Lately, I haven’t been able to get a solid feel about where the market is going. Even when market spiked higher after Fed’s rate increase, the lack of follow-up Thursday and Friday had me wondering if there is going to be a delayed negative reaction to the higher rate. Can our economy handle the new range of 0.75% to 1.00% percentage increase from the usual quarter-percentage point increase?
So far, the daily SP-500 chart is showing a bit of correction after the market rally on Wednesday. But if you look at Friday volume in the SP-500, it is much higher than average with the day closed slightly negative. Nevertheless, this volume spike increases my desire to take precaution with my positions on $PI and $CARA.
Regarding $PI, I was unsure of how the market is going to react with the much higher rate increase of 0.75% to 1.00% percentage point due to my belief that higher rate is not necessary good for the retail industry. But seeing the market turning green instead of going south after the rate increase announcement, I went full-tilt on $PI by buying an over-weighted size to see if I can catch a possible rally. Unfortunately for me, $PI did not rally as much as I would like to see so I was forced to reduce my position size back to standard size to reduce my risk.
I tried to size up again on Thursday but back down again when price failed to maintain attitude in the high $28. After seeing a red SP-500 on Thursday, I decided to play safe and exited my entire $PI position.
From the daily chart above, Friday showed a more aggressive price movement to the upside so I decided to buy back some. This time, after getting burned from the whipsaw actions from the previous two days, I decided to buy a relatively smaller size to start since I was buying back at much higher level than I sold only a day ago. And when price took out $29 resistance, I added a bit more. Although price did not close above the ascending triangle to confirm a breakout, it still has an overall bullish tone to it.
However, I’m still wary about the overall market direction mentioned above. While the above $PI daily chart shows an ascending triangle giving the price action on the last three days, it could easily become a confirmed bear flag if price is to take out the low of the last three trading days. This is the main reason I decided not to jump back in with a full size on Friday. Giving the volatility of $PI, a bad market day could easily take price down to confirm a bear flag. Thus, with a smaller size, I could exit without getting hurt too much.
I also added more on $CARA after Wednesday Fed announcement; but decided to sell the add by day close. While there was a good spike up on Thursday which I failed to sell on the high, the rally failed and I decided to exit my entire position for the same reason I did for $PI.
Price did not do well on Friday but I decided to buy back a starter position for the possibility of pruritus trial result releasing on Monday. As mentioned above, my precaution on the overall market direction has lowered my appetite to take big risk.
$IBIO also suffered a minor set-back due to a smaller volume sell-off.
From the daily chart above, you can see the huge difference in volume (see blue arrows). I believe someone wanted to shake some shares and they ain’t going to get mine. The current concern regarding yellow fever is real and if Brazil cannot control the outbreak, there is a possibility of shortage in vaccine when yellow fever spreads to other countries. While I do not wish for this to happen but it is good to know that company such as iBIO has the ability to produce speedily and economically massive doses of yellow fever vaccine if called upon by higher authority to do so. That is what I meant when iBIO’s plant-based vaccine production technology becomes relevant.
But my real motive in holding $IBIO is for its fibrosis program developed by Dr. Carol A. Feghali-Bostwick to succeed. A successful trial in this area can save a LOT of lives that couldn’t be saved before. Watch the video and you will understand why I say that.
Due to whipsaws from trading $PI and falling prices from $CARA and $IBIO, my port gave back the gain I made last week.
Main port (no margin): IBIO PI CARA and 65% cash. (up 7% YTD)
Trading port (with margin): MENXF IBIO & GRWG
My 2 cents
From my camera: