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MV Weather Report: Big Windfall for Pharma, Biotech


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

The story of the day was the swine flu: Mexico has been hit the hardest, but every country has been put on high alert; cases have been reported in New York City and in Europe.

Almost every major market traded down thanks to the panic, the peso lost 4% vis-a-vis the dollar, and porkbelly futures traded limit down. Two producers of pork, Smithfield Foods (SFD) and Tyson (TSN) also went down on this news.

On fears that travel would decline due to outbreak fears, the airlines sold off: China Southern Air (ZNH), UAL (UAUA) and US Airways (LCC) feel. Royal Caribbean (RCL) was down after Goldman Sachs put out a note saying the cruise industry would suffer the most.

The biggest winners today were pharma names, unsurprisingly: Gilead (GILD) stands out, since the company makes Tamiflu. 3M (MMM) makes the face masks many will be wearing. The biggest moves, however, came in some small biotech stocks: (I would not buy any of these, just pointing out the movers): Novavax (NVAX), Pure Biosciences (PURE), and Quidel (QDEL), to name a few.

The world may be on the verge of a pandemic not seen in over 90 years. But is the market close to falling?

On the Buzz and Banter today, Kevin Depew wrote:

"Below a look at major global indices showing DeMark TD Sequential and/or TD Combo Sell Signals, all are from daily chart viewpoint:

S&P 500
- TD Sequential Sell Signal 4/27; TD Combo Sell Signal 4/17

- TD Sequential Sell Signal 4/23; TD Combo Sell Signal 4/17
Nasdaq Composite

- TD Sequential Sell Signal 4/24; TD Combo Sell Signal 4/17
S&P Toronto Stock Exchange

- TD Sequential Sell Signal 4/24; TD Combo Sell Signal 4/13
German Dax Index

- TD Sequential Sell Signal 4/27; TD Combo Sell Signal 4/27
Spanish IBEX

- TD Sequential Sell Signal 12 (of potential 13); TD Combo Sell Signal 4/17
Italian S&P MIB

- TD Sequential Sell Signal 4/17; TD Combo Sell Signal 4/17"

I find it very interesting that most major world indices are showing sell signals. However, tomorrow is Turnaround Tuesday, and it's very possible the world is overreacting to the swine-flu news. If that's the case, the market may be able to rally into the end of the month.
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No positions in stocks mentioned.

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