DJIA: 42,319
A pause … that refreshes? This three-week trading range always seemed little more than that. Even peaks like late January have their prerequisite deterioration – there are V-bottoms, no V-tops. The recent consolidation has not been without some weakness, including five consecutive days down from May 19, one of those 9-to-1 down. And recently we saw a couple of what we call bad up days – up in the Averages but negative A/Ds. A couple of days are just that, even 9-to-1 days. The key from here is not the bad days, rather for those A/Ds to keep pace with the Averages. If the market’s little rest is over, the proof is in what it shows on the upside – it’s about market breadth and expanding volume. Meanwhile, the market seems to have come around to not reacting to every piece of tariff news. We doubt that would hold true for bad auction news.
Trials and tribulations seem an apt description of Biotech. The recent tribulation resulting from a trial was that of Regeneron (483). It’s not just about those trials; the group is what you might call out of favor. Less kindly, they have been down so long almost anything looks like up. However, measured by the XBI ETF (83) the stocks finally are above their 50-day average. They also have a seasonally favorable tailwind through mid-July. This week also saw the Meta (685) deal with Constellation (290) further boost the nuclear space – reactors, uranium, utilities, et al. URA (33) is one of the ETFs there. Meanwhile, look at the Aerospace and Defense stocks as peace does not seem at hand – XAR (195) or ITA (180) are ETFs relevant there.
Frank Gretz
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