Tape Directed Action


The LABD (inverse Biotech)  trade was opened and closed in just over one market day (6.5 hours). 


Trade action was based only on tape indications. 


This is exactly as Wyckoff described.  Financial news and corresponding ‘analysis’, must be eliminated so that all energy is focused on reading the tape.


From the February 23rd update, the low risk response to market action was to go short the Biotech sector or as it turned out, any other sector as well.


However, Biotech is unique when compared to the other indices or sectors such as the Dow, S&P, Semiconductors (SOXX) and NASDAQ 100.


That difference is the amount of built up energy or ‘congestion’ in the price action.  Biotech (IBB) has gone sideways for years … having reached its high way back in mid-2015.  Congestion equates to projection.


IBB has built up enough congestion to project a downward break (should it happen) from current levels (118 – 120), all the way to the 49 – 50 area.


Supplemental note:


LABD was re-entered early in this session at 12.14; about 2.5% cheaper from yesterday’s exit.


LABD current trading at 13.05