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It is worth remembering that the biotechnology stocks started off 2012 with a very powerful move supported by expanding buy volume. For the month of February, the biotechs corrected sideways, through time, like many areas of the market. Considering how high beta the sector tends to be, the high and tight bull flag on the weekly chart of IBB, the sector ETF, is even more impressive than usual. Note how the 2011 highs have been clearly held above, despite the occasional shakeout with the shadows on those weekly candles.
The next price trigger would be a move through $122 on the IBB with buy volume coming back in, although the overall volume pattern has remained bullish.

I want to constantly remind myself that when a sector shows immediately strength of this magnitude to start the year off, it is a distinct possibility that the biotechs will be one of, if not the, leaders of the bull going forward.

Members of The PPT and 12631 can click here to see individual biotechnology ideas, sorted by up-to-the-minute PPT Technical scores.

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1. More of the same volatility in global markets, with fits and starts caused by an ongoing secular bear market combined with easy monetary policy.
2. Barack Obama wins re-election in November not because he is a great president, but because Republicans continue to miserably fail to connect with the silent majority of Americans.
3. Tim Geithner steps down as Secretary of the Treasury, paving the way for Michael Bloomberg to eventually replace him.
4. After Facebook IPO’s, several prominent social media firms are discovered to be Ponzi schemes.
5. Mega-cap Dow stocks such as Wal-Mart and Microsoft outperform the likes of Apple and Priceline.com to the upside.
6. Berkshire Hathaway (“A” shares) is the best performing stock in 2012 for any firm with a market cap over $50 Billion.
7. Tensions and acts of aggression continue to rise in the Middle East, causing wild fluctuations in the oil markets. However, there is no clear trend in oil for the year and it remains a short-term trader’s market.
8. As extended government safety-net benefits run out and unemployment remains stubbornly high, crime increases dramatically in urban centers and suburbs. In particular, New York City and other major cities along the Eastern seaboard become the dangerous places to live not seen since the 1980’s.
9. New York City approves a major casino to open in Manhattan in order to generate massive revenue, further reinforcing #8.
10. The Mexican drug cartel continues to dominate the southern border of America, effectively owning southern Arizona and New Mexico. However, Republicans and the mainstream media fail to adequately confront the current administration about it, and we see a replay of the drug cartel situation in Miami from three decades ago.

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