An Obvious Mask

As promising as a slew of mid-cap biotechnology stocks looked this morning, they now look equally as lethargic on the back of a midday downside reversal on the back of some comments by President Trump regarding drug pricing. 

I still want to gauge the late-afternoon price action, in order to see if buyers are willing to hop back in the saddle to buy the dip. But at the moment, I am putting most new longs on hold. 

And this is all happening as the Dow is still not far from session highs, apparently masking some of the sluggishness below the surface. 

Of course, Netflix earnings tonight and Goldman's tomorrow morning are some known risk events for the market. But the rotation theme into sectors like biotech remains a critical issue going forward, in terms of sustainability. 

The housing sector is another key sector, with even ancillary plays like roofing stocks acting better. 

HOV is a catch-up homebuilder long idea. But the Beazer Homes, also a small cap homebuilder, has quietly been on a tear since just after Labor Day and should be watched for continuation up and out of its daily chart bull flag. 

Similar comments apply to energy and energy-related industrials like Emerson Electric. 

More on these ideas in my usual Midday Video for Members.