Greece Saved the Biotech Bull Market!

Biotechs rise on Greece ‘No’ Vote!

Amazing news, right? I mean, who would think the news out of Greece would push biotech stocks higher?

But apparently it did. The Greek people let the world know they ain’t interested in more austerity (not that they really had any). Meanwhile, biotechs were the strongest group of stocks on the market to kick off the week in the U.S. markets. There– that’s your proof.

What do biotechs and Greece have to do with each other? Precisely nothing. But this fake headline I drummed up is no more ridiculous than the real ones flashing on your newsfeed right now. The only difference is that I admit my story is B.S.

So no, Greece didn’t magically save biotech stocks. But if you’ve been paying a shred of attention to the markets over the past couple of weeks, the strength in biotech stocks should be of no surprise to you, despite all the bad news…

And I think we could be looking at double-digit gains from here if this train keeps on chugging along…

Here’s how we got here:

After the worst day for U.S. stocks this year, biotechs were the one group that not only stabilized but moved higher. Meanwhile, the S&P 500 finished the first half of the year essentially flat.

“Common sense says the biggest, ‘safest’ stocks in the world should be leading the market if we’re heading into a crisis, right?” I asked early last week. “But that’s not the case at all. In fact, it’s the ‘riskier,’ tech-heavy Nasdaq that’s way out in front. You thought markets were predictable? Please…”

And what’s helping to drag the Nasdaq higher while other stocks languish? You guessed it—biotechs. Take a look for yourself:

Biotech

Just a few days ago, I noted that 70 biotech stocks were in the green on the week–a week where almost every single S&P 500 component was in the red on Monday afternoon. So we hitched our wagon to health care stocks. And these stocks have remained strong in the face of a hurricane of negative news hitting the airwaves.

And so far this week, I’m seeing plenty of juicy biotech names popping up on my radar. More than 80 biotechs gained at least 2% Monday, with five up double-digits on the day. Not exactly a boring market as far as biotechs are concerned, right?

With the way biotechs continue to roll in this market, I wouldn’t be surprised to see many of these names continue to bounce here and make another move toward their highs. Remember, our theme this month is to ride strength.

So we’re sticking with biotech– the strongest horse of ‘em all right now.

Regards,

Greg Guenthner

for The Daily Reckoning

P.S. Stick with strength. If you want to cash in on the biggest profits this market has to offer, sign up for my Rude Awakening e-letter, for FREE, right here. Stop missing out. Click here now to sign up for FREE.