I'm a Net Seller After Trump's Talk

 | Jan 11, 2017 | 1:06 PM EST
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IBB

The Trump news conference was a perfect setup for some market volatility. It really didn't matter much what he had to say -- and reporters didn't even bother asking about boring things like corporate taxes or repatriation of overseas cash. Trump did make a comment about drug pricing, which hit the biotechnology sector hard. That isn't anything new but many were caught by surprise. The iShares Nasdaq Biotechnology Index ETF (IBB) has given back four days of gains and isn't showing signs of bouncing back yet.

The big question now is whether this event has set the stage for a market rollover. The market has been rallying since early November on optimism about new fiscal policy, but it is becoming clear that it may not be quite as easy as hoped to put things in place carefully.

Technically, the indices have been showing signs of stress for a few weeks now. It has been covered up by strength in the FANG names and constant sector rotation, but it has been much harder to find setups for a while now -- and that is the biggest warning sign of all.

Biotechnology has been one of the speculative favorites recently, so losing that group today is not inconsequential. Breadth is just about dead flat, but traders are watching intraday lows now to see if they hold.

I'm a net seller once again, and see very little I'm interested in buying right now.

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