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Biotech Bubble Buckles: Tumbles Almost 7% To 3-Week Lows

Submitted by Tyler Durden on 04/27/2015 12:17 -0400

Biotech stocks have been surging since their mid-March plunge (back below the 50DMA), but it appears that is at an end as XBI - the SPDR Biotech ETF - is now down almost 7% from Friday's highs on heavy volume (and back below the 50DMA once again).

Which has smashed XBI back below its 50DMA on very heavy volume..

This is a major problem as if China QE can't keep the weathe creation dream alive, what will?

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Mon, 04/27/2015 - 12:22 | 6034213 Osmium

Ho-Lee Fuk. Indexes are RED, get some dipshit from the FED in front of a camera NOW!

Mon, 04/27/2015 - 12:27 | 6034237 Headbanger

Yea horry fuckashit round ey!

SUM TING WHEELY WONG!

WHAT MARKET SOFA KING WED FOR?

Mon, 04/27/2015 - 12:31 | 6034250 pods

So by dropping 7% it hits 3 WEEK lows?

Just sounds to me like this is just a wood chipper area of investment.

Be careful.

pods

Mon, 04/27/2015 - 12:34 | 6034271 flacon

Is this good for American stocks?

Mon, 04/27/2015 - 12:45 | 6034320 Groundhog Day

Lets see if they break their own quiet period rules and speak anyway...who's gonna say anything regulators? CONgress?

Mon, 04/27/2015 - 16:42 | 6035304 Arnold

There will be a social media shitstorm that will eradicate evil from the face of the planet!

Right. (Bill Cosbyesque intonation)

Mon, 04/27/2015 - 13:14 | 6034444 sun tzu

QE4 will be launched soon. The stock market is the only thing keeping the house of cards from collapsing. TPTB will not lose power so easily

Mon, 04/27/2015 - 12:23 | 6034216 Automatic Choke

GMO kale didn't sell too well, did it?

Mon, 04/27/2015 - 12:25 | 6034223 buzzsaw99

seen this dog-ears pattern before and it is MEGABULLISH. when it completes the snout the shorts better WATCH OUT!

Mon, 04/27/2015 - 12:24 | 6034224 praps

Sell in May and go away.

Mon, 04/27/2015 - 12:24 | 6034225 Whootie_who

Plunge protection team report to your desk asap

Mon, 04/27/2015 - 12:28 | 6034241 Keltner Channel Surf

Worries about research in process, or fears Yellen's FOMC may include more sector wording to tap down possible bubble? Well, the last time she initiated coverage on the small cap space, didn't work out long term ...

Mon, 04/27/2015 - 12:40 | 6034299 jump_mutha_fukah

I sure hope you capitalized on that RUT pump and dump this morning. I sat on my hands the entire time just itching to go short. It hit the top of that rising wedge on the daily and down she went.

100% cash and feeling a bit sick about not loading the puts when I had the chance. Nice volume too. Arrrrrrrrrrg. Maybe try and time the upswing, but I really hate going long the Rut at these levels.

Mon, 04/27/2015 - 12:50 | 6034337 Keltner Channel Surf

Missed it too. Was in process of switching to QQQs, then recent difficult action (likely AMZN earnings leak) has me on sidelines today like you, also don't like it when the open's above Daily Keltner, as stops have to widen. Also, recently been impossible to be short pre-Thurs on FOMC weeks, so thought I'd sit. Should've seen clear clues from RVX/VIX/VXN, no way does vol rise if they plan on ramping. Rats.

Mon, 04/27/2015 - 13:11 | 6034430 jump_mutha_fukah

Call options are telling me we have more downside coming. Premium on next week is relatively cheap compared to this week at the money....too cheap to be a bargain if you catch my drift

Mon, 04/27/2015 - 13:18 | 6034462 Keltner Channel Surf

Astute, you are. 'Textbook' would have $IWM bounce strongly from 50 back to 20 DMA and hold before FOMC to see if Janet disses small caps again (just saw 1 min volume burst, likely just VWAP algo), but how many kids use textbooks post iPads? You could make me feel better by tellin' me that since Jan 30th, this has been the most difficult trading environ you've seen in years, or you could tell the truth, or both :)

Mon, 04/27/2015 - 13:35 | 6034566 jump_mutha_fukah

Been trading since my college years in 98...Made money on the tech bust, biotech boom, housing collapse....since 2009 this has been the worst trading environment ever, but managable. Totally agee, and I would say since Christmas week 2014. As an options trader there was zero liquidity starting then and ever since, total crap shoot along with the ultra ultra nose bleed valuations. Never before see such strike pinning in the options market either. Criminal is too nice a word.

Mon, 04/27/2015 - 12:30 | 6034246 KnuckleDragger-X

People are finding out biotech does not equal magic. Next up is the computer part of the tech opium dream....

Mon, 04/27/2015 - 12:45 | 6034312 Handful of Dust

Biotech won't be able to help those thousands succumbing to Fuki radiation-related cancers.

On the bright side, Funeral Home & Crematorium stawks are hitting thier highest ... since Lehman.

And those Kavorkian 6.25% Bonds are something to die for.

Mon, 04/27/2015 - 12:45 | 6034316 LouisHill

Both AMGN and CLDN had bad news from the FDA this morning.

Mon, 04/27/2015 - 12:45 | 6034318 Chuck Knoblauch

I don't see any volume skippy.

Mon, 04/27/2015 - 13:28 | 6034526 KnuckleDragger-X

Volume is for the weak, we have HFT's instead.....

Mon, 04/27/2015 - 12:47 | 6034327 Spungo

I always think X-Bitch when I see the ticker XBI. Not sure why.

Mon, 04/27/2015 - 12:49 | 6034333 NoWayJose

Besides Biotechs, a lot of other stuff is up 15 to 20% off the mid-March lows. That's a significant move and is a little scary to hold or buy at these levels as we enter the 'Sell in May and go away' times....

Mon, 04/27/2015 - 12:49 | 6034334 matagorda

Sell the news? What do you do to top "China" and "QE" in the same headline?

Mon, 04/27/2015 - 16:47 | 6035346 Arnold

Margin Reform?

Biotech Bubble Buckles: Tumbles Almost 7% To 3-Week Lows

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