October 6, 2017 8:23am
… Is a concept that states "small causes can have larger effects"
Forget, volume, volatility, momentum and relative strength etc. – it’s the credibility of management teams and the reliability of the development platform
Pre-open indications: 6 SELLs and 2 BUYs
What’s the gauge of pricing expectation? It’s called premium content for a reason: I report the truth in “our” universe!
Preview RMi's morning call. You’d be reading this if you were a SUBSCRIBER!
If you had been right as many times as I have been in these many months of 2017 as a SUBSCRIBER you would know when to get in and out or get back in again!
A critical pre-market indication ahead of “our” universe’s open!
DOWN open expected
Dow futures are DOWN -0.06% (-14 points) and NASDAQ futures are down -0.02% (-1.25 points)
U.S. stock index futures pointed to a down open Friday, as the latest U.S. jobs report and speeches by U.S. central bankers get ready to take center stage.
European stocks were lower as investors monitored political events in Spain and looked ahead to new payrolls data from the U.S.
Asia markets rose across the board, ahead of the crucial U.S. nonfarm payrolls data due later in the global day.
Issues that will affect the trading day: Data is expected to keep investors on their toes, as a slew of economic releases are set to be released.
A number of members from the U.S. Federal Reserve are set to deliver remarks Friday. Atlanta Fed President Raphael Bostic and Dallas Fed President Robert Kaplan will be the latest individuals to speak in Austin at the Investing in America's Workforce Capstone conference. Elsewhere, New York Fed President William Dudley will likely be weighing in on the importance of higher education for economic mobility at the 56th Annual Financial Literacy & Economic Education Conference, which is set to take place in New York. Meanwhile in Missouri, St. Louis Fed President James Bullard will be at the Bi-State Development 2017 Annual Luncheon Meeting in St. Louis.
Data docket: The major economic release that will have investors on edge is that of the nonfarm payrolls data, which is set to come out at 8:30 a.m. ET. Along with the average hourly wages and the unemployment rate data, the latest set of nonfarm payrolls data should provide an insight into how the U.S. economy and labor market have been faring as of late, especially with the recent hurricanes that wreaked havoc. Sticking with data, wholesale trade will come out at 10 a.m. ET while consumer credit will be released at 3 p.m. ET.
The cell therapy sector closed barely NEGATIVE on Thursday, POSITIVE on Wednesday, NEGATIVE on Tuesday, POSITIVE on Monday, Friday and last Thursday.
The cell therapy sector’s record over the last 5 sessions (of 43 covered companies):
· Thursday closed NEGATIVE with 21 decliners, 20 advancers and 2 flats;
· Wednesday closed POSITIVE with 18 decliners, 19 advancers and 6 flats;
· Tuesday closed NEGATIVE with 23 decliners, 18 advancers and 2 flats;
· Monday closed POSITIVE with 14 decliners, 26 advancers and 3 flats;
· Last Friday closed POSITIVE with 14 decliners, 23 advancers and 6 flats;
Henry ’omics:
From Thursday night’s closing bell post, “the market roars as the sector belches. Volume is weak as momentum flips to the downside.”
As to the title, the butterfly effect … is similar to “the randomness of the outcomes of throwing dice that depends on precise direction, thrust, and orientation of the throw into significantly different paths and outcomes, which makes it virtually impossible to throw dice exactly the same way twice.
The phrase refers to the idea that a butterfly's wings might create tiny changes in the atmosphere that may ultimately alter the path of a tornado or delay, accelerate or even prevent the occurrence of a tornado in another location.
The butterfly does not power or directly create the tornado, but the term is intended to imply that the flap of the butterfly's wings can cause the tornado: in the sense that the flap of the wings is a part of the initial conditions; one set of conditions leads to a tornado while the other set of conditions doesn't.
Threats, dangers and risks stem from a wide variety of sources, including management teams and markets as well as financial uncertainties, continued liabilities (as to their perception in the universe) and their capacity to understand strategic versus tactical execution.
Had the butterfly not flapped its wings, the trajectory of the share price might have been vastly different <sarcasm>.
The effect presents an obvious challenge to prediction, since initial dangers of the development platform and its market can never be totally recognized.
The issue is can a team of like-minded professionals motivated by their development platform make the right strategic decisions with a smooth tactical execution!
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 up +0.11% on Thursday and is NOT indicating in Friday’s pre-market;
- The SPDR S&P Biotech ETF (XBI) closed Thursday up +0.31% and is NOT indicating in Friday’s pre-market;
- The Health Care Select Sector SPDR ETF (XLV) closed up +0.06% on Thursday and is NOT indicating in Friday’s pre-open;
- The iShares Russell 2000 (IWM) closed up +0.27% on Thursday and is indicating a POSITIVE +0.04% in Friday’s pre-open
Companies in my headlights:
Athersys (ATHX) closed up +$0.31 or +14.49% to $2.45 with 2.4 M shares traded <3 month average = 1.03 M shares>. ATHX has exceeded my contrarian sell signal of 15.9% or a $0.39 premium in five (5) sessions. The stock saw $2.45 on 9/26 and a September high of $2.55 and a low of $1.75 while October began at $2.19. There is a positive aftermarket indication of +$0.08 or 3.74%. Yet, I believe ATHX has a cash problem re spending and NEEDS a financing and there have been rumors of clinical manufacturing batch issues – maybe early, but – SELL;
Applied Genetic Technologies (AGTC) closed down -$0.10 to 4.00 with 188.39 K shares traded <3 month average = 178.1 K shares>. Any news is something as AGTC and the Medical College of Wisconsin (MCW) today announced the publication of data from a longitudinal study that examined measurements of cone photoreceptor structure in patients with CNGB3-associated achromatopsia (ACHM) over time. The peer-reviewed study results appear in the current issue of RETINA: The Journal of Retinal and Vitreous Diseases. The results of this first longitudinal study of foveal cone density in patients with CNGB3-associated achromatopsia provide important information about cone structure and how it may change over time.” These results will help inform current and planned clinical trials to evaluate AGTC's gene-based therapies for CNGB3-associated achromatopsia – BUY;
BioLife Solutions (BLFS) closed up +$0.14 or +2.495 to $5.76 with 215.5 K shares traded <3 month average = 183.7 K shares>. Sooner or later, there will be a big break in BLFS’ upside; what is the value of the appreciator – an offering to have cash on the balance sheet to cover the issues other than a failed past collaboration but, a future investment. And as past rumors seep, if they wanted a cash deal to be acquired – cash on the balance sheet would enhance their viability. This is also a big retail play and I NEVER rely on traders to keep an upside “up”. The aftermarket indication is a negative -$0.06 or -1.04% - Maintaining SELL;
Biostage (BSTG) closed down -$0.0756 or -24.99% to $0.2269. BSTG has been delisted from NASDAQ effective 10/6/17 to trade on the OTCQB, Pecos investment is in the wind and that ain’t all, what a MESS! The Bottom Line ... Despite BSTG's timely efforts to meet each new demand of Pecos, Pecos has not met its obligation to deliver the Purchase Price. BSTG believes that Pecos has acted in bad faith and, despite the satisfaction of all closing conditions, has no intention of delivering the Purchase Price as required by the Purchase Agreement. BSTG is reviewing all of its rights and remedies against Pecos that may be available to the company. Ramifications: As a result of Pecos' refusal to deliver the Purchase Price, BSTG is facing significant capital issues, as its current financial obligations exceed its cash on hand, and is exploring financing and other strategic alternatives. BSTG is in discussions with its advisors regarding these alternatives and cannot provide any assurance that it will be able to obtain sufficient financing. On October 5, 2017, Saverio La Francesca, MD resigned as President and Chief Medical Officer of the Company, effectively immediately – <it’s about time, he was the cause and correlation in my view of these troubles>.I have MAINTAINED a SELL based on the erratic conditions within the company and its management team - Maintaining SELL;
Mesoblast (MESO) closed up +$0.43 or +7.14% to $6.45 with 49.2 K shares traded <3 month average = 33.7 K shares>. I like the company but it has a target on its back after being up on Wednesday to $6.02, Tuesday’s $5.77, and Monday’s 5.80 after last Friday’s $5.48 and the previous Thursday’s $5.44. It also fits my premium threshold of being up +15% or +$0.97. The aftermarket indication is a negative -$0.25 or -3.88% - SELL;
Cesca Therapeutics (KOOL) closed up +$0.02 to $4.43 with 159 k shares traded after Wednesday’s -$0.40 or -8.32% to $4.41 with 366.9 K shares traded after Tuesday’s +$1.22 or +33.98% to $4.81 with 3.8 M shares traded <3 month average = 155.2 K shares> after Monday’s +$0.03 to $3.60 with 2.7 K shares traded. After a USPTO Notice of Allowance regarding a pending patent on Tuesday; the Icarus stock effect went into play. October started at $3.60, September at $3.43 with a low of $3.25 and it began at August at $3.67. The aftermarket indication is a negative -$0.06 or -1.36% – Maintaining SELL;
uniQure NV (QURE) closed up +$0.36 or +3.51% to $10.61 with 260.9 K shares traded <3 month average = 137 K shares>. AMT-130, its proprietary gene therapy candidate for Huntington’s disease, has received Orphan Drug Designation (ODD) by the U.S. Food and Drug Administration (FDA). There are currently no approved medical treatments aimed at addressing the underlying cause of Huntington’s disease, and AMT-130 has the potential to play a role in this area of high unmet medical need. - BUY;
Vericel (VCEL) closed down -$0.67 or -11.30% to $5.30 with 4.32 M shares traded after being up Wednesday +$0.03 to $5.95 with 597,2 K shares traded following Tuesday’s +$0.10 to $5.95 with 1.26 M shares traded after Monday’s -$0.15 to $5.85 with 219.6 K shares traded following las Friday’s+$0.40 or +7.14% to $6.00 with 2 M shares traded <3 month average = 545.1 K shares> September started at $4.35 with a low of $4.30 having hit $4.85 and $4.95, three (3) times each while August started at $3.13 with a low of $3.00 and a high of $4.30. As Q2 ended, July started at $3.40 with a low of $3.10 and a high of $3.50. The upside was a little too swift and traders will take some profit. VCEL is going to NEED a financing ($14.04 M as of Q2’s end) especially with $10.16 M in debt on the books. The aftermarket indication is a negative -$0.10 or -1.89% - 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.
