Since our last note for Advisor Perspectives, we have seen some more stock market volatility. Readers will recall we traded IBB successfully and have been looking for an opportunity to enter this trade again. We actually traded it for The FRED Report subscribers but did not have the opportunity to write an article in time for publication here.
Let’s give some quick review of our positions. We continue to see this trading action as part of a bottoming process in the broader stock indexes and have been advising subscribers to add positions that are showing positive relative strength. We continue to believe that this bottoming process will end in the fall. Please also note we are going on a European Vacation so this may be the last article we write for a couple weeks.
One of our favorite sectors is Healthcare (XLV) and a favorite sub-sector is Biotech, hence our trades in IBB. Note that per our advice investors can use weakness to accumulate IBB. We view IBB as a range from roughly 120 to 130 and traders can try it on the current weakness. One of the rules in a trading range is to keep trading the range, no matter what you think of the market or even the trading vehicle.
