President Trump's speech on drug pricing confirms what had been leaked earlier. The main focus of the plan is on increasing competition, squeezing wholesalers, strong disclosures and adjustments in the insurance system. But there are no overt price controls, which has been the big worry in the pharmaceutical and biotechnology sector.
I like the biotechnology group on this news and have been adding a bit to my positions in various names, such as Arena Pharmaceuticals (ARNA) . Most of the charts aren't particular attractive at this point but they should shape up as this worry about prices is finally put to rest.
Overall market action is choppy and sloppy. It's a day of consolidation as well as a summer Friday and market interest is low. A close with gains or even minor losses is a victory for the bulls.
I'm not feeling a high level of conviction that this momentum is going to turn into another epic V-shaped move but, for now, the price action is positive and that is what matters. Next week the bulls will have to prove that they have staying power and that we aren't going to suffer the fourth failed bounce since January.
My boys are playing in a travel baseball tournament in Myrtle Beach, S.C., so we are hitting the road a little early. I'll see you bright and early on Monday with some new trade ideas.
Have a great weekend.