I re-visited biotech bottoms in 2009 vs. 2016. What is really standing out to me is that the real biotech low in 2009 was really in 2008, based on following:
- Actual print low
- My account statements from the one who remains nameless
- BBH closing low - influenced by 50% weighting in DNA which was in process of being bought out
The real bottom in 2016 Is Feb 9, solidly by all indices and ETFs (IBB, XBI, BBH, BTK) but there is a secondary low in mid March. All lows were actually in February BUT the broader list was decimated into March. What that means is that this bear still has striking parallels to 2008/2009 with major lows in the same timeframes BUT that this one is weaker recovering than 2009 if we are recovering. With prices for ALL major biotech indices remaining in uptrends form the February price lows and double digit percentages above the Feb 9 lows, I see nothing to indicate new lows are ahead. If broad mkt gets hit, look out.
But right now all key indices are way above lows:
- XBI approaching 20%
- IBB exactly 10%
- BBH 14%
- BTK 17-18%
We also nearly had a major bottoming formation in BIIB AND BBH over last few days. When a market gaps down into a doji and gaps back out the next day, it is called an abandoned baby. We had the gaps and doji in the two mentioned stocks, but the upper tails of the dojis covered part of the prices of the candles to left and right so not quite a signal. A doji is a big range day where open and close are within pennies of each other. Yesterday, we then printed hammers. If broader mkt cooperates, I do believe we move higher.
Oh yeah, if you use BTK or better yet, XBI, despite the 5-6 week later low, we are right on the recovery path of 2009 within a few cents. This recovery has actually been stronger at times but with bigger down moves, even in IBB. I am nit sure how components within IBB may be effecting any of this.
Last point, and most important, even as we have been going down recently, I am noticing differentiation. Yesterday had a large number of sharply higher AND lower stocks with balance between gainers and losers. We had some big all stocks down days last week and the move down was strong but not as bad as mid March to my mind. Intensity was a bit lower. Heare's to broader mkt going back above 2100 please. |
