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I am adding a new short position this morning by starting a 1/2-size position in BIS. Nothing has fundamentally changed here over the past month or two though the biotech index has managed to rally 20% over the past month. If there’s a clear bubble anywhere in the markets it’s here. And now public sentiment is shifting against these companies. For this reason, drug pricing is likely to be a campaign issue. Short-term the rally looks to be running out of steam and the longer-term chart suggests the top is in. This recent rally is simply a bounce to test the underside of the broken trend-line.

For more on this sector check out previous posts carrying the IBB tag