Biotech is testing the longterm trendine now. These lines are not always perfect, but Biotech should see support soon. One reason it does seem heavy is that XBI has had a big bull run for many years as shown in this monthly chart. Monthly
It looks to me that trend line held until today (Thurs, April 28th). XBI is undercutting that trendline now. It's been a bloodbath these past 5 or 6 trading days.
I bought in too early but if anyone has any extra cash, in my opinion, LABU is no brainer money maker here at these crazy prices. Now it's down 9.32% at $8.08.
There is a very tiny gap on the daily chart of the XBI index at $87.58 on April 14th and $87.46 on April 18th. This will likely get filled since XBI is deeply oversold.
A move from XBI $74 to $87.58 to fill the gap is an 18.35% increase. For LABU that would equate to an up move of more than 50%.
SC, what's the angle or slope of the uptrend from 2009 to present on your chart? It still looks rather steep. Very similar to spx and that could easily drop to 3000.
So an uptrend from 2009 to present looks like from 34 to 42. We could have rallies along the way, looks like it's heading lower, reversion to the mean.
XBI on Monthly is lowest ever RSI...it hit 2014 prices this morning, you cannot discount earnings growth for the rise, its just not candles...the volume was large, only one open gap left....
This statement has validity: the dynamics for volatility are continually increasing. The pandemic, war, inflation. are just indications of this, and how the mood is reacting in an extreme bringing out the worst. Unstable governments. Fears are rising over years, and more and more people are realizing the gravity of the problem.
Volatility will have the largest move of any market. However, it is not a plan yet to buy and hold volatility. Trading volatility until conditions are ripe for that spike to 170 testing 1987 VIX. Most traders today are not aware of inflation--if they don't understand the concept --they will not trade it---they are not buying the rallies no more! we can drop to SPX 4000--3900----below that spx 3600---pick your spots and hold--remember --inflation was big in the 70 and 80'---that data worked then --less people in the world! I want a bounce but all rallies are being sold! This is not a buy and hold Market!
That stopped when the fed stated the Market will not be supported!
The big run in VIX will come when there is a relative calm. This will occur after all the current issues have been addressed. It comes after all this, when people feel the market is invincible.
We are nowhere near that point.
I have plan for VIX before that. There is something that needs to happen first. We'll talk more about this.
We might undercut this line a little, but there's going to be a reaction soon.
ReplyDeleteXBI, LABU are oversold on daily and weekly.
ReplyDeleteIt looks to me that trend line held until today (Thurs, April 28th). XBI is undercutting that trendline now. It's been a bloodbath these past 5 or 6 trading days.
ReplyDeleteI think hedge funds have been shorting biotech awaiting someone to call an end to the pandemic.
ReplyDeleteOCGN has 28% short
ReplyDeleteOCGN had a short squeeze last month and I knew it was just a squeeze so I took profits at that time.
DeleteYou really have to wonder when LABU will finally reach capitulation. Surely it must be close by now if it hasn't been achieved already today.
ReplyDeleteI bought in too early but if anyone has any extra cash, in my opinion, LABU is no brainer money maker here at these crazy prices. Now it's down 9.32% at $8.08.
ReplyDeleteThere is a very tiny gap on the daily chart of the XBI index at $87.58 on April 14th and $87.46 on April 18th. This will likely get filled since XBI is deeply oversold.
A move from XBI $74 to $87.58 to fill the gap is an 18.35% increase. For LABU that would equate to an up move of more than 50%.
SC, what's the angle or slope of the uptrend from 2009 to present on your chart? It still looks rather steep. Very similar to spx and that could easily drop to 3000.
ReplyDeleteYes, this is the challenge for biotech. With a bull run over a decade there's profit taking
DeleteSo an uptrend from 2009 to present looks like from 34 to 42. We could have rallies along the way, looks like it's heading lower, reversion to the mean.
DeleteI think it'll produce another rally and vicious, but it was an easier trade earlier in the Covid.
DeleteAgree though Deena, top may be in already
DeleteSPX surging!!
ReplyDeletetheres the pop
DeleteYes, good call!
Delete5 days down ---that is normal!
ReplyDeleteThe orange line saved XBI - like magic!
ReplyDeleteSC, do you think we are going to the top again?
ReplyDeleteWe could over several months but I have low expectations for May.
Deleteim short here
ReplyDeleteBad earnings from the big Boys --we will see lower lows!
ReplyDeleteXBI on Monthly is lowest ever RSI...it hit 2014 prices this morning, you cannot discount earnings growth for the rise, its just not candles...the volume was large, only one open gap left....
ReplyDeleteYou're right. Going all the way back to the year 2006 and the lowest monthly RSI is right now in the April 2022.
DeleteI have never seen an ETF get crushed as badly as LABU with the one exception of perhaps natural gas in the past.
Notice too on the monthly chart of XBI there were 8 consecutive red candles. Eight months of nothing but down, down and down.
there ya go we will trade this
ReplyDeleteplease keep this on your mind:
ReplyDeleteThis statement has validity: the dynamics for volatility are continually increasing. The pandemic, war, inflation. are just indications of this, and how the mood is reacting in an extreme bringing out the worst. Unstable governments. Fears are rising over years, and more and more people are realizing the gravity of the problem.
Volatility will have the largest move of any market. However, it is not a plan yet to buy and hold volatility. Trading volatility until conditions are ripe for that spike to 170 testing 1987 VIX.
Most traders today are not aware of inflation--if they don't understand the concept --they will not trade it---they are not buying the rallies no more!
we can drop to SPX 4000--3900----below that spx 3600---pick your spots and hold--remember --inflation was big in the 70 and 80'---that data worked then --less people in the world!
I want a bounce but all rallies are being sold!
This is not a buy and hold Market!
That stopped when the fed stated the Market will not be supported!
Go figure!
dumping shorts
ReplyDeleteSC: do you see 4700 S&P500 in may or later? and than a big drop with 170 VIX? is this your view?
ReplyDeletemany thanks
The big run in VIX will come when there is a relative calm. This will occur after all the current issues have been addressed. It comes after all this, when people feel the market is invincible.
DeleteWe are nowhere near that point.
I have plan for VIX before that. There is something that needs to happen first. We'll talk more about this.
Many thanks.. but the rebound to 4700 is again in your thought or not?
Deletewe can not even bounce intraday--lets hope the bottom is next week--I remember 87 crash--that was not pretty!
ReplyDeleteGetting very close to the crash...maybe even sometime in May...hope people are ready lol
DeleteSc ---you not Expecting a big drop 2023?
ReplyDeleteSPX 3800, then yes, strong rebound
ReplyDeleteSPX hit the bottom on Friday. Last move-up is coming as Sc expects
ReplyDeleteSc .... you still see ocgn going to 11 ??
ReplyDeleteI'm just trading OCGN until it gets a bottom. If someone pronounces an end to the pandemic that could knock it down
DeleteI have a chart coming for OCGN
Deletesc---at 20% down ---I will look at longs
ReplyDeleteguys ---we should get rally --sometime this week---but the Monthly support level --for May --is a lot lower--keep this in mind!
ReplyDeleteNew chart posted!
ReplyDelete