Forgotten Profits Trade Setup Archive
Below you'll find Ian's setups stacked up and ordered chronologically. As this service once resided at another home, the alerts only go back to mid July. For a full track record, see the portfolio.Novo Nordisk Job Cuts
Novo Nordisk Job Cuts: 9,000 Roles Axed as Pharma Giant Restructures
Danish drugmaker Novo Nordisk, maker of the blockbuster weight-loss drug Wegovy, is embarking on a major restructuring under new CEO Maziar Mike Doustdar.
The plan includes roughly 9,000 Novo Nordisk job cuts, or 11.5% of its global workforce, as the company grapples with slowing growth and intensifying competition.
Key details of the restructuring
- Workforce impact: Around 9,000 roles were cut from 78,400 total employees worldwide, including 5,000 in Denmark.
- Financial cost: One-off charge of 8 billion Danish kroner (~$1.26 billion).
- Profit forecast: Operating profit growth guidance trimmed to 4–10% for 2025, down from 10–16% previously.
- Shares: Stock rose 4.1% in early trading despite the news, suggesting investor approval of cost-cutting moves.
Strategic rationale
The restructuring is aimed at streamlining operations, speeding up decision-making, and channeling resources into Novo’s core franchises of diabetes and obesity care.
CEO Doustdar emphasized the need for a performance-driven culture and disciplined capital allocation, particularly as obesity treatment markets become more consumer-driven and competitive.
The sweeping Novo Nordisk job cuts mark the first major initiative of his tenure.
Market pressures behind the move
- Competition: Eli Lilly’s Mounjaro and Zepbound continue to gain share, pressuring Novo’s Wegovy sales in the U.S.
- Supply chain strain: Production bottlenecks have hampered consistent availability of Wegovy, eroding customer loyalty.
- Pipeline setbacks: Disappointing trial results for obesity candidate CagriSema have weighed on sentiment.
- Pricing environment: A rise in compounded weight-loss drugs in the U.S. adds low-cost competition.
Leadership transition
The shake-up follows the surprise ouster of former CEO Lars Fruergaard Jørgensen in August.
Doustdar, long a company insider, assumed leadership with a mandate to defend Novo’s diabetes and obesity franchises while instilling urgency.
He highlighted three priorities: maintaining leadership in core therapy areas, building a high-performance culture, and realigning costs—priorities that underpin the Novo Nordisk job cuts.
Bottom line
Novo Nordisk is taking drastic action to reestablish momentum in its most profitable franchises.
The announced 9,000 Novo Nordisk job cuts reflect both cost pressures and the need for organizational agility in a rapidly evolving obesity market.
While painful for employees, the move signals to investors that the new CEO is serious about defending market share and restoring growth.
Long-term, Novo’s success will depend not just on cost control but also on supply chain execution, regulatory navigation, and pipeline breakthroughs.
Investors will be watching closely to see whether the restructuring translates into a sustainable competitive advantage.
Lumber Prices Warning Sign
Lumber Prices Are Flashing a Warning Sign for the U.S. Economy
Lumber futures have fallen roughly a quarter from early August highs, even as major producers announce output cuts.
In past cycles, this type of move has preceded slowdowns in housing and broader activity—making today’s lumber prices warning sign worth a close look for traders.
What just happened (and why it matters)
- Futures slide: From a three-year high in early August to about $526.50 per 1,000 board feet (≈-24%).
- Spot confirms: Framing Lumber Composite Index down ~12% since Aug. 1.
- Supply response: Interfor to trim output ~12% across North America; Domtar taking downtime and idling capacity.
- Policy overhang: Canadian softwood duties rose to ~35% (from ~15%); additional U.S. tariffs on imported wood remain under consideration.
- Demand cooling: U.S. residential building permits fell to ~1.4M SAAR (lowest since mid-2020). Total construction spend off ~3.4% from May 2024 peak.
- Rates backdrop: Mortgage rates have eased and markets expect a Fed cut—potential cushion into year-end.
Historically, lumber often leads turns in housing and can foreshadow shifts in cyclical growth and inflation impulses.
How we got here: The tariff-and-inventory roller coaster
Prices ripped into spring on tariff fears—then whipsawed as policy signals changed—before surging again ahead of scheduled duty hikes.
Many buyers focused on the policy story rather than the end-demand reality, leaving ample wood “on the ground” as permits and construction cooled.
With Canadian producers facing higher break-evens under steeper duties, curtailments are the logical next step to clear the glut—another reason to take the current lumber prices warning sign seriously.
Market dashboard
| Indicator | Latest Take | TraderInsight Read |
|---|---|---|
| Futures (LB) | ~$526.50/mbf, off ~24% from Aug high | Bearish momentum until a base forms above the anchored VWAP from the peak |
| Permits | ~1.4M SAAR (Jul) | Signals softer near-term framing demand |
| Canadian share | ~24% of U.S. consumption | Higher duties → higher break-evens → risk of more curtailments |
| Rates/Fed | Cut expected near-term | Potential tailwind for a late-Q4 demand bounce |
Trading implications by group
Homebuilders & suppliers
- Homebuilders (XHB/ITB): Sensitive to permits and mortgage rates. If rates ease and the Fed cuts, look for base-building; otherwise tactically fade rallies into weak orders/backlogs.
- Building products (HD, LOW, MAS): Remodel demand is the largest lumber sink; watch comps and big-ticket transaction trends for confirmation.
Timber & paper/packaging
- Timber REITs/Producers: Curtailments can stabilize price but pressure near-term volumes. Favor balance sheets with lower cash costs and optionality across regions.
- Rails & trucking: Volume softness from forest products can ripple into transport earnings—track weekly carloads for confirmation.
Levels & tactics (for active traders)
- Futures/LB: Trade reaction at prior breakdown zones; respect VWAP and the first 30-minute range. Short failed retests; cover into exhaustion flushes.
- Equities: For cyclicals levered to housing, fade strength beneath declining 20/50-DMA clusters; flip long only on close > reclaim with volume.
- Policy risk: Headline volatility around tariffs can invert intraday bias—size down ahead of scheduled policy milestones.
- Macro hedge: If you’re long homebuilders, consider pairing with producers or transports that weaken on additional curtailments.
Anchor a VWAP to the early-August high in LB to track where trapped longs may supply bounces.
What could invalidate the signal?
- Rapid rate relief: A clear mortgage-rate downswing with a Fed cut that reignites permits and starts.
- Accelerated supply cuts: Deeper curtailments that quickly tighten spot markets and lift basis.
- Policy clarity: A durable truce on tariffs/duties that normalizes cross-border flows and reduces precautionary stocking.
Short of those developments, we treat the current backdrop as a bona fide lumber prices warning sign for cyclical growth into fall, while staying flexible for a Q4 re-acceleration if financing conditions ease.
Bottom line
Lumber is once again acting as a leading indicator. Futures and spot weakness, swelling inventories, and producer curtailments—against softer housing prints—compose a credible lumber prices warning sign.
Trade the tape you see: respect breakdowns, let policy headlines set risk, and be prepared to rotate quickly if rates deliver a late-year demand bounce that blunts the lumber prices warning sign.
For now, we stay tactically cautious on housing-levered equities and selective in materials, using price to confirm whether this lumber prices warning sign morphs into a broader macro slowdown—or gets invalidated by easier money and tighter supply.
Biotech Stocks Year-End Rally
Biotech’s Breakout: Trading XBI Leaders into Year-End
Biotech just put up a statement week: the SPDR S&P Biotech ETF (XBI) gained 6% while the broader healthcare ETF (XLV) slipped ~0.8%.
When this corner of the market leads, risk appetite is usually broadening—exactly the backdrop that can fuel a biotech stocks year-end rally.
Snapshot of the tape
- XBI performance: +6% last week; +5% YTD, tracking a third straight single-digit annual gain.
- Price location: ~$94.22 (Tuesday close referenced).
- Relative strength: Beating XLV and signaling “risk-on” rotation potential.
- Pattern context: Monthly breakout above a long-term bearish head-and-shoulders.
- Measured objectives: $100 near-term, $115 possible by Q1 2026 if the breakout holds.
- Plan implication: Favor long setups on constructive pullbacks and confirmed breakouts.
As always, we trade the reaction—not the prediction—by letting levels, volume, and VWAP do the talking.
Technical view: XBI roadmap
A decisive monthly close above the neckline flips the prior bearish script and argues for upside follow-through.
In practice, we watch a retest-and-go behavior toward $100; sustained acceptance above that round number opens pathing to the $108–$115 zone into early 2026.
For active traders, that backdrop supports a tactical bias aligned with a biotech stocks year-end rally, while still respecting invalidation if the breakout fails back into the old range.
Leaders & setups we’re tracking
| Ticker | Context | Trigger/Entry | Risk/Invalidation | Target Idea |
|---|---|---|---|---|
| Incyte (INCY) | +25% YTD; strong RS vs. XBI; four-week 25% surge created a bull flag ~2% below 52-week high. | Breakout through $87 confirms flag; add on constructive back-test above prior high. | Stop below last higher low / flag low; avoid chasing extended intraday wicks. | Measured move toward $104 into year-end if momentum persists. |
| Crispr Therapeutics (CRSP) | +40% YTD; 25% pullback from July 52-week high; testing prior resistance band near $55. | Accumulation near $55 with confirmation from bullish reversal candles (piercing line, doji). Add above double-bottom trigger $61.54. | Use $50 as a hard stop to respect structure. | Re-attack of the July zone toward $70 if buyers reassert. |
| Merus (MRUS) | +58% YTD; within 4% of 52-week highs; serial constructive patterns (double bottom → cup breakout → bull flag). | Entry on clean breakout above $68 pivot; scale on rising volume and tight intraday higher lows. | Invalidation below flag low / failed breakout that cannot reclaim the pivot. | Year-end swing objective near $83 if trend structure remains intact. |
Price references: INCY ~$86.05; CRSP ~$53.83; MRUS ~$67.25 (Tuesday quotes provided in the source text).
Execution checklist (for the next 2–6 weeks)
- Respect round numbers: $100 on XBI is likely to matter; reclaim-and-hold favors the biotech stocks year-end rally narrative.
- Use anchored VWAPs: From each stock’s July peaks/earnings reactions to gauge winner/loser positioning.
- Let flags finish: Chasing mid-pattern is low-reward; wait for break/close/hold behavior.
- Trade around a core: Scale partials into strength; rebuy on back-tests that hold.
- Risk discipline: Keep stops at structure (flag low/last HL) and avoid adding below invalidation.
Bottom line
Biotech’s leadership is back on the tape, and the multi-timeframe breakout in XBI supports the idea of a biotech stocks year-end rally.
INCY offers relative-strength continuation, CRSP provides a pullback-to-reset opportunity with clear triggers, and Merus remains a textbook trend name near highs.