The ultimate biotech comeuppance is an inevitable inevitability. Soon this fantasy industry, home to drug dealers and turtlenecked liars, will be the scene of apocalyptic ruins. The bones and entails of investors will be strewn about rural streets like thanksgiving giblets.
No industry can be spared in our ongoing silent correction. That’s why whenever my model has a short bias [currently in week 4, feel free to heave a rotten pumpkin at me] I stalk the biotech short. Last week I was short biotech via BIS with impunity from the bull market siege. I closed it Friday from a Spirit Airlines seat [Ticker: SAVE, minced meat today]. I have been ferreting in and out of BIS with success but without putting on a proper sized position because I want to short from higher. Dammit man, these things take time.
But for the patient speculator, the one who doesn’t grow impatient during a slow tape, there comes an opportunity so great, so ripe for the picking, that it will look easy in hindsight. Simple, perhaps, but certainly not easy–especially if you brain gets in the way [read: brain books].
Remember how we treat news driven events? We expect price to revisit them. Maybe not right away, but without doubt eventually. Well, Hillary fired her buck shot square in the chest of biotech right around $IBB mark $354. Do you know what everyone is going to be doing when we rally up to $354? Think ticker tape parade and endless streams of snarky tweets from the IvanTheK’s of the world. A real orgy of self-serving braggiato. Do you know what I will be doing? Shorting the pants off that move. You should too.
So as the planets align and the moon shoots a white beam onto the graves of the dead, I am burning wide thickets of sage and casting a chant-like prayers to the universe–Zenu, grant thee a robust biotech rally!
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I gots no clue here. Today just mind fucked me. I was looking for direction from AAPL and it gave me nothing.
FOMC rate decision, rally into it, peak out, and reverse. That’s kinda my expectation.
I’m on the opposite side of your trade; I’m long XBI. There’s already been blood in the streets for biotechs; they seem to have found a bottom and are slowly bouncing back.
shkreli’s idiocy helped exacerbate the move down in biotechs by drawing the wrath of Hillary. But now the bad news is out and biotechs are down 20-30% from their highs. The biotechs will try to stay out of the spotlight after shkreli’s bonehead move so I expect them to chug ever higher.
Let’s look at Obamacare premiums. They’re going to rise an average of 7.5%, well above the rate of inflation. Up until 7 hours ago, Medicare Part B was scheduled to rise by 52%. Yes, 52%. Congress did some financial alchemy and have reduced the Part B increase to only 15% (although all they’re doing is spreading out that 52% increase into future years).
Where are those Obamacare and Medicare increases going? To medical costs, with biotechs taking a chunk of that increase. Shorting health care and biotechs is dangerous in light of those premium increases – that’s money well above the rate of inflation going into the coffers of medical companies.
And if anyone’s counting on Hillary or any other politician to do anything about controlling health care costs, I’ve got a few bridges to sell you.
I’m right there with you Raul, waiting patiently. I’m more of a LABD guy though.
Same with Chinese burritos and oil. Up a couple of weeks then back into the pits. Now Healthcare is at the helm for a couple of weeks.
People buy when they feel comfortable buying. Then the bottom drops out.