Weekly thought on $CARA, $IBIO

This is a week of “going nowhere” market. Despite a bad week of falling $P500, I could still feel the hot air puffing out of the bull nostril. Basically, there is still a lot of fight in the bull as far as I’m concerned. I see there are great danger in shorting the market right now even though the overall mood is kinda bearish at the moment. Imagine locking a bull in a cell made of 2 x 4 knowing that the bull is far from dead. It is still raging mad and constantly banging against the 2 x 4 to break free.  This is what I think we are dealing with. The shorts will be like the guards standing by the gate (built with 2 x 4) obliviously to the bull’s resolve and is only a few unpredictable moment away from being gored.

Even then, I’m still wary of being aggressive on either side. Imagine that the cell holding the bull is sitting precariously on the side of the cliff. It doesn’t matter how much energy or resolve the bull has, a careless moment of tilting the cell in the wrong direction and the cell will fall off the cliff bringing the bull with it.  Giving my precaution, I didn’t really trade much for the week except to dabble on $PI and $TZA to pass the time.

SP-500_weekly

From the weekly chart above, this week red bar could be a start of a downtrend or it could be the much needed correction before the next leg up.  So which is which? From the lenses of a chartist, I’ve to say the probability of another down week is fairly high. Even so, I still played the devil advocate and avoided taking any bet against the market. Thus, I exited my $TZA position on Friday to avoid holding over the weekend.

Meanwhile, it is getting hard to catch any meaningful momentum to make a buck. I would be building a position in what I thought was a trending momentum only to witness the rally fizzled out in front of me and prompting me to liquidate my position quickly to stop the bleeding. There is a possibility that we are entering into a consolidation phase with a bearish tendency that may last a few weeks to months. One of the past years that matched the 2017 right-off-the-gate rally is 2012. See below 2012 SP500 weekly chart:

SP500-2012If we use 2012 as a model for 2017, then expect a correction that may continue into summer before the next big rally kick off again. But then past chart pattern is not a guaranteed indicator of future pattern; it is only a pattern in which you added to your internal algorithm to determine probability; therefore, my precaution in either direction remains steadfast at the moment until price action provides more clues in the near future.

Per promise made by Cara Therapeutics ($CARA) that the pruritus trial result will be out by the end of 1st quarter 2017, we should see trial result any day from Monday to Friday next week . Although I believe the result is likely to be positive, I lost my mojo to bet big. I smell a fleck of fear in the market and it’s bothering me.  Normally, when I’m in the zone to swing for the fences, I sense no fear- neither in myself nor in the market; but lately, I sense fear in both. So, it makes sense that I dialed down the bet.  Thus, going into the weekend, I only hold a starter position size on $CARA.

CARA_weekly

From the weekly chart above, $CARA looks like it is ready to bounce higher from recent two weeks correction.  Who know, if no trial report comes out Monday and the overall market carries a bullish tone, I may get my mojo back and load up some more $CARA for a bigger bet.  I’ll have to play it by ear.

There is only one position that I’ll never trade away regardless of any market condition and it is $IBIO.

IBIO_weekly

IMHO, despite the presence of two weekly red correction bars, $IBIO is only one news away from blasting off. Even with current lack of buying interest, I believe there isn’t a lot of shares available for high demand buying. I also believe there are plenty of long-term investors hoarding a big chunk of the float and more shares are getting picked up daily.  In other words, shares are drying up gradually to the point that the right news can trigger a rocket launch.  Any update regarding the procurement of FDA approval to start the fibrosis human trial will do the trick.

After watching the video a couple of times, I’m getting a much better understanding of the fibrosis disease and how debilitating it is to any organ it formed on. Basically, due to lack of cure at the moment, any human body part touched by fibrosis receives a high probability of a dead sentence.  And a dead sentence in any major organ means a dead sentence to the patient.  Thus, there is a lot of hope riding on Dr. Carol A. Feghali-Bostwick’s discovery.  Because Dr. Carol A. Feghali-Bostwick discovery has been tested to show positive result on human skin kept alive by biological mean, the odd of its therapeutic protein product candidate (IBIO-CFB03) to work on human increased significantly   Of course, there are still risk related to safety and its effect on a live human being overall well-being, I say at least half of the risk has been removed when you compared to other clinical trials that shown positive results on mice or animal. Seeing the good odd, how could I not load up?

Watch the video again:

Due to a slight drop on $IBIO, my port also drop a bit.

Current positions:

Main port (no margin): IBIO  CARA and 73% cash. (up 5.3% YTD)

Trading port (with margin): MENXF IBIO & GRWG

My 2 cents

From my camera:

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Categories: Daily trading Journal, trading journal

Tags: , ,

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