Chart of the Day – $SPX/XBI (S&P 500/Biotech ETF)

If Friday produces a swing in the S&P 500 then the odds are probably good that the market has completed the half cycle low and will now make another run at trying to break out to new all-time highs.

If this happens then I want to focus even more heavily on biotech as it held up remarkably well during the correction.

Like our new Facebook page to stay current on all things Smart Money Tracker

19 thoughts on “CHART OF THE DAY – $SPX/XBI (S&P 500/Biotech ETF)

  1. Baud

    Before you were saying this was going to be an Intermediate Cycle Low – perhaps testing the 200 day MA or getting close to around 2000. Now it’s only a Half-Daily Cycle low?

    1. Baud

      OK, I’m watching your previous video posted today which I missed. Apparently it’s an either/or thing: either a Daily-Half Cycle Low or an Intermediate Cycle Low. I wish there was some way to have more precision with these cycles…

      1. Gary Post author

        I just have to make my decisions in real time as we go along.

        It looks like to me that things were getting dicey. The European averages were starting to make lower lows and then we have the terroist attack in Britain. I think the PTB decided enough is enough, it’s time to step in and put a stop to the selling.

        This is why I keep warning not to short the stock market. All markets are rigged in today’s modern markets. You are playing against an opponent that has a printing press. Why would anyone want to fight that I have no idea.

        Some people are just stupid…or have a death wish.

        1. s29

          The central banks won’t do anything until there is a Brexit. Then they will provide large amount of liquidities to banks and the markets to soften the fall and/or to push shorts out of the market to propel it higher.

          The action yesterday has nothing to do with central banks or the PPT. It has to do with short term extreme oversold conditions (look at P/C ratio) in combination with Quadruple Witchting Expiration tomorrow. Market makers clearly want the S&P on 2080-2100, not 2050, because that will cost them a boatload of money.

          1. s29

            PPT doesn’t trade options. They buy up futures. The Fed/PPT don’t care about Expiration.

  2. Gary Post author

    No swing yet, so no confirmation that the half cycle low is complete.

    There is a swing low in oil though. This late in the cycle the odds are decent this swing will mark the bottom of the DCL. I think one could at least start scaling in and if oil still has a bit more downside to go next week then buy some more at that time.

    1. s29

      if this is a half cycle low, everything from now on must be going absolutely perfect. All new polls must indicate that the Remain group is ahead again in the Brexit vote, and on Thursday the vote must be that Britain won’t exit the EU. Only then yesterday’s low might be the final low for the time being. The chances of that happening are quite slim.

      Markets don’t like uncertainty The chances of wreckage in the coming 4 to 8 trading days are a bit higher. Again, not a chance in hell that yesterday’s low was caused by the PTT and the Fed. They don’t have any reason to intervene right now (only AFTER a Brexit vote), and they don’t care at all about Expiration. The market just worked off extreme short term oversold conditions and Expiration interests around 2050.

      1. Gary Post author

        They most definitely have a reason to intervene. Many European markets were starting to make lower lows. The S&P is getting close to a lower low as well. If they allow that to happen it will be much harder to turn the market around.

        1. s29

          Ever seen the DAX performance since March 2015? Despite more ECB stimulation, it’s a total drama. PPT and the Fed don’t care about European equity markets, especially short term movements. You seen to think that the Fed cares about the whole world. They don’t care. Look at the Nikkei and DAX.

          And you got it exactly wrong: the more the markets falls, the easier it is to turn the markets around: more shorts to cover, more bearishness. If the S&P falls to 2000-2025, then the bounce will just be bigger. It would actually be cheaper for the PPT to propel the markets higher.

        2. Joseph69

          The theory is fraud. If they can intervene US markets why not intervene European where the break down is?

          1. Gary Post author

            The Fed can’t intervene in the European markets.

            Why do you think the US markets are so much stronger than Europe.

    2. Robert

      Nice to hear. I will hold for 50 oil. Even though u thinking near 60 oil already pretty stretched since the 20 s. Not sure if much more upside above 50

  3. humbled

    2025-2000 need not be the final low.
    with all the bounces up and down the progression of lower highs and lower lows maintains below the IC uptrendline, that was broken to the downside, today around 2090.

Comments are closed.