Comments on: Another Biotech Wreck Pending

By: snipertrader

snipertrader — Mon, 21 Mar 2016 19:08:53 +0000

@rsotc Excellent Randy as I had also been taking closer looks at Biotechs short term ( very short term ) there may be some upward popping opportunities IF we have some sideways to drift up in the general indexes as Biotechs ( or some of them anyway ) play just a bit of catch up and perhaps benefit from some incremental sector rotation under the covers as they potential hold the indexes up. Anyway just short term those views. Certainly it would be swimming against the tide ( or standing in front of the train ) since I 100% agree that medium to longer term Biotechs are still in quite some technical trouble. If the sector which lead on the way up essentially completely failed to participate in the recent rally then once that rally is exhausted this sector resume it's paused decent. They still have a ways to fall considering how elevated they were on the way up. Not sure if anyone has checked the components of the Biotech ETF's but I ran thru them the other day and fundamentally the vast majority of them have terrible financials and fundamentals. So, just like the Dot COM bubble, they bubbled up as a group on hype and promise rather than fundamentals. And ultimately in the longer term the fundamentals do matter! For sure there are some gems and longer term ( once the markets "reset", if they "reset ) there will be, just like any other sector, some fantastic opportunities I'd imagine on curated set of them Anyway, back to the technical's and the "right side of the chart" now.

By: morrienelson

morrienelson — Mon, 21 Mar 2016 17:30:45 +0000

IBB rolling over and declining should also have a similar impact on IWM of which I am short

By: rsotc

rsotc — Mon, 21 Mar 2016 16:38:23 +0000

In reply to tater123. tater123, If positioning for what will likely be a multi-week or especially a multi-month swing trade, either long or short, I prefer to short the opposite (bullish or bearish) 3x etf as to let the decay work for me vs. against my position. LABU happened to head nearly straight down from Aug 7th (official short entry) to Feb 3rd (official cover/closing date) but the decay component works even better in a choppy/sideways market). Of course, first & foremost I'd only enter the trade if I though that the price was likely headed lower. Still waiting patiently for now before shorting LABU again, need to see a little more evidence to confirm an entry.

By: joefriday

joefriday — Mon, 21 Mar 2016 16:36:19 +0000

Funny… you raise this now… I started an IBB put calendar spread last week… it’s bounced some since then..but I am obviously expecting it to roll over soon with the markets.. will see.. Shorting LABU is a nice idea too!

By: tater123

tater123 — Mon, 21 Mar 2016 16:25:42 +0000

Interesting. I was just thinking that if we got a nice healthy correction in the market, I would look to go long LABU … never thought of shorting it on the way down.