"So what changed between yesterday and today? Biotech (at least my stocks) behaved miserably yesterday given the jump in both the Dow and Nasdaq, whereas today the biotechs were great."
When there isn't sector news, you might look at macro news. DJI, S&P, and NASD Comp were relatively flat today. ^DRG was flat. Bond yields were up a little, indicating some selling.
A short story, of very limited shelf-life, might be that credit risk and bullish (but inaccurate) news about housing shook some people out of bonds, which will fall in price (rise in yield) in a recovery, or in a credit collapse. Looking at an over-saturated cash money-market, and having just exited bonds, investors bought biotechs (and Value Line to a lesser extent). Tonight, Nikkei is way up again, and the $5 rise in gold from today's New York session is being sustained in Sydney and Hong Kong. Since the bond market is much larger than the equity market, cash raised from bond sales can have a big effect on other markets.
Bill Fleckenstein, former SI columnist, used to talk about this kind of action as "moving jello around the plate".
Please liberally discount the innuendo in this comment. I don't know an answer to your question; I'm just trying to point in the general direction where an answer might lie. |
