With the indices doing nothing yesterday, we just wanted to highlight an area that we have been somewhat bearish on that just may have turned into just plain bearish. When you have a moment, time to check out the RAILS. KSU was yonked off of a cutting of guidance. This news and movement impacted the rest of the group as NSC, UNP and others took a hit. At the very least, in this market where over 40% of the market remains in poor shape, we would avoid this group for now and review positions.
On another note, the strong BIOTECHS finally pulled in after a froth week but to our eye, just looked to be extended and in need of pullbacks. Remember, this is the bubble area as over 130 IPOs have come public with NO SALES.