First off, I loved posting this savage entry earlier today–it was a wholesome gathering of words, imagery, and music for the Sunday audience.  But I figured do a dry follow up to support the colorful case made.  Below I list the supporting data, enjoy.

MODEL AND CONTEXTUAL CASE:

• The consistently wrong S&P model—fading my S&P model has been a winning trade 76.1% of the time (46 samples). The model is long S&P going into the week.
• Exodus Hybrid Oversold: Tuesday market close will mark day 10 of the cycle.
• Two out of the last three weeks saw the Utilities sector lead the way.
• Rose Colored Sunglasses—this short signal is 10-for-13 and signaled today. Here is every past instance, on the NASDAQ, with boxes drawn from Friday-to-Friday on the 5-day signal:

WHY BIOTECH?

• Last week, despite IBB (primary biotech ETF) being up 1.71%, there were 67 biotech stocks down -10% or more. There were nearly 150 biotech stocks down -10% or more the previous week.
• The biotech industry has the highest price-to-sales ratio:

SOURCE: Exodus Market Intelligence

• We are in a seasonal safe haven for shorting biotech:

SOURCE: Exodus Market Intelligence

THE SETUP AND PLAN

• Two IBB charts, for risk management purposes.  First the daily, then the hourly:

THE VEHICLE

BIS

 

 

 

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