MARKET OFF TO ANOTHER BAD START -- FOREIGN CURRENCIES SURGE AGAINST DOLLAR -- BIOTECHS AND DRUGS CONTINUE TO ATTACT DEFENSIVE MONEY -- DNA BOOSTS BIOTECH HOLDERS -- ABT AND JNJ ARE BIG PHARMA LEADERS
FOREIGN CURRENCIES JUMP ... The U.S. Dollar is coming under a lot of pressure. The most significant drop is against the Euro which touched a new record today (Chart 1). In fact, all major currencies are rallying against the dollar. Charts 2 through 4 show upturns in the British Pound, Canadian Dollar, and Swiss Franc. Chart 5 shows the Japanese yen trading back over its 50-day average for the first time in three months after bouncing successfully off of its 200-day average. Dollar weakness is giving an added boost to most commodity markets which are rallying, That's especially true of precious metals. Chart 6 shows Silver iShares in an uptrend (as is gold). Outside of precious metals, the only other stocks in the black are in the healthcare sector. Biotech stocks are still hot. Some large drug stocks are also attracting new money.
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BIOTECH HOLDERS NEAR 52-WEEK HIGH ... We've been highlighting recent buying in biotech shares which is continuing. Biotechs are the day's top group (in a very weak market). Chart 7 shows the Biotech Holders nearing a test of their October high. Among today's biotech leaders are Biogen Idec, Gilead, Genzyme, and Amgen. Genentech is the biggest holding in the BBH. Chart 8 shows that key stock gaining 5% today.
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BIG PHARMA LEADERS ... Although big drug stocks aren't attracting as much attention as biotechs, some of the bigger ones are doing quite well. Chart 9 shows Abbott Labs trading at a new five-month high today. Its relative strength line is at a new high. An even stronger chart pattern belongs to Johnson & Johnson. Chart 10 shows JNJ testing its November/May highs at 68. An upside breakout appears imminent. Its relative strength has already broken out. Those charts show that investors continue to shift to the defensive qualities of gold and healthcare stocks.
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