XBI Remains Challenged, But Near-Term Oversold Heading into the Election

The SPDR S&P Biotech ETF (XBI) is a tale of two outlooks. My near-term work argues that XBI is at or very near to a significant corrective-pivot low off of its Sept 23 high at 69.21 into the 57.00-56.00 target zone.

Should such an upside pivot reversal emerge, strength will meet intense resistance initially at 60.00- 62.00, which if hurdled and sustained, should trigger additional upside potential possibly to 63.80-65.30.

However, my intermediate-term work argues strongly suggests that all of the action off of the Feb 9 low at 44.16 into the Sept 23 high represents a big counter-trend recovery after the initial major correction from 91.11 (July 20, 2015) to 44.16 (Feb 9, 2016), which if accurate, means that the most recent decline from 69.21 to the 57 area is the initial weakness of a new downleg in a larger, incomplete correction that began in July 2015.

With the foregoing in mind, my work indicates that any recovery strength into the 60.00 to 65.00 area (if XBI can climb that high) is an "exit long, or sell short" opportunity ahead of another downleg that should revisit the 46.00-44 support zone.

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