It feels as if we are back to politics driving the market bus, and everything else takes a seat way in back. The Fed put a cooler on stocks yesterday and we're one week out from a Brexit vote, which still feels like it could go either way. Markets hate uncertainty. We become pessimists. Sell first, ask questions later. On the plus side, it's created a great run in the SPDR Gold Trust (GLD), which should give me a chance to exit call spreads this morning and re-access the position, especially since we are more than $1 through the short leg on the July spreads. It's tricky to say the least.
I've been looking and waiting for some kind of life in the big biotech names, but I'm still finding scary charts more welcoming. Look at Biogen (BIIB) or Celgene (CELG) and you'll see scary. CELG bulls must be looking for some kind of trampoline bounce soon. The stock has lost $100 and the remaining support feels like a trampoline, which means we have an expanding support level. But how far we drop will depend on how much weight and momentum this recent fall carries along with it. I would look for $97 to be the floor, but there has been trading all the way down to $93, and one must account for that. We recently saw a bearish cross on the MACD (blue dotted vertical lines). Bottoms have been made fairly soon after these crosses, but not immediately. The best bet has been to wait until we see the oversold nature of the StochRSI alleviate and we get a bullish crossover in the short-term Full Stochastics.
It isn't just lost leaders, but also false rumors causing pain. Look at Perrigo (PRGO) over the past two days. Bulls from any pre-May period are in bad shape here and suffering. A buyout rumor of up to $20 billion spurred buyers and for a few hours, PRGO bulls were given a huge shot of adrenaline. The stock shot to $110, still well below early 2016 levels, but the potential for $20 billion was too much potential for some to pass up. I would guess some hurting bulls even took a shot at averaging down hoping and praying a buyout pushing the price back to the $130s could get them out at break-even. The market can be cruel, and less than a day later not only has PRGO given up all those gains from a rumor, but is not testing support. We have a false breakout and a rather odd-looking megaphone pattern, both bearish. Momentum is lost and trend is waning. It's possible a break below $97.50 set off a path to new lows. I would expect we see at least $92.50 should $97.50 fail.
I looked at the overall picture on the SPDR S&P 500 (SPY) yesterday and while there were concerns on the daily chart, the weekly chart didn't look all that bad. Bears are doing one heck of a job changing that. Many traps out there, so be a little more cautious.