March 27, 2018 8:04am
The issues are momentum, low volume, erratic volatility and moving averages
… It’s not all about the lines on a chart and their effects
We have never left the site of the battle of the oversold versus the overbought; are the wounded being carried away and treated and are the stalwarts staying upright?
If you had been subscribing, you’d be aware of the issues affecting the upcoming session
Higher open expected
Dow futures are UP +0.54% (+131 points) and NASDAQ futures are UP +0.89% (+61 points)
U.S. stock index futures posted solid gains ahead of Tuesday's open
European equities jumped higher as concerns over a global trade war eased.
Asian markets closed higher as trade tensions eased
Today’s concern: share pricing as compared to momentum focused on sustainability
Data docket: At 9 a.m. ET, the S&P Case-Shiller House Price Index is due out, followed by consumer confidence at 10 a.m. ET, along with the Richmond Fed survey of manufacturing activity. At 10:30 a.m. ET meantime, the Dallas Fed's Texas service sector outlook survey is expected to be published.
Today’s indications:
- The iShares Nasdaq Biotechnology (IBB) is indicating a POSITIVE +0.31% upside in Tuesday’s pre-market;
- The SPDR S&P Biotech ETF (XBI) is indicating a POSITIVE +0.22% upside in Tuesday’s pre-market;
- The Health Care Select Sector SPDR ETF (XLV) is indicating a POSITIVE +0.18% upside in Tuesday’s pre-open;
- The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.46% upside in Tuesday’s pre-open
Henry’omics:
What to be on the look-out for … I am watching the direction of the IBB as a reflection upon the stem, cell and gene therapy, regenerative medicine “arena”.
As I had stated, “the sector rallied at the open, petered away and came back. There are those who have noted that the bounce was technical, rather than driven by fundamentals or sentiment. Positive closes in stocks tend to come after biggest down days and today’s action looks like a technical bounce, just because the sector was so weak for days.”
Review the last 5 session’s close (of 40 covered companies):
- Monday closed POSITIVE with 17 decliners, 21 advancers and 2 flats;
- Friday closed NEGATIVE with 28 decliners, 8 advancers and 4 flats;
- Thursday closed NEGATIVE with 26 decliners, 11 advancers and 3 flats;
- Wednesday closed NEUTRAL with 19 decliners, 19 advancers and 2 flats;
- Last Tuesday closed NEGATIVE with 23 decliners, 14 advancers and 3 flats;
Volatility (the VIX) dropped -15.44% after jumping Friday +6.56% after Thursday’s +30.68% from Wednesday’s -3.71%, Tuesday’s -4.31% from last Monday’s +20.38% as volume continued low.
From Monday’s night’s newsletter, “… the IBB (+2.68%), XBI (+2.80%), XLV (+2.07%) and the IWM (+2.18%) indexes stayed up. As I stated, “A good day to BUY and SELL …” twenty (20) to twenty five (25) of Friday’s twenty-eight (28) decliners are OVERSOLD – twenty one (21) closed up – not far from the predicted. Credibility and meeting expectation are the underlying issues of the sector as volume remains low to the up and downside.”
What I am “feeling” and seeing this a.m.:
An empty “feeling” over WHY (?) the IBB is not indicating having jumped +2.68% yesterday …
BioTime (NYSE American: BTX) announced that IVT Holdings acquired Ascendance Biotechnology, BTX’s subsidiary, AgeX Therapeutics, Inc. (AgeX), which owned a minority stake in Ascendance at the time of the acquisition. AgeX will receive up to $3.5 million in cash for its Ascendance shares. BTX is able to convert this non-core asset into a meaningful amount of cash. This cash will help fund AgeX operational expenses as it continues to establish itself in the field of aging and age-related diseases which helps the cash burn of BTX as it funds AgeX.
A re-cap:
- Monday’s decliners ranged from -0.03% < BLUE -$0.05> to -16.79% < KOOL -$0.45> in 17 equities;
- Monday’s gainers ranged from +0.39% <ADVM +$0.03 > to +8.37% <MDXG +$0.56> in 21 equities;
Consider the iShares NASDAQ Biotechnology (IBB), the last six (6) sessions is still down -5.31% … look for the index to flip and flop:
- Monday was up +2.68%...
- Friday was down -2.63%
- Thursday was down -2.30%
- Wednesday was down -0.98%
- Tuesday was up +0.02%
- Last Monday was down -2%
My evaluation:
I am still reminded about the “Christians and the lions” of Roman days where the “image of cowering Christians huddled in the arena awaiting their deaths as lions prowled towards them was the defining symbol of … persecution and the subject of many famous paintings.”
Concerning the analogy, investors have been thrown to the lions. “Tacitus described Christianity as a “pernicious superstition” and the Christians themselves as degraded and sordid. However, no ancient writer suggests that these Christians were persecuted for their faith alone. They were charged with committing the crime of arson. <Nero’s edict>”
So who are the current arsonists (?), I believe algorithms and capital market dependence!
Companies in my headlights:
… Watch and wait … good or the lack of news (and any bad news) is dragging appreciation like walking a dog who doesn’t want to keep pace …
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.
