Slow down in China and Europe, Recession in Germany, Trade tension between US/China, Fed capitulation, Bear market rally exceeding 40% from lows, etc., etc., etc... all seem to point towards another leg down, possibly beyond previous lows. Over excitement by the bulls after yesterday's rally adds to my conviction that we may be heading lower, and possibly much...
Somebody asked me why XBI is going up so much.
When you have such kind of questions you need to see the big picture and control your emotions if you have an open position.
Markets go up, sideways or down because they just reflect crowd psychology.
This is why it is important, during weekends for example, to analyze the big picture.
What I see in XBI is that we...
Bear market rally of 44% off lows, MACD and RSI divergence, double top at 93 and rising wedge all seem to point towards a reversal back down to the lows. This week's ultra dovish Fed capitulation, Brexit/EU uncertainty, drug price control debate, VIX under 14, extended China/US trade talks, ultra-low job creation, slowing economic growth globally and missed...
... for a 1.67/contract credit.
Max Profit: 1.67 ($167)
Max Loss/Buying Power Effect: 3.33 ($333)
Break Evens: 83.33/99.67
Notes: Some nondirectional premium selling here in an exchange-traded fund with high implied (24.8%) relative to the broad market; going 25 delta with the shorts, five-wide with the longs and collecting...
Applying some of the most popular indicators on the pair XBI/IBB shows an interesting pattern. While XBI has been clearly outperforming IBB since several weeks, a trend reversal seems to occur. IBB might catch up in the coming days and weeks.
The beginning of a new age w novelty therapies in Biotech sector (i.e. gene editing, gene therapy, ERT, Pi3K inhibitors, FAK inhibitors, heart disease, diabetes, mental health, medical equipment, cannabis, etc..)
The Bio technology sector will see a bunch of M&A in coming years as big pharma merge to take market share in different parts of the industry, novel...
Solid bounce from the lows, running into heavy price and trend resistance after a 50% fib retrace, looks to have printed and hanging man candle for the day as well. LABD is my method of shorting this with stops right over the price R on XBI.