Chasing the Chasers

With the upside reversal from this morning gaining traction, it is likely a good spot to not get caught leaning too heavily short into a long, three-day weekend (markets will be closed on Monday for MLK Jr. Day). 

Furthermore, the weak link of the market of late, the small and mid-cap biotechnology issues housed in the XBI ETF, are playing a bit of catch-up to the broad market rally. 

On the XBI daily chart, below, we knew biotechs were rather oversold short-term, but some shorts could not help themselves in terms of chasing them down. We may be seeing the chasing up of the chasers down at the moment.

Recall that part of being "dangerously oversold," as the market has been, is that violent moves can occur both up and down. With names like BLUE XON ZIOP reversing to soundly in the green here, bulls have yet anther chance for a short-term rally, perhaps into next week. 

I will flesh out this idea and plenty more for Members in my usual Midday Video.