ChartSmarter Wednesday Game Plan 3/4/15

Markets slipped somewhat Tuesday a day after the Nasdaq hit and closed above the 5000 mark. The tech rich index was down 1% at lunch time but managed to cut those losses almost in half by 4pm. There has been a lot of talk about the biotech group and its weakness and that sector makes up a decent chunk of the benchmark. Four of the top 14 names in the Nasdaq are GILD, AMGN, BIIB and CELG. A lot has also been made about AAPL’s impact on the index being its largest component at 8%. The 4 aforementioned biotech plays make up just 4.9% of the index combined, so at roughly half that of AAPL, is may not sound like a lot, but the index has a lot hanging on its shoulders. Looking deeper into the biotech group over the weekend I noticed an abundance of names coming public in the group. Sometimes that is an indication of frothiness within a group. Since 12/18 eight companies IPO’ed and perhaps its means with all that rushing to come to the market its time for the group to pause. CELG today rebounded off lows, which intraday were below its 50 day SMA. It is lower 5 of the last 6 days and has pierced that line several times in the last 3 months and recovered. Perhaps its just a matter of time before it does some real damage.