There is no way to sugar coat it or paint a rosy picture. This week could be disastrous for the market. Coming off eight straight down trading days, and the largest weekly percentage drop in the history of the Dow, the economic calendar provides no relief.

Deere Misses Estimates; Genentech Rejects Roche Bid; Crude Rises on Inventory Report; China Fire & Security an Earnings Inferno; Joining Forces to Battle Insider Trading; Best Buy’s Coup; Merrill Slashes Wall St. Ratings; Ford’s European Makeover

As investors plowed into financial and housing stocks in the last few years, they forgot about the pharmaceutical industry, says Jim Nelson in Penny Sleuth.

But now that the party is over, biotech stocks are coming back in a big way. According to mutual-fund research firm Lipper, two biotech funds were amongst the top five best-performing vehicles in July - a dramatic reversal from June when commodities funds were leading the charge.

Big Pharma is buying up promising biotech companies in an effort to boost profit margins. This creates great opportunities for investors, and it’ only just the beginning…

Swiss drug company Roche (OTC:RHHBY) may not get its hands on San Francisco-based biotech outfit Genenetech (NYSE:DNA) as quickly as it had hoped.

Genetech has formed a special committee of independent directors to evaluate the $89-a-share acquisition offer from Roche, which already owns 56 percent of the US biotech firm.

If the deal does go through it may be bad news for Roche and Genentech shareholders, according to Phase 1 Investor editor Rob Fannon in The Growth Stock Wire. But it would be good news for the biotech industry as a whole…

While I believe the bid is a bad move for Roche – and not a great proposal for Genentech shareholders – this mega-deal is actually good for the entire biotech industry… and its investors.

With Genentech gone, the top of the biotech food chain is empty. Many investors will be searching for new spots to park their biotech cash. And sector valuations are on the rise. Both major biotech indexes – the Nasdaq Biotech Index and AMEX Biotech Index – are up more than 7% in just a few weeks.

Small-cap biotechs are cheap right now. So I’d be willing to bet the sector could jump 25% or more in the coming months. And big-cap names like Biogen (NASDAQ:BIIB), Genzyme (NASDAQ:GENZ), and Elan (NYSE:ELN) have jumped to the top of Big Pharma’s short list of buyout candidates.

If you’re thinking of dabbling in the biotech sector, Roche’s bid for Genentech just may be the buy signal you’re waiting for.

Source: The Buy Signal You’ve Waited For

Here’s a quick heads up from Christian Hill at Investor’s Daily Edge on economic and earnings data due this week…