Froth is perceived by most analysts. The problem with that: skeptics generally, as you know, used that overpriced argument for a rationale to be negative for months. It will be valid at some point, as for now the rotational froth continues, and fighting this market has been more than merely 'fighting the Fed' (though they do that too). 

During all this time, since nailing the 'max-panic' March washout low, I have migrated from out-right enthusiasm in the Spring, to a bit of caution periodically, with hopes for (and got) a rotational sort of sequential sector shifting, which is exactly what held the S&P and Dow together through all this. It is extended of course, but persists.    

Executive summary:

• Market grinds higher, denying an S&P double-top, by successful rotation, so a bit of a pullback and we continue in this 'rope-a-dope' (great description from one of the members) market.

• More vaccine hopes tempered by 'half-life' considerations, prompting a greater focus on particular vaccines or treatments that can complement vaccines.

• The techniques vary between T-Cell boosters for the immunocompromised or the elderly, to the opposite as immunomodulators to retard ARDS lung issues.;

• Astrazeneca's (AZN) vaccine apparently did awaken a T-Cell response; suggesting a vaccine specifically targeted to do so might have more efficacy; since there is a bit of criticism of the half-life of neutralizing antibodies in the data reported;

• That's the focus of Heat Biologics (HTBX) I wrote about in recent days (and below in the second section), also one of multiple candidates from Sorrento Therapeutics (SRNE).

• For the initially-cleared into Phase 2 testing by the FDA, Sorrento has what we think is tremendously important if it's effective enough; a PILL to treat COVID-19.

• IF this works and keeps people out of the hospital; SRNE will not be just a $10 stock (it's not even there yet, that's tomorrow, then pause, then likely higher).

• Furthermore, Sorrento's CEO implied an openness to partnership or takeover, so despite some profit-taking as invariably occurs after post-close interviews, I'd not be surprised if that's so limited, nobody will see our 4 +/- entry price again.

•  Another possibility is Athersys (ATHX) (also noted on the weekend), with stem-cells a prospect in COVID-19 for ARDS and in a number of other diseases, today Trump mentioned he likes therapeutics better than vaccines (not sure whether that encourages or discourages me), but he's focused on that and no idea if he's thinking in terms of 'stem cell' work.

• ATHX is probably a speculative hold for an eventual sign to progress further, of the 3 primary stem-cell firms, this is the only American one (Cleveland).

• Tomorrow may be a bit skittish but we see this market moving higher even as the case counts do as well, and it's not incongruous as to how this battle rages both for humanity and the weapons to fight this horrendous plague.   

In-sum: In Monday's action, the NYSE breadth was slightly negative, but that's not negative, because it reflected a rotation back from Industrial Materials and 'average' stocks to the usual suspect 'super-caps', which just completed a brief consolidation from an extreme 'ascending wedge', such as both NASDAQ & NDX charts showed. For the moment this wedge exists only in an extreme comparison to multi-decade charts, it is not that kind of pattern, even as they are at new highs, presently.

Hence yes some sectors or stocks within them are overbought, but they hang tough when put on the defensive, against a backdrop of a world of liquidity chasing, just for now. So the difference (and that applies to several newly-hot biotech's too) between our view of this and others, is we see the structure and extended nature of some, but we have viewed this backdrop for several reasons as allowing corrections, not heavy catastrophes, which is not to say that's not a possibility down the road. For now we'll enjoy not just appreciation in positions, but not being beat-up like the short-sellers.  

Bottom-line: The upside was supported by big techs (including our AMD favorite as 'pick of the year for 2019' from 16-17 the prior year), IBM (which had better numbers after the close); and the late recovery in oil. Healthcare was mixed; while biotechs in the secondary realm actually did quite well generally, and are really at the helm.

Of course speculation dominates, so those who play COVID-19 sectors tend (at least my thinking) to not bet big on just one horse so to speak. In-fact when the data released by Astrazeneca suggested T-Cell modulation accompanied neutralizing antibodies, everything rallied. Why? Because it means achieving that suggests 'other' biotech's focusing on treatments, specifically targeting T-Cell proliferation or activation, might do even better as 'complimentary' indications to vaccines; as my weekend briefing sort of suggested the modality that might play-out (and we don't know as of yet).