Can Tech And Biotech Continue To Break New Highs?

Those of you who are new to the Daily, you probably noticed the references to the Economic Modern Family.

Mish developed one index and five sectors as the nucleus of the Family to help you and herself see the real economy as portrayed through a combination of cyclicals and noncyclicals.

She has even gone so far as to create cartoon characters so that you could visualize the most salient sectors of the economy as a Family.

Three of the Family members are what Stanley Druckenmiller calls the “inside of the market.”

These last 3 months, those 3 instruments (Russell 2000, Retail and Transportation) have seen the lion share of money rotation mirroring the optimism for the economy in 2021.

Meanwhile, not to be upstaged, two other members Biotechnology and Semiconductors are also roaring. Both have made new all-time highs.

Only one member, Regional Banks has a long way to go to see its all-time high made in 2018.

The latest edition to the Family is Crypto. Monday’s Daily gave you some analysis.

Crypto was adopted by Granddad Russell 2000 and Granny Retail 2 years ago. They saw both his potential and his volatility and could not help but fall madly in love. But more on that in a future Daily. In the meanwhile, here is a link to find out more about the Family.

Today, we are focusing on Sister Semiconductors (SMH), once again leading the pack, along with Brother Biotechnology (IBB) breaking out from its multi-month highs.

As Covid Cases spike across the country, biotechnology has gained momentum as focus turns to data from late-stage vaccine trials.

In addition, Pfizer and Moderna have applied for Emergency F.D.A approval of their vaccines.

Weekly Chart of IBB

While IBB has broken out from its July high of 146.53, it will need to close above to be a convincing breakout.

It should also be noted that while IBB wasn’t able to close over its previous 146.53 high, it's poised on the edge of its trading range.

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