GIR- Regarding the risk of getting caught on the wrong side of a breakout above the Aug highs, the stops are much too close to do any major damage on this trade. With the potential golden cross on the 50/20 ma pair, I checked using both simple & exponential moving averages on XBI and both have been plagued with several whipsaw signals (bullish & bearish crosses) so far this year. That also holds true if we get a solid cross on the 200/50 MA pair (both the simple & exponential 20 & 50 MAs appear to be intersecting now).

Those are potential longer-term bullish developments. As of now, the XBI/LABU short is only intended as a quick pullback trade based off the intraday charts & with the broad markets just recently showing some early signs of cracking (again, only on the intraday time frames), I think the XBI short still has a decent chance of playing out.

Also notice the impending golden cross — or bullish 50-day/200-day moving average crossover — signaling that the intermediate-term uptrend has overtaken the longer-term trend.

The author sees more upside due to the crossing of the averages. Does this make you cautious about this trade?