Let's Do the Limbo

In front of the Fed Minutes later today, equities are trying to fight off one of the weaker overnight futures' sessions we have seen in a few weeks. Small caps are flipping green as I write this, as IWM continues to hold over the $160 level, frustrating bears playing for a more meaningful pullback. 

A main reason why small caps are so resilient is likely due to the persistent strength in smaller-to-mid-cap biotechnology. Indeed, there is quite a bit of overlap between the IWM and the XBI ETF for smaller bios. Various bios like CARA CRSP IMMU QURE, as well as AGIO ARNA BLUE, among others, are soundly in the green and, unbelievably, seem to have some genuine momentum this morning.

In fact, the NBIX chart, below on the daily timeframe, illustrates that this bio has done nothing but "play the limbo" below well-defined resistance (light blue line) over the last week, when there was every reason to back off and suffer damage with the broad market gap down this morning. But now, the hard part with NBIX is deciding whether or not to chase, which reveals more underlying strength to bios. 

IOVA is another bio we are stalking which it not extended, coiling just under its $17 prior resistance. 

Elsewhere, Shake Shake is trying to shrug off both a downgrade, as well as peer RRGB's massive earnings gap down. So far, so good, as SHAK is green. The overall setup remains bullish and I would not rule out a further squeeze higher for what still seems like a hated stock in SHAK.