Eventually it Wears Off

ESPR is a biotechnology issue we traded inside Market Chess Subscription Services successfully on the long side a few months back. We took profits into the move towards $120 as the stock become short-term overheated, looking to buy it back if it set back up again. 

That never happened, though. Instead, ESPR is driving home a lesson lost or not-yet-learned by many in this biotech-led bull run about the inherent risks particular to the biotech sector, what with a massive gap lower this morning from a seemingly benign consolidation.

Sooner or later, biotechs are likely to suffer massive drawdowns not because the underlying, long-term theme is bogus (it is not bogus and the long-term biotech bull thesis is legitimate. Instead, the high beta and extended nature of the entire sector will likely inflict harsh lessons on those who have not yet come to realize the risks inherent the space. 

Elsewhere, I sold the rest of my UGAZ long from $1.97 in front of tomorrow's natural gas inventory report.