The Pharmaceutical HOLDRs, PPH, is a market on borrowed time.  Notice the complete inverse relationship between the daily momentum gauge (down) vis-à-vis the PPH price structure (up) since the September 7 pivot low, which if nothing else is a huge warning signal that the power underlying the powerful upleg off of the June low at 68.21 is running on fumes.  Although in this sector, an announcement in some pharma stock can trigger a pop to the upside on a moment’s notice, the current technical conditions suggest just the opposite – that a disappointing announcement is more likely.  Initial downside target is 76.50/00. 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.