Today was a great reminder of how quickly market sentiment can change.
Last Friday morning biotech stocks were the darlings of the momentum crowd. Three sessions later they are being treated as toxic sludge: the high quality biotech names like CELG or BIIB shed 4-5% today, while many of their more speculative junior cousins were literally taken out to the woodshed and lost anywhere between -12% to more than -20%.
More worrisome for bulls is the fact that the above is just part of an overall and broad return to risk-off mode. All major indices and sectors came under significant pressure today. The Russell led the decline with a -2.4% drop on big volume.
Energy was the only sector to resist today's sell-off, but it is very doubtful that this sector alone can carry the market.
Today's price action brings the "Fed" uptrend that started exactly a week ago very much into question. Today was just the first day of selling and we would be wise to expect and be prepared for additional downside.