April 3, 2018 7:57am

… Experiencing emotional selling and zero support, a far cry from the highs of 2015

 

From the ashes, can an oversold phoenix rise?

For once, pray for algorithm recognition …

 

Where the interpretation of truths shed light on share pricing!

 

Higher to mixed open expected


 

Dow futures are UP +0.39% (+93 points) and NASDAQ futures are UP +0.58% (38 points)

 

US futures point to a higher yet, mixed open as concerns over tech and trade weigh

European equities moved lower after a sharp sell-off in markets

Asian shares closed lower, although losses in the region were slighter than the declines seen stateside in the last session amid a drop in tech stocks and trade-related worries.

 

Today’s concern: having entered into correction territory, can we stay there?

Data docket:  NONE but, Minneapolis Fed President Neel Kashkari is expected to deliver remarks at the Regional Economic Indicators Forum (REIF) in Duluth, Minnesota. Meantime, Federal Reserve Governor Lael Brainard will be in New York, where she's due to speak at a NYU Stern School of Business lecture.

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is NOT indicating in Tuesday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is NOT indicating in Tuesday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Tuesday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.54% upside in Tuesday’s pre-open

 

Henry’omics:

U.S. stocks looked set to open higher on Tuesday, after suffering a rough start to the new month and quarter as stem, gene, cell therapy and regenerative medicine stocks struggled.

Many of the sector’s “usual suspects” were below their 50-day moving average, a sign that short-term momentum may be trending to the downside!

Despite the bumpy start to the month, April tends to be a strong month for stocks.

From Monday night’s newsletter: “the sector is technically broken and then the over-reaction jumps. We need a dynamic to revitalize the sector.”

As I had stated, “It is an ominous sign for where sector equities may be headed! It’s a long way back to the oversold upside! The current environment is much scarier than 2017 — an atypically soft year, where the sector rose with acquisition and declined with minimal news with record high volatility.”

“A selloff in Monday afternoon trade reached levels not seen since early February by one measure. The Arms index is was at its highest since on the NYSE briefly hitting above 2.6, approaching its highest level since Feb. 5, when the markets saw another sharp descent”, according to FactSet data.

“The Arms index is a volume-weighted measure of market breadth, that tends to rise when the broader market falls, as the intensity of the selling in declining stocks is usually greater than the intensity of buying in rising stocks, was at 2.621 on the NYSE. It last traded at 2.516. Levels above 2.000 are considered panicky <MarketWatch>.

 

What to be on the look-out for:

 Volume is STILL low … while volatility screams!

 

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

  • Monday closed NEGATIVE with 31 decliners, 9 advancers and 0 flats;
  • Friday was a market holiday;
  • Thursday closed POSITIVE with 16 decliners, 22 advancers and 2 flats;
  • Wednesday closed NEGATIVE with 26 decliners, 13 advancers and 1 flat;
  • Last Tuesday closed NEGATIVE with 35 decliners, 2 advancers and 3 flat;

 

Volatility (the VIX) is still a big driver which was up +18.28% after Thursday’s -12.68%, Wednesday’s +0.76% and last Tuesday’s +6.99% upside.

 

What I am “feeling” and seeing this a.m.:  apprehension re testing the lows as I believe equities will bounce around until some “real” news becomes available.

 

A re-cap: “Investors are still facing hefty losses as April begins having weathered the month of March!

  • Monday’s decliners ranged from -0.74% <CAPR -$0.01 > to -5.42% < BLUE -$9.25> in 31 equities;
  • Monday’s gainers ranged from +20.55% <BLFS +$1.05 > to +1.19% <CYTX +$0.0034> in 9 equities;

 

Consider the iShares NASDAQ Biotechnology (IBB) over the last ten (10) sessions it’s down -8.49%:

  • Monday was down -3.95%
  • Friday was a market holiday
  • Thursday +0.72%
  • Wednesday +0.82%
  • Last Tuesday -2.77%
  • The previous Monday +2.68%...
  • Friday -2.63%
  • Thursday -2.30%
  • Wednesday -0.98%
  • The previous Tuesday +0.02%

 

My evaluation:

Sit tight until momentum is defined by direction; don’t set the course - follow it!!

Two (2) of last night’s eight (8) upside were: BLFS (+20.55%) and AST (+3.45%); the remaining six (6) were day trading “puffs” IMUC (+4%), CUR (+3.64%), NWBO (+5.58%), BCLI (+1.90%), VTGN (+1.30%) and ISCO (+0.68%)

 

Company in my headlights:

MOST are OVERSOLD in MY mind but, what matters is how the “algos” and traders perceive the entry points?  

 

 

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.