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Stealth Stock Rally Catches Bears off Guard:Don't Fight the Tape

 Biotech stocks rallied with the general market today with many large caps beating the QQQQ which is up about 1.85% as of midday trading. Within the Rayno Life Science Portfolio today's winners were: Large Caps-Biogen (NASDAQ:BIIB) up 2.4%,Cephalon (NASDAQ:CEPH) up 2.25%, Gilead (NASDAQ:GILD) up 2.25%; Small and Mid Caps-Exelixis up 2.7%, Micromet up 3.2%,Nektar (NASDAQ:NKTR) up 3.65%, Regeneron (NASDAQ:REGN) up 2%, Seattle Genetics (NASDAQ:SGEN) up 2.9%, Targacept (TRGT)  up 5.2%, and Viropharma (VPHM) up 6.3%. The overall portfolio is up 1.25% today with less upside in smaller caps and Tools/Dx.

Stock futures were up 1% before the market opened at 8:30 am surprising many investors as the tape was weak yesterday. The rally was attributed to a constellation of news and commentary items: David Tepper hedge fund manager and Founder of Appaloosa, came on CNBC with his bullish posture that... if the economy recovers equities are the place to be and if the economy falters the FED and QE II will come to the rescue, so it is a Win/Win scenario. The Euro rallied to $1.348 and the trend has been-equity market rallies follow Euro rallies.

David Tepper Is "Balls To The Wall" Long (But Unlevered) The Fed | zero hedge

Other events supported the bull run: Nike (NYSE:NKE) earnings beat, Petrobras (NYSE:PBR) raised $70B, good news from Europe and U.S. manufacturing and the overall change in sentiment due to the Sep rally and the belief that the FED will come to the rescue. Chips made big moves and Silver and Gold hit new highs. Money managers who missed the huge SEP rally need to start thinking about Q4 returns because they are way behind.

Demand for U.S. Capital Goods Rebounds as Spending Holds Up - Bloomberg

Many analysts and money managers are still skeptical citing policy uncertainties,high unemployment, weak housing and overall weak fundamentals. Pundits repeatedly say that investors are scared by the meltdown and the housing bust and are avoiding equities, but has too much money moved to bonds? For today "old school"  analysis is out and monetary drivers and technicals are in.



Disclosure: long Gilead (GILD),Nektar (NKTR)