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MV Weather Report: Sunny Skies Ahead for Big Pharma?


Rain or shine, we review the day's biggest stock stories.

The S&P 500 has now pulled back for 3 days - the first time that's happened since the rally began back in March.

Today's session was pulled down by retail sales, which came in worse then expected (the first time that's happened lately). The consensus called for 0.0%; the actual number was -0.4%.

Most stocks were down across the board, but some winners did emerge. The ag's traded well again, led by Potash (POT). The drug stocks also showed strength across the board, including Merck (MRK), Johnson and Johnson (JNJ) and Pfizer (PFE). Oddly enough, these are the same stocks that were up yesterday. Is a trend emerging? Buy hard drugs and grow grass?

Today on the Buzz and Banter, Professor Jeff Cooper gave his thoughts on where the S&P may be headed from here:

"Those of you who are familiar with my stuff and are readers of my report will recall that 882 S&P is a pivotal and significant level.

"Why? It is a "master square" meaning it is on the same vector as the all time high of 1576. It is an geometric harmonic of the all time high being 5 squares or revolutions of 360 degrees below 1576.

"What conclusions can we draw? That, this is a level to observe the final arbiter--the price action at this level.

"It is also interesting that 882 is near the level of last weeks low. So we are testing last weeks lows and the 20 dma and an hourly channel as shown in the morning report.

Click to enlarge

"The behavior if and when the Weekly Swing Chart turns down will be an important tell. The Weekly Swing Chart has only turned down once since the March low and that turn down defined a low. It will be interesting to see if we get a change in behavior and tenor on any new turn down."

Oddly enough, 882 was the low today for the S&P. If you're feeling bullish here, this might be a good place to add positions - between 875 and 890 on the S&P.

All right, Minyans - heads up tomorrow on PPI at 8:30 am ET. Current estimates call for 0.1%.

Also, how about those Lakers last night? Dominating, just like the bears did today. Have a great night!
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No positions in stocks mentioned.

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