What I am not showing here is, that the Cyclicals are losing steam, Sensitive Market is in neutral trend, Defensive has been the buyers paradise since OCT 2014.
Why I think that this can be called as a Biotech Bubble is because, It has done the same exact thing Financials did in 2007. ie., Moved tooo quick tooo far.
Yes Bio Tech (Healthcare) sector is a defensive sector, but this is not "the normal" on a defensive sector.
What could fuel this bubble burst ? That's up to the Govt, and the Medical Insurances out there. Most Medical Insurance at this point is so frustrated with the high Drug / Healthcare provider prices.
//////////////////// Note : This is not a Doom and Gloom Idea to trade. Its just my opinion - I am personally taking cautious actions with the market, that is reducing the risk to 1% or under in a trade. And focus on the Strong and Weak Sectors, Rather than the mixed bag.
This may not happen until second quarter of 2015, or even mid 2015. While the trend is up, I am still bullish. Until there is a transition.
The Very long term outlook is that, The Fight for the current deflation will reverse and we will start to face a inflation - Making the Commodity based Sectors to be Bullish again. With new highs on Gold and Oil. Advice is to just be prepared to face it. I will start to accumulate a piece of GOLD etf. GLD or IAU. Rather than the "IOU" that i currently have in my bank. That will be a long term Plan, provided all plays out -
jangseohee
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Bull flag symptom?
UDAY_C_Santhakumar
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Well, Technically how this will play out in my opinion - A Weekly Momentum Divergence, which will pull it away from the current trend, then a bounce and then Major Divergence will start to play out. Provided the Major Divergence does not breakout.
QuantitativeExhaustion
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You should also put up the Biotech ETF
UDAY_C_Santhakumar
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oops, I think I missed it. I was comparing the IBB with the XLV, Obviously IBB is way over extended.