NEWS: The major indices closed with modest gains today after investors
digested the March retail sales and were willing to put money back into
the sector. The Dow closed with a gain of 54 points or 0.4% at 12,582.
The S&P 500 bounced 6 points or 0.5% to close within 40 points of
the 1400 resistance level. The NASDAQ added 29 points or 1.3%. After a
rough session yesterday the small-caps got back some of the losses; the
Russell 2000 rallied 1.3%.
THE BOTTOMLINE: Heading into the final two days of the week my thoughts
on the short-term trend of the market were mixed. If the market closed
out the week on a negative note it would lead me to believe more
downside was around the corner. Strength or even holding steady the
last two days of the week would be a bullish signal and suggest more
buying opportunities for investors. With one day in the books, all is
good so far for the bulls. As a matter of fact, we did some buying at
PFG today for our Portfolio Management Clients and anticipate on more
in the coming weeks. I feel there are opportunities in this market for
patient, long-term investors. Successful investors need patience before
buying the stock to achieve an attractive entry point and after the
stock is purchased to give it time to move as anticipated. I will admit
that my patience level outside of the market is non-existent, but when
it comes to the market, patience has been my number one tool.
DAILY ETF BULLETIN - WHAT TO DO WITH BIOTECH?
NEWS: A forgotten sector stole the headlines today after a major
takeover was announced. Millennium Pharmaceutical (symbol: MLNM) has
agreed to be bought by the large Japanese pharmaceutical company,
Takeda. MLNM’s number one drug is a treatment for multiple myeloma, a
blood cancer. Takeda clearly wants to get into the oncology drug
business and this news helped push the other cancer-related stocks
higher alone with the entire biotech sector. The 50% premium paid for
MLNM is taken as a bullish signal for the sector and future M&A.
THE BOTTOMLINE: Today’s rally in the biotech ETFs helped several of
them break above resistance and once again has put them back on the
radar. We bought into a biotech ETF in the Moderate Portfolio of The
ETF Bulletin newsletter in late November and since that time it has
been a laggard. Today’s rally has the stock within 5% of our entry
price and I am now contemplating selling with a small loss or holding
on for a potential breakout later this year. My problem with biotech is
that every year I think it is time for the sector to begin moving, but
it continues to disappoint. The AMEX Biotech Index closed at a new
three-month high today and on the long-term chart it remains in an
uptrend.
