Biotech Held Well Considering

Europe today

The market ended on a lower note as global growth concerns and new rules regarding tax inversion mergers dominated today’s trade, (see AGN) Additionally, fluctuating oil price and the underperformance of financials (-1.4%) and health care (-1.2%) sectors provided for some continued weakness in the broader market.

Europe got hit hard as the IMF’s LaGarde said that although she wasnt at a panic stage yet, “we are on alert”. You cant say panic and alert in the same sentence when it comes to Europe and expect the markets not to notice.

I don’t have  a lot tonight, but to date we’ve had some nice quick victories in names like EW and ICPT the last couple of days. Not to mention YRD.  I don’t worry too much about short term draw downs, because I know we can always make it back.

Sectors are still rotating as oil and oil stocks get sold again, and biotech and healthcare get a bid, so I will stay on the strong biotech theme for now, or at least until something changes. I’m still seeing the best setups there. For now anyway.  Stay with strength.

AGN got hammered today, down 41 or 14%.  Oddly, it didn’t have an impact on IBB or XBI, surprisingly its not carried in either etf. Who knew? It is however in the XPH etf, which could have done much worse considering.  I think overall that’s a bullish sign how biotech accepted the news.

Hers what happened…….

The U.S. Treasury Department surprised investors after yesterday’s close, announcing new regulations regarding inversion mergers. The new provisions aim to make it more difficult for companies to complete corporate tax inversions through mergers by targeting serial inverters and the potential tax advantages of “earnings stripping.”

I adjusted some stops tonight so here’s the update if you’re playing along at home.

See you in the morning.

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