A SHORT NOTE ON BIOTECH

Biotech continues to lag this recent rally and badly. We noted this in the past week. We are not sure if it is meaningful to the markets but to quote ourselves from yesterday’s radio show: “If they cannot rally while the market is going up, then when the market goes down, they will lead down!”

Today, we are seeing a few breaks to the downside out of what we call “inverse flag” patterns. These patterns are basically the worst of all patterns as it shows that even after a cliff dive, there is no buying to be had.

We will leave it at that. Price and volume are speaking loud and clear in what was the strongest risk area during the bull market.