Biotech on the Comeback Trail

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Key Takeaways

  • Trends & momentum remain negative for US Equities and could weaken further into next week ahead of the long-awaited December bounce & start of the Santa rally
  • Flat Breadth is far better than Tape action would imply Friday given strength in Healthcare, Real Estate, and Communication Svcs.  Technology weakness not too severe but is being overshadowed by large-Cap “FAANG” weakness which is lagging the broader market
  • Biotech starting to show relative strength and can bounce as part of a mean reversion play within the strengthening Healthcare group into 2022

Friday’s $SPX pullback to the lowest levels since early December makes a rally back to all-time highs still a bit premature, technically speaking.  The early weakness did manage to make a stand near 4600 which will be incredibly important to hold heading into next week.  Any breach of this level has little to no real support until 12/3 lows near 4495-4500 but is thought to have an outside chance of breaking this level which should prove temporary.  The big zone of support for SPX comes in at 4360 up to 4410 and is thought to be an area to buy, if hit anytime between 12/22-12/24.   Moving strai...
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