oil Goes Negative … And Corn?
Remember that ‘anything can happen’. Oil futures made history by going negative.
We’re in a new construct, a new paradigm, our strategy should match accordingly.
Everyone has their own perspective and plan for the markets; fair enough.
From here, CORN could continue to new, all-time highs.
However, for my accounts, I’ll wait until such time it appears the downside risk is removed as much as possible.
One potential area for that ‘removal’ is the 76.4%, retrace in the vicinity of CORN @ 16 (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.
If it’s not behaving as expected, then it’s obviously doing something else.
In the case of biotech XBI, that something else, may be working its way to the next set-up.
Strategy First
Until price action proves otherwise, the overall long term reversal assessment of the sector has not changed (not advice, not a recommendation).
We’ve had a potential long-term up-thrust (reversal) that’s been covered here, and here.
That second link contains a 3-Day chart analysis.
Looking at the current price action and having it dictate what chart to use, we’ll switch to a 2-Day, which shows the potential more clearly.
Biotech XBI, 2-Day
The sector has failed to break below support in the 92 – 93, area. Instead, it has decided to bounce in what looks to be a possible minor spring-to-up-thrust.
We can see there’ve been two ‘hits’ on the upper resistance line. One, immediately after the up-thrust breakdown and one later … 4-bars later.
These hits essentially confirm the area, in effect, setting it up for potential penetration.
One has to think about where the stops are located.
If I was short this sector (I have been, but not currently), where would I place my stop?
Naturally, I’d put it right above the resistance (blue) line, exactly where everyone else has put theirs 🙂
Years ago, Martha Stokes wrote an update on why everybody gets stopped out of their trades, paraphrasing from this link:
‘The Market Makers don’t know you are there; they’re not interested in your tiny little stop order.
If your order does get taken out, it’s because too many small traders put their stops at the same location.
There’s an order imbalance. The market’s response is essentially automatic … take out the stops.’
With that, let’s see what happens next.
There’s no guarantee XBI, will penetrate the resistance area but if it does, we won’t be surprised.
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.
The Danger Point® 