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Strategies & Market Trends : General market lab and commentary

SPY 675.37

-1.2%

4:00 PM EST

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From: Robohogs	7/27/2016 5:48:35 AM
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I am tracking 3 potential scenarios for XBI right now: Rally ending here - think we get to 61s as I have mentioned before. Rally ends, but I think we hold in 56/57+ range and have 2-3 weeks of consolidation before breaking higher. Ultimate target is low to mid 70s in the Fall with more possible, esp. later. Rally ending here - same target. But bios remain diseased. Retest $50 2-4 weeks out. Any move down past $58 has to be watched closely. More than $5-6 from highs opens up lower possibility. New scenario for me: XBI weekly BB is opening here. The RSI inflected around 50 (previous stopping point and a common one in weaker trending markets) but moved to 56 yesterday. This opens up possibility of extending the weekly trend up. Based on some voodo black magic, targets would be $66, 70 and 76, with a melt-up scenario at $86. This could all be a 3-4 week thing or multi-month. It does not mean straight up but no more than $2-3 pullbacks over 1-2 weeks. This scenario becomes more lkely above $62. We could retreat first for 1-2 weeks to go to high $50s and it remains in play. My preference remains 1 but 3 is gaining. My main issue with 2 is the changes ongoing in weekly rsi and with the latest trend looking like a rollover but not doing so. My main issue with 3 is that my quant work says we need to retest 200SMA from below 2-3 more times. The 2009 scenario looks like 3 but we need 1 first to match, and moves have been slower this time. Sentiment in bios and market is frothing up too. 1 could reset this a bit. Right now, key levels as tells are $62 and $58/55.

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