XBI trade ideas
Biotech... leading the market down... serious support broken...I have been monitoring this index for years and a *serious* support level was *smashed* today. Combined with the crashing of bitcoin (prior to making new ATHs), extremely weak RSI, and the rise of the VIX, I believe the market is in for a serious reckoning. Prepare for cash and short strategies! FED has one final save over the next several months IMHO and it will not last.
Biotech down on news, may enter new downtrend.The biotech sector fell today news that Donald Trump intends to sign an executive order demanding that pharmaceutical companies give the US government "favored nation" prices. The news may not be as bad as it sounds, because Trump is apparently only launching a pilot program that will effect a small number of drugs. However, it's hard to predict the market's reaction to the news. Biotech is still above its trendline and its MACD is still above the signal line, so it's still bullish for now. But it could breach both tomorrow and enter a downturn. Beware if XBI falls below about 84.90 tomorrow.
OPENING: XBI JUNE 21ST 75/78/92/95 IRON CONDOR... for a 1.04/contract credit.
Metrics:
Max Profit: $104/contract
Max Loss/Buying Power Effect: $196/contract
Break Evens: 76.96/93.04
Delta/Theta: -2.95/1.41
Notes: Back into biotech, collecting one-third the width of the wings. Will look to manage the trade at side approaching worthless (i.e., rolling toward the tested side) with a profit target of 50% max.