ucsgears

Risk Averse Market - 2015 First and Second quarters

INDEX:SPX   S&P 500 Index
What I am not showing here is, that the Cyclicals are losing steam, Sensitive Market is in neutral trend, Defensive has been the buyers paradise since OCT             2014.

Why I think that this can be called as a Biotech Bubble is because, It has done the same exact thing Financials did in 2007. ie., Moved tooo quick tooo far.

Yes Bio Tech (Healthcare) sector is a defensive sector, but this is not "the normal" on a defensive sector.

What could fuel this bubble burst ? That's up to the Govt, and the Medical Insurances out there. Most Medical Insurance at this point is so frustrated with the high Drug / Healthcare provider prices.

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Note : This is not a Doom and Gloom Idea to trade. Its just my opinion - I am personally taking cautious actions with the market, that is reducing the risk to 1% or under in a trade. And focus on the Strong and Weak Sectors, Rather than the mixed bag.

This may not happen until second quarter of 2015, or even mid 2015. While the trend is up, I am still bullish . Until there is a transition.

Related Ideas - Show how trend changes again IMO.
You should also put up the Biotech ETF
+2 Reply
ucsgears PRO QuantitativeExhaustion
2 years ago
oops, I think I missed it. I was comparing the IBB with the XLV, Obviously IBB is way over extended.
+1 Reply
ucsgears PRO
2 years ago
Well, Technically how this will play out in my opinion - A Weekly Momentum Divergence, which will pull it away from the current trend, then a bounce and then Major Divergence will start to play out. Provided the Major Divergence does not breakout.
+2 Reply
ucsgears PRO
2 years ago
The Very long term outlook is that, The Fight for the current deflation will reverse and we will start to face a inflation - Making the Commodity based Sectors to be Bullish again. With new highs on Gold and Oil. Advice is to just be prepared to face it. I will start to accumulate a piece of GOLD etf. GLD or IAU. Rather than the "IOU" that i currently have in my bank. That will be a long term Plan, provided all plays out -
snapshot
+2 Reply
jangseohee ucsgears
2 years ago
Bull flag symptom?
snapshot
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jangseohee
2 years ago
let's see the Oct 2014 lower be taken out by 31Jan or not
What would happen when XLY/XLP low is taken out?
+2 Reply
ucsgears PRO
2 years ago
While, Waiting for the Longer term Play on GOLD -  
+2 Reply
2use
2 years ago
Now i agree, it is a biotech bubble and it is quite risky to sit long in it now after such a rally.
+2 Reply
jangseohee 2use
2 years ago
2use, if you see my failed trade of catching the top for REGN, think i fair better this time strike 430 put options :-)
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2use jangseohee
2 years ago
I hesitate to catching tops and indeed i try not to scream bear until proven. In Biotech especially, i am guilty of missing the run myself.
+1 Reply
YaKa PRO
2 years ago
Very good post - thx
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ucsgears PRO
2 years ago
Mark this post, We are heading to the Final Run - Could last for few months. Then, TADA.........................
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jangseohee
2 years ago
this IBB (linear chart) sound like a Top Thrill Dragster at Cedar Point!!!
snapshot
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2use jangseohee
2 years ago
or it will just go 95%
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ucsgears PRO jangseohee
2 years ago
Yeah, Wild big bets of calls are being placed. Option volume on biotechs are increasing like never seen.... When everyone wants to buy it, Parabola happens, and we all know how parabola trades.
+1 Reply
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