An interesting start to large cap earnings. The sector was weak yesterday and this could be the long awaited pullback (or another head fake). Ideally, the pullback bottoms out in the $73-$75 range on the XBI to form a higher low. While a retest of the recent low around $64 is not impossible it would […]
January 24 Biotech Update
Another day and another chance to grind away at these levels. Yesterday was pretty weak and it will be interesting to see how the sector reacts. If we have an inside day, then perhaps the near term trend remains the grind but if we break below yesterday’s low then it is another sign that the […]
January 22 Biotech Update
Certainly not the best start to the week but it remains early. As long as the XBI remains above $80 I would not worry too much about this being the long awaited correction but this is certainly price action that one needs to watch. I think today offers the strongest test of the recent move […]
January 15 Biotech Update
We are clearly not out of the woods for a correction but we should also remember that corrections can occur through price or time. In other words, most think of a correction as a retracement of a move higher and while that is most common, it can also occur through time where prices grind in […]
January 11 Biotech Update
Everyone continues to expect a pullback and yesterday looked like it would be the day that starts the correction but we ended up green again. This has been on the of the strongest JPM weeks I remember (at least from a price action perspective). Yesterday is another brick in the wall of the idea that […]
January 8 Biotech Update
The sector is ripping higher the past couple days, which makes sense given the news flow. I thought the XBI could hit $80 and it did. This is an area of some resistance and the question is whether or not this momentum could actually carry it to the $85 area. Over the near term I […]
December 31 Biotech Update
The selling has been relentless but we are now seeing a nice rally/dead cat bounce. While one has to be very careful with any rally as countertrend rallies in bear markets can be face ripping, there are some nice signs for the biotech sector. While there is some reason for optimism one still has to […]
December 6 Biotech Update
China is back in the news and for good or ill, the sector fundamentals do not matter. Right now it is all about China and the broader market will pull the sector higher or lower. At this point with no trade deal and with the arrest of the Huawei CFO (the daughter of the CEO […]
November 29 Biotech Update
We are at an interesting place for the sector. The XBI is approaching the upper end of the downtrend, which has been acting as resistance. I am not totally convinced that will be the case this time as the recent move lower did not form a lower low. That hints that we could be leaving […]
October23 Biotech Update
It is unfortunate that the earnings weeks comes as the market seems to want to collapse. Industrial earnings are finally seeing the impact of the trade policies and now apparently it is a biotech issue. It is hard to see how the sector would avoid being pulled into a larger market sell-off regardless of the […]
October 22 Biotech Update
This should not be week of no news as we have the ESMO data to digest as well as a number of large cap earnings to work through. Unless there is some massive move in the market, it is hard to imagine that the sector does not trade on the news as opposed to following […]
October 12 Biotech Update
Not a lot in terms of news but certainly in terms of action. The selloff has been brutal but I think we are much closer to a bottom than many think. My question is not whether we get a nice short covering rally soon (I expect we do) but what happens after the shorts cover? […]
October 10 Biotech Update
I do not think there is much to say today outside of the obvious. The market is not looking good and we seem to be entering (or in the midst) of a broad market correction that is going to take everything down with it. Fundamentals are not going to matter in the near term. It […]
October 9 Biotech Update
It was certainly not a great start to the week and the sector really needs a turnaround Tuesday to pan out. Interestingly, the pharma and large cap bios did OK yesterday as perhaps a flight to safety trade. The IBB seems right at the bottom of its range and has the potential to find support […]
October 5 Biotech Update
Yesterday was brutal to say the least. There really was nothing to like about it. The XBI seems to have broken below its range and the IBB is rushing to the bottom end of its range. I have been talking about the XBI as the early warning index for the IBB and unless it can […]
October 2 Biotech Update
There is not a lot of news today, so I will keep it relatively quick. I am really not starting to like the way the sector is trading. The XBI continues to act like crap even as the IBB trades near the upper end of its range. If the XBI cannot rally and rally fast, […]
September 27th Biotech Update
We continue to see the disconnect between the IBB and XBI, where the large caps are outperforming the SMID. Given that the previous range break on the IBB did not hold, I suspect we will need greater SMID participation but it is not crazy to see investors first put money to work in large caps […]
September 25 Biotech Update
The sector appears to be gaining some momentum but we need to see the strength continue and ideally broaden. Positive data being rewarded is good as there have been times where positive data got nothing than a quick spike only to be sold later in the day. The IBB is back at the high end […]
September 5 Biotech Update
The hurricane thankfully missed us, so back in the office. The sector had a rough day yesterday but it only took us to the area that should act as new support. A quick dip under 120 or so would not be bad but it has to be quick. Honestly, we have already tested the support […]
September 4 Biotech Update
Another slow start to the week. Sometimes there are expectations for deals after long weekends but the sector continues to disappoint in terms of M&A. Given how important M&A was to many sector theses at the start of the year (and that includes me), it is impressive to see the performance. Explaining the performance is […]
