NASDAQ Biotech Index- IBB

I'm not even sure if I should post this, it's not a trade that I'm interested in right now, but some background might be helpful as there are qualities to it that could make it a trade pretty quickly. One of the defining features I've noticed is comparing the underlying trading vehicle, IBB to the Ultra BIB and UltraShort, BIS. Usually there's pretty good confirmation between the 3 if there's something solid going on, this looks a bit like chaos which is not surprising with an approximate -20% decline, the media's official definition of a bear market although that really is silly.

In any case, there's definitely a longer term core short play here, just not at the moment and there may be a volatility shakeout/dead cat bounce play here as well, but once again, I don't want to let cockiness or greed influence decisions when in this time of increased volatility (which means increasingly larger surprises as well), we really need to be demanding more from the trade set ups.

The charts...

 Here on the Daily chart I',m pointing out the deceptive nature of price as it sees an increased ROC to the upside just as it transitions from a stable stage 2 mark-up trend to a stage 3 top, I want to point these out every time I see them so you get use to seeing the concept and you know to be careful when that change in character appears as it leads to changes in trends.

We do have a H&S top, it's in the right place for the trend, it's about the right size, I confirmed it with volume analysis and while at first it was shaky, it fell in to line and looked as it should where it's most important (around the top of the head).

Remember the H&S VSO- Volatility Shake Out, this is a concept I've mentioned several times this week, technical traders short an asset like this as it breaks the neckline which they consider "confirmation".

I'll only short a H&S at 3 areas, the Head, the top of the right shoulder and then ONLY AFTER a break below the neckline and a VSO back above the neckline, ideally I want to catch the reversal of that shakeout of new shorts and that';s the last place I'll short a H&S top.

So this one does look primed and in the right spot with the right performance for a Volatility Shakeout of new shorts.

This is the 30 min trend, we "might" have a break of the chain of lower lows and lower highs, that remains to be seen.

I checked the daily 3C as well as MoneyStream and it looks like there was fast distribution out of this one, it wasn't like the typical longer distribution which is probably why it has fallen so hard, too many large funds trying to exit all at once just like AAPL when it lost -45% off all time highs.

The 4 hour chart offers more detail and is a bit cleared on distribution at the H&S head which is the ideal place for them to do it.

 This is where things get whacky, the 5 min chart looks pretty good for a swing or options trade, take a closer look.

5 min chart, it also looks like it may be putting in a small stage 1 base with a head fake move below "support" if we can call it that, which is the obvious and expected play as if it were a double bottom shakeout.

Around the 10-15 mi charts the asset is in line, I looked at the leveraged versions and BIB was in line as well while BIS was negative, which is what I'd expect, but for confirmation both IBB and BIB should be positive rather than in line and the reason I say this is because of the 30/60 min charts which are positive, I don't know how you jump from a 5 min positive to 30/60 min positives without the 10 and 15 also being positive, I suppose some weird accumulation on certain days could do it, but the Ultrashort, BIS is the only one making sense in that regard, the other two are not so I'm a bit put off by that.

 As for intraday, this is the 1 min, there seems to be a nice rounding process in place on a positive divegrence.

 There's migration on the 2 min and 3 min above and you already saw the 5 min positive so it's a bit interesting, but I'm just not completely sold, maybe a phased in entry or a speculative size position until things become more clear if you really like these beaten up stocks.

We'll keep an eye on it and see if there's any solid opportunities, we really only need two charts to show some changes and we have a full house across all timeframes.