NASDAQ Biotech Update

I am not sure what happened yesterday, but there was definitely a larger base, a well formed base with decent signals for a nice oversold bounce which seemed to very suddenly fall apart yesterday as if some insider news hit that made it a necessity to call off the party prematurely out of some fear of being caught on the wrong side of the market when this "news" breaks publicly.

Yesterday the market went bat-crazy over the F_E_D's Evans making comments that raising rates at the wrong time (to early) would be disastrous. However last night when another well known dove from the F_E_D, Kocherlakota said essentially the same thing, that rates should not be raised this year and that it will impair inflation's ability to reach the F_E_D's comfort zone of 2%, the market had no bullish response, it actually slid on the comments, whether coincidence or not. Suddenly there's a change in the market reaction in a single day, granted one is an incoming F_O_M_C voting member and the other is a non-voting member. However Bullard's comments as a non-voting member have moved the market in the direction of his commen's sentiment: down once, up twice and sideways once, again he was a non voting member at the time the comments were made.

Biotechs are a pretty good example of what I'm talking about, although the SPY may be the strongest example.

 This is IBB 1 min in which it seems something changed quickly yesterday. As I said yesterday, I wouldn't say the party is over yet as there are still some charts that need to turn, but something clearly happened.

This was a well formed base not only in bios, but the broad market, look at the size of it. According to the size of the base, the move we have seen so far would be the early stages, yet it seems something is already causing them to pack it in early.

While this 3 min chart is really not confirming as it should see a new 3C high, it is not as leading negative as the 1 min which is what I was talking about with SPY and other 5 min charts yesterday, but I suspect we'll see those change today given a bit of time.

Even the reversal process seems it needs to be wider before a downside turn, especially compared to the base's reversal process, but if this is something that is causing fear enough for them to pack it in early, perhaps we won't see such a wide reversal pattern, yet they still have to unload what was bought in the base.

Both IBB and BIB did the same thing as yesterday and showed higher volume on a gap up open, churning. Today it was more noticeable in BIB than IBB, but still there.

I'll continue to update these, I suspect we are close, but I would like to see the longest charts involved in the bounce (mostly around 5 mins) turn like the earlier charts such as the 1 min above.