Rayno Life Science Portfolio: Dx and Tools Update: Caution

Speculative Small Cap Stocks Have Sold Off Since January 3

The Russell 2000 (IWM) was up 5% YTD but the index is down 2.3% today. The NASDAQ is down 2% as of 1:30p EST.Small Cap stocks have outperformed in 2011 so today’s sell off may be a caution signal. Today’s market downturn was triggered by a chip downgrade by a Wells Fargo analyst and oil reaching the $105 level. The Fidelity Select Medical and Equipment Fund (FSMEX) tracks the tools and diagnostics sector well but consists primarily of large cap stocks. It is up 9.4% YTD before today’s action.

The Dx and Tools Portfolio has taken a hit since the mid-January peak. Larger cap stocks with good earnings in the portfolio have held up well:

Alera (ALR), GenProbe (GPRO), Illumina(ILMN) and Qiagen (QGEN).

Small cap speculative stocks have been hit hard after big rallies:

CardioVascularSystems (CSII),Exact Sciences (EXAS) and Sequenom (SQNM)

Model Portfolio