I added back Biotech related DVAX yesterday, noting a short-term bottoming pattern (trade log): “As for the chart, the daily has a little hint of a short-term bottoming pattern if today remains positive.”
Now let’s take a look at the Biotech ETF (daily chart), which is forming something similar. The down-sloping SMA 200 (black) is actually something of a neckline for the pattern and this morning it is breaking above that. Note two previous failures to take out and hold the SMA 200. Attempt #3 in progress.
At this point it’s a bear market bounce within a downtrend. But Biotech tends to be inversely correlated with long-term yields and a real rally would have to start somewhere. The reason I am on the lookout for such situations is due to the larger plan we are developing that sees the election cycle, bleak sentiment and a climax in Fed hawk fear as potential stimulants.
Just an fyi picture for you in a market that is at max angst during a seasonal period (Q4) that often delivers the unexpected.
 Adding the weekly chart…
It’s just pattern recognition, which is one step above witchcraft. But the small pattern above is actually working on the right side of a larger inverted H&S pattern. It does not prove out unless it takes out 135. But if it does the measurement is to 165, believe it or not.