Taking the Pandemic in Stride

This morning's price action is thus far another pretty good example of how successful the unique and persistent strength in the Nasdaq Composite Index can mask weakness not just in many other parts of the market but, as quaint as it may be to note, the real economy at-large. With virus case numbers remaining high in large states like Florida, for example, the QQQ ETF is up 1% as I write this even as the small caps in IWM flip red.  

Seeing the IWM and even Dow lag the Nasdaq is practically a visual motif for this market by now. However, as we have been noting here and playing with Members, the more fascinating aspect of this market is how well some of the virus plays which thrived back during the fear phase back in March which are still coiled up and acting well. 

CODX, below on its daily chart, is a testing play which looks ripe to follow the likes of OPK higher again. Note the long, sideways base since March which spawned a massive rally into May. Another similar move may be imminent. Similar comments apply to PPE plays like APT LAKE, as well as obvious vaccine plays like DVAX INO MRNA VIR, among others. 

Simply put, it should be obvious by now that bears will need a much better effort at taking the Nasdaq down in order to crack this market, since merely keeping IWM and the Dow below the 200-day moving averages, as well as keeping banks, airlines, cruise lines, casinos, and Boeing down have proven to be insufficient at this point.