For the second day in a row, biotechnology stocks are leading the market higher. We have strong breadth again, and the FANG names are helping out after a day of rest.
Yesterday, we had a similar strong start, but then faded as the day progressed. Some worries have been creeping in that even if the Fed doesn't raise rates tomorrow, they may sound a hawkish tone and open the door for a hike in December. At the moment, the market is unconcerned, but it will be the main focus 24 hours from now.
As I mentioned yesterday, I've cut back some positions for strategic reasons. I'm not particularly bearish, but I want greater flexibility going into the Fed news. In the interim, I'm sticking with some shorter-term plays.
I took a small position in Sarepta Therapeutics (SRPT) , as I believe this will continue to work higher as folks come to understand what is going on there. Trillium Therapeutics (TRIL) has been setting up for a while, and is breaking out today.
Traders are gravitating toward biotechnology, and I'll keep looking for opportunities in that group, but I'm expecting that things will slow more into the Fed news.
Please note that due to factors including low market capitalization and/or insufficient public float, we consider CNAT, GLMD and GALT to be small-cap stocks. You should be aware that such stocks are subject to more risk than stocks of larger companies, including greater volatility, lower liquidity and less publicly available information, and that postings such as this one can have an effect on their stock prices.