February 6, 2018 5:55pm
Sector intelligence and perspective
The sector opened down, flip-flopped up/down by the hour, jumped the largest at around 3 p.m. and closed to the solid upside
Algorithms and leveraged derivative products such as ETFs and ETNs (volatility products) combined with investor complacency stimulated that latest “bubble” effect
The sector must have been wearing a fitness tracker with all the steps it jumped to be ready for the upswing trade
Gene therapy companies rebounded … the callout to AST (+$0.05) saw some appreciation, it’s better to be flat in this market than a splat while Capricor (CAPR -$0.01) dives needing needed financing to fund ANY trial
Pre-open indication results: 3 HITs and 13 MISS (sure beats the a.m. signals)
Out and about: Biostage (BSTG -$0.027) filed an SEC Form 6, funny how their Chairman of the Board, John F. Kennedy was NOT listed … more
Gene therapy companies rebounded in the sixth (6) session after a five (5) session downdraft due to possible risks of high systemic dosing of AAV – the players … AGTC ($0.00) was flat, ADVM (-$0.50) was down as AVXS (+$1.04), BLUE (+$5.60), SLDB (+$0.48), ONCE (+$0.24), BOLD (+$1.47), RGNX (+$1.20), and QURE (+$0.80) experienced the flip to the upside
Tuesday’s results have implications to Wednesday’s sector activity as a daily report may say little or a lot and it serves as insurance that all indications are being examined and evaluated!
Henry’omics:
From the pre-open’s newsletter, “…the tumble down game … Traders try to pull out the sticks without letting any other sticks tumble down while algorithms topple the pile in one felt pull. Thematic of the day: Hold it, hold it and hold that BUY button until you see the green of the incline.”
As I had stated, “Follow the factors and fundamentals if investors want to know who to “play for a rebound”! It’s always a responsive test of risk tolerance; we all want an immediate sector top but remember there is downside risk and with its own realties.”
Much of this week's market tumult arose from huge losses to exchange-traded products that work off volatility.
Two exchange-traded notes (ETNs) have attracted much attention: the ProShares Short VIX Short-Term Futures and the VelocityShares Daily Inverse VIX Short-Term ETN. Both trade using leverage and provide inverse returns to the market's "fear gauge" known as the Cboe volatility index — the VIX. When the VIX falls, the two products rise. When the VIX soared Monday, both securities suffered severe losses. <CNBC>
The ProShares fund lost another 84% Tuesday, while trading in the Velocity note was halted.
I welcomed the upside, disdaining the effects of the leveraged products (ETFs and ETNs)!
Rapid selloffs, such as the one today, can also be followed by sector bounce-back as liquidity gets exhausted by programmatic selling. The ongoing market selloff ultimately presents a buying opportunity.
The rapidity of the sell-off and the resulting buy-up is also an indicator of DANGER – check your fundamentals!
The advance/decline line scenario of 40 SCGT & RT covered companies:
· The open was positive with an A/DL of 21/15 and 4 flat ;
· The mid-day was negative with an A/DL of 13/23 and 4 flat;
· The close was positive with an A/DL of 25/12 and 2 flat;
Pre-open indication results: 3 HITs and 13 MISS
- Athersys (ATHX) closed up +$0.05 – miss;
- Applied Genetic Technologies (AGTC) closed $0.00 - hit;
- AxoGen (AXGN) closed up +$0.55 - miss;
- Capricor (CAPR) closed down -$0.01 - hit;
- Cellectis SA (CLLS) closed up +$1.21 - miss;
- Fate Therapeutics (FATE) closed up +$0.15 - miss;
- Intrexon (XON) closed up +$1.01 - miss;
- MiMedx (MDXG) closed up +$1.20 - miss;
- Spark Therapeutics (ONCE) closed up +$0.24 – miss;
- uniQure (QURE) closed up +$0.80 - miss;
- Sangamo (SGMO) closed up +$0.85 – miss;
- Vericel (VCEL) closed up +$0.10 - miss;
- Verastem (VSTM) closed up +$0.10 - miss;
- Asterias Biotherapeutics (NYSEMKT: BTX) closed up +$0.05 - hit;
- Histogenics (HSGX) closed down -$0.12 – miss;
- Pluristem (PSTI) closed up +$0.01 – miss;
MY working trend lines:
… The greatest volume to the downside: JUNO, ADVM, IMUC, NWBO and CAPR
… Upside volume was weighted to: XON, SGMO, MDXG, VCEL and CYTX
… Biggest $ downside: RENE.L (-$11.26 after a 1-for-100 reverse), ADVM (-$0.50), MESO (-$0.24), JUNO (-0.13) and HSGX (-$0.12)
… Largest $ upside: BLUE (+$5.60), CLLS (+$1.21), RGNX (+$1.20), MDXG (+$1.20) and XON (+$1.01)
… Flat: ONVO and AGTC
Out and about:
Biostage (BSTG -$0.027) filed an SEC Form 6, funny how their Chairman of the Board, John F. Kennedy was NOT listed. NO 8-K?
BSTG has scheduled a conference call for 2/13 for updates to WHY they had (in MY opinion) fleece 25 M share from stakeholders to further their salary continuance – we will be preparing a LIST of the questions that MUST be ANSWERED by this CFO and CEO and their 2 accountant team!
Daily analytics:
The U.S. stock market halted its death spiral to close higher Tuesday after a wild day of trading that saw the Dow ricocheting more than 1,000 points, underscoring a new regime of volatility. The turnaround, helped to return key benchmarks back to positive territory for the year.
· The Dow gained 567.02 points, or 2.3%, to 24,912.77 after falling 567 points at the open. The Dow’s rally was its best daily percentage gain since January 2016.
· The S&P 500 index rose 46.20 points, or 1.7%, to 2,695.14.
· The NASDAQ climbed 148.36 points, or 2.1%, to 7,115.88.
The CBOE Volatility Index (VIX) widely considered the best gauge of fear in the market, Tuesday traded at 29.98, down -19.67% …
- Monday traded at 37.32, up +20.01 or +115.6% after Friday traded at 17.21, up +27.77% after Thursday traded at 13.47, down -0.52%, Wednesday traded at 13.54, down -8.45% and last Tuesday traded at 14.84, up +7.30% …
Welcome to another day of the sector’s roller coaster …
… The iShares Russell 2000 (IWM) indicated:
· Tuesday was up +1.61%
· Monday -3.84%
· Friday -1.93%
· Thursday +0.32%
· Wednesday -0.48%
· Last Tuesday -0.96%
… The iShares NASDAQ Biotechnology (IBB) indicated:
· Tuesday was up +2.03%
· Monday -4.42%
· Friday -1.61%
· Thursday -0.09%
· Wednesday -1.88%
· Last Tuesday -1.88%
The count - decliners versus gainers:
……. look at the differences in decliners:
· Tuesday’s decliners ranged from -0.15% <JUNO -$0.13> to -% <RENE.L -$11.26> in 12 equities;
· Monday’s decliners ranged from -0.61% <CUR -$0.01> to -12,18% <CYTX -$0.047> in 32 equities;
· Friday’s decliners ranged from -0.60% <NWBO -$0.002> to -7.82% <CUR -$0.14> in 31 equities;
· Thursday’s decliners ranged from -0.11% <QURE -$0.02> to -8.5% <CAPR -$0.17> in 22 equities;
· Wednesday’s decliners ranged from -0.18% <BLFS -$0.01> to -25.85% <BLCM -$2.12> in 27 equities;
· Last Tuesday’s decliners ranged from -0.23% <CLBS -$0.01> to -15.13% <VTGN -$0.23> in 28 equities;
Versus
… Look at the percentage’s (%) and spreads …
· Tuesday’s gainers ranged from +0.37% <PSTI +$0.01> to +8.41% <XON +$1.01> in 25 equities;
· Monday’s gainers ranged from +0.02% <JUNO +$0.02> to +1.65% <NWBO +$0.0055> in 5 equities;
· Friday’s gainers ranged from +0.04% <JUNO +$0.03> to +4.37% <CAPR +$0.08> in 7 equities;
· Thursday’s gainers ranged from +0.17% <BLUE +$0.35> to +5.84% <VCEL +$0.45> in 15 equities;
· Wednesday’s gainers ranged from +0.08% <JUNO +$0.07> to +7.94% <NWBO +$0.03> in 12 equities;
· Last Tuesday’s gainers ranged from +0.21% <JUNO +$0.18> to +7.22% <HSGX +$0.19> in 7 equities;
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.
