Since the scope of this blog is not political related, I avoided posting about this issue but is evident it is having a ST effect and will likely produce more ST effects once is resolved. What I do like to analyze is Market data itself:
Hottest stocks where Health care related too
As Friday close we could see that Health related services and products were relatively strong as they have been during last month BUT all remaining sector did show weakness of Friday. We can read this in two different ways:
- Traders are covering long positions overall to go long in Health care sector (betting the bill will not pass probably???)
- Traders are being sucked into Health care sector, as they have been during many days, attracted by their great performance BUT if bill does pass, and Big Boys unload all the stocks they have been accumulating during this rally, the outcome will not be pretty for bulls....
- Another item which support this last hypothesis is the remarkable weakness of all small cap indices which is quite logical if we think what kind of companies will be most negatively affected by a new health care law (small companies will have comparatively higher health insurance's costs)
