The Patient is Still Sick



The leading parts of the market, dating back several quarters, are largely under heavy selling pressure again this morning.

Because of this, I am lightening up on my longs inside 12631, as breakout plays are largely suspect amid the ongoing carnage in the biotechnology sector, for example. Small caps are also a huge concern.

On the biotech daily ETF, updated below, note the potential now for a massive head and shoulders top spanning all of 2014, heretofore (light blue lines).

Any way you slice it, biotechs had become too extended longer-term, as we have been arguing for a while now.

I am seeking to finally pounce on some shorts I have been stalking for a while, such as Starbucks, if the weakness persists broadly.

Despite the S&P hitting a new all-time high once again this morning, it is as an unhealthy series of all-time highs as you will likely ever see, given the action in the leaders.



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