August 16, 2017 7:16am

 

Mr. 15% … says if you don’t see clearly or feel it…

Don’t chase a sector trade

 

Pre-open indications: 2 BUYs and 3 SELLs  

Q2 results, we have heard from thirty seven (37) so far and many a “message” was ineffective!

 

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Critical indication ahead of “our” universe’s open!

 

 

Higher open expected

Dow futures are UP +0.21% and NASDAQ futures are UP +0.25%

 

U.S. stock index futures pointed to a positive open on Wednesday, as investors shifted their attention to the upcoming FOMC minutes as turbulence in the U.S. political space continued to rumble on.

European stocks were higher, as geopolitical tensions regarding the Korean peninsula eased and investors tracked a muted performance overnight on Wall Street.

Asian shares closed higher as investors digested earnings releases from regional corporates and resurgence in the dollar.

 

Data docket: Set to come out at 2.00 p.m. ET, investors will pore through the meeting's minutes to see what the Federal Reserve currently thinks about the state of the U.S. economy, and where their strategy could be heading.  Aside from the Fed, housing starts, building permits and the New York Fed's Business Leaders survey are set to be released at 8.30 a.m. ET. Mortgage applications are due out at 7 a.m. ET.

Political issues that affect the trading day: While North Korea tensions may have shown signs of subsiding; President Donald Trump faces criticism from his latest set of comments surrounding the recent white nationalist rally in Virginia. In the president's latest news conference on Tuesday, Trump went on to again blame "both sides" for the deadly violence and chaos seen in Charlottesville over the past weekend.

 

 

The cell therapy sector closed POSITIVE on Monday, Friday, NEGATIVE on Thursday, Wednesday and last Tuesday.

The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):

·         Tuesday closed NEGATIVE with 24 decliners, 15 advancers and 4 flats;

·         Monday closed POSITIVE with 12 decliners, 28 advancers and 3 flats;

·         Friday closed POSITIVE with 14 decliners, 28 advancers and 1 flat;

·         Thursday closed NEGATIVE with 33 decliners, 8 advancers and 2 flats;

·         Last Wednesday closed NEGATIVE with 31 decliners, 10 advancers and 2 flats;

 

 

Henry ’omics:

As I had stated the evening post, “flop and fly down - Forget the “Blues Brothers”

… When I get the volatility virus, I flop open the “barf” bag

… When I get totally fed up with momentum condition, I flip the trade

 

The sector is tired and so am I of those companies that are NO better than PONZI schemes!

 

 

You’ve made it to the office, turned on the monitor, having just gotten your coffee and it hits you - what could be today’s trades? 

Watch list:

  • The iShares Nasdaq Biotechnology (IBB) closed down -0.09% on Tuesday and is NOT indicating in Wednesday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) closed Tuesday up +0.01% and is indicating a POSITIVE +0.69% in Wednesday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) closed down -0.03% Tuesday and is NOT indicating in Wednesday’s pre-open;
  • The iShares Russell 2000 (IWM) closed down -0.81% on Tuesday and is indicating a POSITIVE +0.33% pre-open on Wednesday

 

Q2/17 reporting for … thirty seven (37) so far to date:

Regenerative Medicine Earnings Scorecard - Q2/2017 - to date … http://www.regmedinvestors.com/articles/9841

 

Companies in my headlights:

Biostage (BSTG) closed down another -$0.0642 to $0.35 after Monday’s $0.42 (-$0.09 or -17.71%) after Friday’s $0.51(+$0.0003), Thursday’s $0.51 (-$0.049) and last Wednesday’s $0.56 (-$0.03). Another S-1 for priced at $0.31 5, what is this … the third or fourth down financing. The newest now, the Cellspan esophageal product is no longer going to have an IND filed in Q3 as promised for the last 2 years. No response to its filed dismissal of a terminal death suit … a telling reminder of its first failure and a potential death knell as the architect (its CMO and president) of multiple failures is elevated to the BOD. The new lead program, pediatric atresia; this is strange to now go after pediatric esophageal atresia; there is an approved device by Cook Medical – another rope-a-dope?  How hard is it to provide the relevant facts to the status of the company, to tell the truth, management has a fiduciary and … legal … responsibility? – Maintaining SELL;

BioLife Solutions (BLFS) closed up +$0.16 to $3.96 after Monday’s flat at $3.80,  Friday’s  $3.80 (+$0.20) post Q2 results after Thursday’s $3.59 (-$0.06), Wednesday’s $3.66 (-$0.05) and last Tuesday’s $3.70 (-$0.05). BLFS is getting too RICH, having started the week at $3.48, July at $2.62, June at $2.15 and May at $2.02. BLFS restructured its debt and will report Q2 financial results on 8/10. Be prepared for an OFFERING – SELL to BUY on aftermarket indication of +$0.24 or +6.06%;

Bluebird bio (BLUE) closed up +$0.45 to $97.05. The aftermarket indication is a positive +$0.35 or +0.36%. A true contrarian, as there wasn't any news released during the July which started at $105.30 and ended at $94.25 or so far in August that started at $69.15; can help to explain the roller-coaster move be explained other than volatility. I foresee a dip – SELL;

Mesoblast (MESO) closed down -$0.07 to $6.99 after Monday’s $7.06, last Friday’s $7.13 and Thursday’s $7.20. News is an activator for MESO, over 250,000 Anterior Cruciate Ligament (ACL) tears occur annually in the United States alone, mostly in young, physically active adults. By 1 year, more than 30% have radiographic evidence of knee osteoarthritis (OA) and by 10 years, more than 50% have clinical OA (pain and loss of function), irrespective of ACL surgical repair. A single intra-articular administration of Mesoblast's allogeneic Mesenchymal Precursor Cells (MPCs) within 4-6 weeks of ACL repair was associated with reduced cartilage loss and bone changes by 6 months and in improved pain and function for over 2 years. The anti-inflammatory and immunomodulatory activities of MPCs may protect against the release of damaging factors in the inflamed knee joint and prevent the breakdown of joint connective tissues, providing a plausible mechanism for the observed clinical findings – BUY;

Kite Pharma (KITE) closed up +3.84 to $126.80 after Monday’s $122.86 (+$2.82). KITE reported narrower-than-expected loss in the Q2 and beat estimates for sales. Since 1/3/17, KITE’s stock is up approximately +62.6%, KITE is getting a little too rich and there is a negative aftermarket indication of -$1.06 or -0.86% - Maintaining SELL;

 

 

Opinions expressed are those of the author and are subject to change, and not intended to be a forecast of future events, a guarantee of future results, nor investment advice.

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.  All investments are subject to risks. Investors should consider investment objectives.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.