Replies to post #77048 on $heff's $tation of $tocks & $olid DD

[martych]

I'd be careful with the thought that the $BTK is insulated. I've been hearing for a couple weeks that Bio is due for a significant correction. Look at the weekly chart for past 5 years. You'll see that this index got too far ahead of MA in 2011 and had a big pull back. The average has moved even further ahead of MA now. This type of steep divergence almost always leads to a correction.

Question you have to ask is whether the divergence is due to improved performance or increased multiples. Personally I think it's more multiple than P&L and that the market has been looking for growth in a low GDP environment.