December 4, 2017 7:59am

Last week, the sector took a dive, but it could catch the bid if …

A new week drives momentum and traders continue to “lean” on speculation

 

Although expectation is suspect as the oversold are incubating waiting for those considered overbought to be exploited

 

Pre-open indications:  2 SELL and a roll of the dice for the sector

 

Out and about: Biostage (BSTG) the mission statement, “our organization is built on respect for one another and invested in our collaborative success”. Where is the Q3 quarterly filing; in many investors’ opinion, a “financing” scheme to raise even more money is “on” after $30 M was “blown” with NO regulatory results as promised leaving current shareholders with a worthless stock. Also, why didn’t management promote a healthy workplace culture (?) by not reporting inappropriate behavior(s) to its BOD according to former employees and its own CEO? Haven’t shareholders lost enough value to date?

 

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Higher open expected

Dow futures are UP +0.95% (+230 points) and NASDAQ futures are UP +0.42% (+25.75 points)

 

U.S. stock index futures pointed to a strong positive open on Monday, as sentiment was boosted by news that the U.S. Senate narrowly passed a major tax bill over the weekend.

European markets were higher; as investors digested news the U.S. Senate narrowly passed a major tax bill over the weekend.

Asia markets traded mixed, while U.S. futures rose, as investors digested news that the U.S. Senate narrowly passed an important tax bill in the early hours of Saturday.

 

Issues that will affect the trading day: Investors face tough choice as instinct to 'take profits' clashes with December's history of gains

Data docket: factory orders are set to be published at 10 a.m. ET.

Issues on the political front: The GOP however still needs to overcome future obstacles in order for the Senate and the House to craft a joint bill …

 

 

Henry’omics:

From Friday night’s closing bell post, “swish, the sector’s morning’s upside disappeared and then closed to the downside. Was it a bird, a plane, no it was a Flynn, a vote that hasn’t happened and an unsustainable upside. The 11:30 a.m. uncertainty “stigma” re-appeared putting the oversold back in the spotlight”  Do I need to say it yet again, “I told you so” …

For last week the IBB was up +1.07%; while the Dow saw a 2.9% weekly rise, it’s largest since December 2016. The S&P 500 saw a 1.5% weekly gain, the biggest since September. Both the Dow and the S&P have risen in 10 of the past 12 weeks. The NASDAQ fell 0.6% over the week, the biggest weekly decline for the index since 9/8.

I’m still nervous about all the upside with all the geopolitics, tax reform and political issues but, the bottom line issue is the credibility of the news that is presented to investors.

Real issues of spending, operating G&A, the oversight of the board which is usually jeopardized from the beginning by the “independence” moniker of friendly “buddies” of the management team.

Then there are the rumors of which CEOs actually listen to their BODs … or conversely the BODs that are tone deaf to the actual happenings within some companies.

On the other side of the coin, what ever happened to the three (3) sexual harassment (known) issues at Biostage (BSTG) – did they EVER make it to the BOD level – guess not, wonder WHY?

As I had stated, “We've kind of gotten used to the drama in the sector but, what will cure the “believability” disease that is spreading through the retail and individual investor base!”

 

 

In the RegMed and cell therapy sector, Friday closed NEGATIVE, POSITIVE on Thursday while Wednesday and Tuesday and last Monday closed NEGATIVE.

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

·         Friday closed NEGATIVE with 23 decliners, 16 advancers and 4 flat

·         Thursday closed POSITIVE with 11 decliners, 28 advancers and 4 flats;

·         Wednesday closed NEGATIVE with 22 decliners, 18 advancers and 3 flats;

·         Tuesday closed NEGATIVE with 23 decliners, 15 advancers and 5 flats;

·         Last Monday closed NEGATIVE with 29 decliners, 11 advancers and 3 flats;

 

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) is indicating a POSITIVE +0.38% in Monday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is indicating a POSITIVE +0.07% in Monday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Monday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a POSITIVE +1.02% in Monday’s pre-open

 

 

Companies in my headlights:

Biostage (BSTG) closed up +$0.01 to $0.07. Biostage (BSTG) the mission statement, “our organization is built on respect for one another and invested in our collaborative success”. According to former employees, what ever happened to the three (3) sexual harassment issues at Biostage (BSTG) – that we know about, did they EVER make it to the BOD level – guess not, wonder WHY?  But, why didn’t they promote a healthy workplace culture and cover-up inappropriate behavior(s)? -  Maintaining SELL;

Capricor (CAPR) closed down -$0.02 to $1.86 with 492.7 K shares traded after Thursday’s -$0.17 to $1.88, Wednesday’s +$0.13 to $2.05 with 4.39 M shares traded, Tuesday’s -$0.07 to $1.92 and Monday’s $1.99. CAPR had a filing that the FDA has cleared for its IND application to conduct a new clinical trial in boys and young men in advanced stages of Duchenne muscular dystrophy. CAPR still NEEDS to raise cash with its outstanding S-1 with HC Wainwrights – Maintaining SELL;

 ... It's all in the roll of the dice .....

 

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.