BIOTECHS continue the 2 day romp…up on average 6% this week. Biotechs with substance (sales and earnings) as well as biotechs with nothing (not only no earnings but no sales) are big to the upside. A glance at the IBB or BBH show new high ground has been taken intraday. This is both meaningful to the group but also meaningful to the NASDAQ/NDX. This whole group should be on your screen for entries once things calm down. Leave no doubt, this is a beta group which potentially augurs well for overall markets. When beta is humming, it usually is a good thing. But as of this second, it still remains a very split tape.
We suspect this move was set off by the buyout of KITE by GILD. KITE’s purchase was for $11 billion cash even though no drug has hit the market yet and the company loses a ton of money. Go figure! GILD stock (the acquirer) is also moving strongly to the upside off of this. Is this a sign of a frothy market? One can make that case but to us…JUST WATCH PRICE ACTION!