3Q Financial Preview: Macro trumps micro

Biotech, along with the rest of the stock market, has been trading in a range for the last 18 months. That's likely to stretch to 21 months this quarter, as Wall Street watchers say conditions are not ripe for a breakout. They do not see a significant inflow of funds, are generally neutral at best on other market indicators, and think that momentum investors are still on the sidelines.

The problem for bio-tech is that the sector tends to do well when investors feel richer and are more willing to put money into biotech and other speculative investments. Thus, until more profits are created in the broader markets, biotech is likely to tread water...