stock market S&P 500

Biotech and Technology Stocks Rally, Is It A Breakout or Fakeout?

This column is my opinion and expresses my views. Those views can change at a moments notice when the market changes. I am not right all the time and I do not expect to be. I disclose all my positions clearly listed on the page, and I do not trade my account on the stocks spoken of in this column unless fully disclosed. If that does not work for you stop reading and close the page. Do not bother me or harass me.

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Biotech and Technology Stocks Rally, Is It A Breakout or Fakeout?

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Biotech and Technology stocks both showed a little bit more life today, then they have in past days. Should this trend continue tomorrow, it would be a good sign for the stock market as a whole.

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S&P 500

The stock market continues to be extremely volatile, with another day of wild price action. I think I wrote this last week, but it makes trading this market nearly impossible. I’m glad I do not trade the market, and only use a buy and hold strategy, easier to manage, and less stressful. The S&P 500 lows reached 2,700 today, by the end of the day we made a round trip and finished lower by only 1 point, go figure.  The volatility remains too dangerous to try to time anything these days. The sad part, I think it is here to stay for some time, and we should get used to it.

stock market S&P 500

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Biotech Stocks

The NASDAQ Biotech ETF (IBB) closed today just a hair above $111.50, at $111.80. For me, that is not enough to say it broke out. You need to watch tomorrow for a follow through. The group needs to continue higher and manage to rise significantly above $112. Also, I want to see this group meaningfully outperform the major averages. If we get those two pieces tomorrow, I become much more constructive on the group. But to this point, I’m not convinced.


The iShares Biotech ETF (XBI) had a much sharper rise, but again,  I want to see a meaningful follow through tomorrow.


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Technology Stocks

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The technology ETF (XLK) is making a move towards resistance again, and all I can say is that this time it better rise above $69.25. We do not want this group failing three times at resistance.


If these two sectors can start working, then I think I would become more constructive on the stock market. For now, I think these moves need to continue to be considered suspect. The way the stock market whips around these days, it makes it impossible to sit back and just ride a trend, because that trend can change direction very quickly.

That’s gonna be it for today. Let’s see what tomorrow brings.

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Tags: #sp500 #biotech #technology #stocks #sp500



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