March 23, 2018 7:50am

… While the sector’s volatility is high, volume is low

As I had stated, “The issue is that we are still testing lows … investors could see more pressure on stocks if the sell-off isn’t seen as a chance to buy the many dips.”

 

The sector could see more pressure as the fear and emotion grow

Today’s key word: vulnerability

 

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Lower open expected

 

Dow futures are DOWN -35% (-83 points) and NASDAQ futures are DOWN -0.55% (-37 points)

 

Dow looks headed for a 200-point drop at the open

European markets sharply lower amid heightened fears of a trade war

Asian markets closed sharply lower on fears of a potential trade war.

 

Today’s concern: President Trump will impose tariffs on up to $60 billion in Chinese imports; in response, China's commerce ministry proposed a list of 128 U.S. products as potential retaliation targets, according to a statement on its website posted Friday morning.

Data docket: durable goods and new home sales data for February released mid-morning

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is indicating a NEGATIVE -1.17% downside in Friday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is indicating NEGATIVE -0.29% downside in Friday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Friday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a NEGATIVE -0.37% downside in Friday’s pre-open

 

Henry’omics:

What to be on the look-out for … another triple-digit  dive as fear intensifies over trade, government budgets and an adverted shut-down, White House musical chairs and the market’s reaction.

As I had stated, “I believe many but, not all sector equities are radioactive … uncertainty has cascaded most to the downside.”

 

Review the last 5 session’s close (of 40 covered companies):

  • Thursday closed NEGATIVE with 26 decliners, 11 advancers and 3 flats;
  • Wednesday closed NEUTRAL with 19 decliners, 19 advancers and 2 flats;
  • Tuesday closed NEGATIVE with 23 decliners, 14 advancers and 3 flats;
  • Monday closed NEGATIVE with 25 decliners, 14 advancers and 1 flat;
  • Last Friday closed POSITIVE with 17 decliners, 23 advancers and 0 flats;

 

Volatility (the VIX) jumped +30.68% from Wednesday’s -3.71%, Tuesday’s -4.31% from Monday’s +20.38% as volume continued low.

 

From Thursday’s night’s newsletter, “… the sell-off returned … Volatility jumped as volume dumps. As I had stated, “Sector equities stocks are still on track for continuous speculation.”

A re-cap:

  • Thursday’s decliners ranged from -0.58% <CUR -$0.01> to -6.67% <CAPR -$0.11> in 26 equities;
  • Thursday’s gainers ranged from +0.30% <QURE +$0.07> to +11.76% <AST +$0.20> in 11 equities;

 

Consider the iShares NASDAQ Biotechnology (IBB), the last six (6) sessions ended down -5.2% … look for the index to flop more … as the last five (5) sessions IBB indicated:

  • Thursday was down -2.30%
  • Wednesday was down -0.98%
  • Tuesday was up +0.02%
  • Monday was down -2%
  • Last Friday was up +0.06%

 

Bottom line: wait to see what happens… a good day to watch, listen and sit on the sidelines!

 

Companies in my headlights:

Today’s evaluation …

  •  IF any strength appears – SELL into it and raise cash for a cheapening sector.
  •  As far as the downside is concerned, sit on it!

 

My stand-outs:

bluebird bio (BLUE) closed down -$3.30 to $181.30 with 702.6 K shares traded <3 month average = 849.9 K shares>. The aftermarket indication is a negative -$1.40 or -0.77% - SELL;

Spark Therapeutics (ONCE) closed down -$1.75 to $63.62 with 647.9 K shares traded <3 month average = 768.4 K shares>after Wednesday’s +$2.62 to $65.37 with low volume 332.5 K shares traded. Oversold, Maintaining BUY;

 

 

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.