Monthly Archives: June 2017

Biotech Smack-Up

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During last year’s insane election, Trump made big claims about really taking drug companies to task, reigning in the crazy expenses of medicine, and in general giving the overpaid makers of drugs the kind of smack-em-up they all deserve. Well, right on the heels of his rousing success building a border wall (and having the Mexicans pay for it), completely overhauling the tax system, and sending Hillary to jail, he has, on top of all those successes and promises kept, beat the stuffing out of the drug companies, including the entire biotech sector………

0630-ibb

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3 Things the Charts Are Saying About the 10-Year

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Three things the technical set-up is telling us about the benchmark 10-year Treasury yield:

  1. The Momentum low of the correction after last year’s advance from 1.32% (7/06/16) to 2.64% (12/16/16) was established on 4/18/17 at 2.17%. All of the downside action in yield thereafter, into mid-late June 2017, has been unconfirmed by Yield Momentum.
  2. On 6/14/17, Yield hit its corrective low print at 2.10% off of the December 2016 high at 2.64%, which was accompanied by divergent, much higher Momentum readings. In addition, the 2.10% low represented a 38% retracement of the entire prior major upleg from 1.32% to 2.64%.
  3. The 6/26 minor pullback yield low at 2.12% followed by a sharp upmove to 2.25% on 6/28 represents a successful retest of the 6/14 low at 2.10% and a successful retest of the dominant up-trendline off of the 7/06/16 historic low yield of 1.32%. From a big picture technical perspective, benchmark 10 year Treasury Yield appears to be in very promising technical condition ahead of the initiation of a new upleg that extends its first bull leg from 1.32% to 2.64% towards a projected next target zone of 3.00%-3.15%.

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Finished

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The quarter’s end is upon is, and all in all it’s been a total meh. Month after month, CB-driven lifetime highs on the indexes. I’ve been able to survive this continuing debacle surprisingly well, and one of my many short positions that I’m still cheering is FInish Line. I’ve shown it before, but this is a classic topping pattern which I believe will succumb swiftly to the slightest bit of market weakness, if such a thing is ever permitted again.

0630-finl

Volatility Heats Up…Summer Selloff Ahead?

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The following three ratio charts compare the strength of the NDXRUT, and SPX with their respective Volatility Index.

The following NDX:VXN ratio chart shows that NDX is sitting in a precarious spot at a rising trendline, but well below what is now major resistance. All 3 technical indicators are still in “SELL” mode, as rising volatility outstrips price performance.

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