“The stock market is designed to fool the brightest of men.”
Bear markets are the hardest types of markets to profit from. More often than not, you do not know you are in a bear market until you've been ripped at the claws of it. On the flip side however, they are also the fastest markets to profit from (if you time them correctly). With that said, it is very important to remain disciplined and respect your stops.
With the markets set to open down ~1.5% let's take a look at a game plan and how we can possibly profit from it.
As the market goes up, remember "Leaders lead." And as it goes down, the same will hold true. It is no coincidence that as the IBB started slipping yesterday, so too did the market. If you extrapolate the larger trend on the IBB you'll see that not only are we in a downtrend, but we broke the slight uptrend we'd formed since August 24.
IBB Broke trend started on August 24th on the heaviest volume it's had in months. Looking at a current gap down as well to add to the pain. This is not a BTD (buy the dip) scenario. Here are key levels to look for.
Possible lines of "support" for IBB.
The IBB, like the market, is the sum of it's parts. That said, if you look at the former "leaders" of the IBB you'll see that they've quickly gone sour and turned to laggards. Namely AMGN.
AMGN has quickly gone sour since topping out in July. The issue has been consolidating with a 144-145 support line as of yet. It looks to gap down below that number pre-market. Of all the bios, this one to me is the weakest.
Aside from the IBB, the former market leaders are now lagging. With any hint of bad news spelling disaster, take a look at how TSLA behaved after topping against 272 yesterday. The issue looks to continue its downtrend today with a gap below 260. Look for 252 to function as support once yesterday's lows are breached.
TSLA failed again at the top of its range. It's also near breaking the rising trend it's set since August 24. Look for it to collapse if it takes out yesterday's lows.