Should the Fed do nothing to defend (devalue) the US dollar in the global currency wars, or worse, raise rates by the September 2015 Fed meeting, the economy will likely crash. Even if the Fed does nothing, the prospect of rate hikes amid a slowing US economy as we enter the weakest 6 months of the year (May - Oct) could be enough for a large correction. If the market does correct, biotech stocks will likely come crashing down. In fact, biotech stocks will lead the market lower as traders move from a risk on to a risk off market.
Most biotech stocks have high debt and no sales. They exist on the promise of something big in the future. They are the stocks that shine in a "risk on" market, and not a rising rates "risk off" environment.
A way to short biotech stocks in the event of a biotech bubble burst is in BIS.
We are already seeing traders position for a burst of the biotech bubble as evidenced by the explosion higher in trading volume on BIS. BIS has done a candle over candle reversal, and has even confirmed the reversal. Still, extreme caution is warranted with stops just below support.
Most biotech stocks have high debt and no sales. They exist on the promise of something big in the future. They are the stocks that shine in a "risk on" market, and not a rising rates "risk off" environment.
A way to short biotech stocks in the event of a biotech bubble burst is in BIS.
We are already seeing traders position for a burst of the biotech bubble as evidenced by the explosion higher in trading volume on BIS. BIS has done a candle over candle reversal, and has even confirmed the reversal. Still, extreme caution is warranted with stops just below support.