March 21, 2018 7:54am

Under the surface of weakness, it’s not all about sentiment, it’s about pricing reality

The IBB, XBI and XLV are NOT indication while the IWM is barely up +0.03%

 

Pre-open indications: 3 SELLs and 1 BUY

 

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Lower open expected

Dow futures are DOWN -0.04% (-10 points) and NASDAQ futures are DOWN -0.29% (-20 points)

 

US stock futures pause for breath as Fed decision takes center stage

European markets edge lower

Asian stocks closed mixed, with investors cautious ahead of expected Fed rate hike

 

Today’s concern: today will see the conclusion of a two-day meeting by the Fed, where the Federal Open Market Committee (FOMC) will release its latest interest rate decision and give comments on the economy at 2 p.m. ET.

Data docket: mortgage applications are due out at 7 a.m. ET, followed by the current account at 8:30 a.m. ET and existing home sales at 10 a.m. ET.

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is NOT indicating in Wednesday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is NOT indicating in Wednesday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Wednesday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.13% upside in Wednesday’s pre-open

 

Henry’omics:

What to be on the look-out for … when  the two-day Federal Open Market Committee meetings conclude, we expect the Fed to raise rates by 25 basis points

Yesterday sector stocks shifted sideways (14 to 14 advancers) versus the decliners of Monday’s 25 to Tuesday’s 23 – big thrill or a beginning of a slow moving oversold trend.

Tuesday’s session tracked the RegMed, stem, gene and cell therapy sector’s record over 6 sessions (of 40 covered companies):

  • Tuesday closed NEGATIVE with 23 decliners, 14 advancers and 3 flats;
  • Monday closed NEGATIVE with 25 decliners, 14 advancers and 1 flat;
  • Friday closed POSITIVE with 17 decliners, 23 advancers and 0 flats;
  • Thursday closed NEGATIVE with 27 decliners, 11 advancers and 2 flats;
  • Wednesday closed NEGATIVE with 21 decliners, 18 advancers and 1 flat;
  • Last Tuesday closed POSITIVE with 16 decliners, 19 advancers and 5 flats;

Review the decliners, 25 versus 23 as compared to 17 and the advancers – 14 versus 14 as compared to 23; there is always an upside after a major whack! Are we ready for an ascent?

Volatility dropped -4.31% from Monday’s +20.38% as volume continued low.

We still have a number of Q4 and FY17 financial results i.e. earnings with 31 having announced; KOOL and CLBS announce today.

From Tuesday’s night’s newsletter, “… the bounce back is small but, happening. The sector shows some highs and lower lows while breadth declines as the IBB (+0.05), XLV (-0.20%) and XBI (+0.24%) start their move forward while volume dips.”

A re-cap:

  • Tuesday’s decliners ranged from -0.17% <CLBS -$0.01> to -6.80% <XON -$1.116> in 23 equities;
  • Tuesday’s gainers ranged from +0.53% <ATHX +$0.01> to +6.64% <QURE +$1.38> in 14 equities;

Consider the iShares NASDAQ Biotechnology (IBB), the last six (6) sessions ended down -3.73% … look for the index to flip after yesterday’s (Monday’s) flop …

Last five (5) sessions IBB indicated:

  • Tuesday was up +0.02%
  • Monday was down -2%
  • Friday was up +0.06%
  • Thursday -0.98%
  • Wednesday -0.12%
  • Tuesday -0.71%

 

My evaluation ...

It’s a “crap-shoot” today with the FED, politics and the Facebook (FB) – political issues affecting the markets, as I stated yesterday early is better than late re “dipping’ into the sector!

It’s oversold and sessions away from being overbought again! It’s time to go “apple” picking using a short ladder, an appropriate analogy!

 

Companies in my headlights:

bluebird bio (BLUE) closed down again -$5.65 to $189.30 with 2 M shares traded <3 month average = 810.6 K shares>. After fifteen (15) down sessions ranging from $201.00 to the present close having seen a low of $190.80 on 2/8 – Oversold, SELL to BUY;

Caladrius Biosciences (CLBS) closed down -$0.01 to $5.95 and reports Q4 and FY17 today at 4:30 p.m. The question will be spending versus its cash position which is strong from the PCT sale to Hitachi Chemical and having recently acquires a development platform from Shire – let the spending begin. Another factor, CLBS was priced at $3.78 on 2/15; CLBS has been a dollar seeking a story to tell – SELL;

Capricor (CAPR) closed down -$0.03 to $1.76 with 296 K shares traded <3 month average =509.3 K shares>. The only announcement is presenting at the Oppenheimer and Needham & Co healthcare conferences – they’re looking for a banker for an offering to alleviate their dwindling cash position, expect an offering – SELL;

UniQure (QURE) closed up +$1.38 to $22.16 with 436.3 K shares traded <3 month average = 402.2 K shares>. QURE has a pricing ‘condition” – it can’t hold on to its upside. QURE has a negative aftermarket indication of -$0.69 or 3.09% - 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.