Hey Traders,

The Fed hiked a quarter point Wednesday, and the new chair wouldn't commit to anything past it.

So the market filled in the blank itself: futures now price two more hikes.

Thursday gave us the first look at where money wants to go.

The Nasdaq and S&P 500 reversed the sell-off fast. Crude slipping back under $100 did a lot of the lifting.

The iShares Russell 2000 (IWM) doesn't look so sure.

High yield credit (junk bonds, where lenders get nervous first) bounced hard.

Look closer, though…

Both rallied back into old prices and neither pushed through to new ones.

I call that an exhale. A market ready to rock looks different, and this bounce still has to prove it can hold.

So I went hunting for where risk appetite showed up. By midday Thursday I found it in biotech, especially the equal weight side (where the small names count as much as the giants). SPDR S&P Biotech (XBI) sits right on the trendline it has held all year.

Biotechs live on borrowed money and love lower yields. But six dollar diesel doesn't rank high on the worry list for a company burning cash on drug trials. If the market wants to grab some risk, biotech works as well as anywhere.

Within the group, I want names moving hard on the one-day and five-day but still flat on the 30-day. That combination tells me they've chopped sideways for a month and just started to move. From there I check each chart, look at the option activity, then go dig for a story.

Four small caps popped out: ImmunityBio (IBRX), Absci (ABSI), CRISPR Therapeutics (CRSP), and Recursion (RXRX).

A Shot for the Bald Spot

Absci (ABSI) stands apart from the other three, and I like it for that. Those three look like dead money waking up. Absci ran from March into June, spent two months digesting the move, and turned back up after presenting at Morgan Stanley's healthcare conference this week.

Yes, it has run a lot this year. My 30-day column only asks one thing: has the stock rested?

I see this as a short-term trade, but I still love the backstory. Absci uses AI to come up with a drug for hair loss. They design antibodies from scratch, then run them through a robotic lab to see if the designs actually work.

The last new drug approved for pattern hair loss, finasteride, came out almost 30 years ago. Early data says Absci's version stays in the body for at least 65 days. That means a shot every couple of months instead of a daily pill or topical spray.

Eli Lilly put $40 million into the company this summer. Proof-of-concept data comes in the second half of this year, and another trial starts in the fourth quarter.

Think about what happened to Lilly when they solved for fat loss. This could do the same for hair growth.

Are You Still Watching?

The same sort that found these wake-ups found the roll-overs. Last week, media looked unstoppable. Every name tried to rally, and none made a meaningful new high.

Then this week the whole group rolled over. When an entire sector gets its rally attempt and fails, I leave it.

Netflix (NFLX) looks the worst of the bunch. It trades below its 9, 21, and 55-day moving averages (the average price over each stretch) on the higher time frame, and it couldn't sustain a bounce. No fresh news explains the weakness, and that bothers me.

A stock that falls without news tells you about positioning (who already owns it and wants out). It looks like it wants to test the July lows. New money chases what hasn't moved yet and leaves what already tried and failed.

I’m just wondering if the crew over at the Ticker Highlight Show are going to finally pick one of my trades to ride out with you.

To get the next trade, tap this link and join before Monday at 10:30 AM ET.

Enjoy the journey.

Tim