XBI S&P500 biotech index may be in another rising triangle, we see price action at top of triangle for possible short entry. Instrument LABD x3 can be used for shorting this index.
Since VIX has been updating the lowest values ever and Gold value has been growing alongside the markets and sometimes even correlated with the US Dollar, traders were trying to find a valid bull-bear indicator that could show an approximate top of the historical rally on Equities.
In my opinion, DXY is a very valid indicator but there are more instruments that...
At this stage I don't see XBI shooting out of the channel. Very likely down move by Tuesday. There is a possible quick retest of the highs before the down move. If we see above average volume on a retest of highs (and unable to make a new one), that would also be a nice short setup. GL
Here's a quick look at XBI on the weekly and what I see. I'll be shorting everytime it hits the top of the trendline. I'll be shorting every divergence and overbought signals on the 60 & 240.
There's a lot of hype with the bio sector since its 2016 lows, which is exactly what a B wave does. It creates hope, only to have it taken away. This is a multi year...
You wouldn't catch me going long here (XBI) at these levels on the 60 minute chart. RSI and MACD divergence to price ratio is CRAZY. On watch for a short tomorrow. GL
There is one useful way to determine when a trend is over and that is using a 50% "speedline" of a move.
The decline from $400 in $IBB, the IShares Nasdaq Biotechnology Index Fund back in July 2015 and then tumbled 40% to $240 on February 9th, 2016 and later retested $240 on June 27, 2016.
The mid-point of that decline is $320 and a line drawn from...
... for a 5.29 credit. IVR isn't as high as I'd like it (>70% over the preceding six months), but I'll take it ... .
Metrics:
Max Profit: $529
Max Loss: $371/contract
Break Evens: 56.61/67.29
Notes: As will all flies, will look to take profit at 25% max.
