RegMed Investors’ (RMi) pre-open: selective evidence

April 17, 2018 8:04am

The facts are there but, how will the algorithms rule?

As I keep tracking the trackable

Though the use of AI is a choice of being replaced by a machine or being treated like one

Pre-open indication:  3 SELLs

Where the understanding of the indications sheds light on share pricing!

Another UP open expected

Dow futures are UP +0.79% (+195 points) and NASDAQ futures are UP +0.51 % (+35 points)

U.S. stock index futures rose sharply ahead of Tuesday's open, as investors braced for a wave of fresh corporate earnings.

European markets rally as investors monitor earning

Most Asian markets closed lower as investors digested the release of China data.

Data docket:  housing starts and business leader’s survey are both scheduled to be published at 8:30 a.m. ET, followed by industrial production at 9:15 a.m. ET.

Political front: nothing new, trade wars, Syria backlash then sprinkle in in earnings from big corporation and top it off with a few tweets from president Trump – what a stew!

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 indicating an UPSIDE of +0.58% in Tuesday’s pre-open;
• The iShares Russell 2000 (IWM) is indicating a POSITIVE +0.38% upside in Tuesday’s pre-open

Henry’omics:

Today – Understand that algorithms working 24/7 creating good and bad trends; so who is your friend - RMi … like I’ve said, “I am watching the watchers”

From Monday night’s newsletter: “losses chain the sector together through a sequence of instructions that tells a machine what to do as they infect our portfolios and we are teaching them what to do! Living with algorithms as equities rise, fold and dive …”

I had also stated, “Losses were broadly based as headwinds were strong and volume dried up; the sector still closed lower and trading ranges were slim which will likely continue.”

Today's  session - keep your eyes open, your ears flapping and your head down - waiting for Godot yet I'd settle for a bench to rest!

Review the last 11 sessions of April’s closings (of 40 covered companies), there have been five (5) negative and four (4) positive closes with two (2) neutral:

• Monday closed NEGATIVE with 21 decliners, 14 advancers and 5 flats;
• Friday closed barely NEGATIVE with 18 decliners, 17 advancers and 5 flats;
• Thursday closed POSITIVE with 8 decliners, 30 advancers and 2 flats;
• Wednesday (3/11) closed NEUTRAL with 19 decliners, 19 advancers and 2 flats;
• Tuesday closed POSITIVE with 7 advancers, 32 advancers and 1 flat;
• Monday closed POSITIVE with 12 decliners, 23 advancers and 5 flats;
• Last Friday (3/6) closed NEGATIVE with 32 decliners, 7 advancers and 1 flat;
• Thursday closed NEGATIVE with 25 decliners, 11 advancers and 4 flats;
• Wednesday closed POSITIVE with 11 decliners, 28 advancers and 1 flat;
• Tuesday closed NEUTRAL with 19 decliners, 19 advancers and 2 flats;
• The previous Monday (3/1) closed NEGATIVE with 31 decliners, 9 advancers and 0 flats;

A re-cap:

• Monday’s decliners ranged from -0.11% <BLCM -$0.01> to -9.60% <SGMO -$1.90 > in 21 equities;

• Monday’s gainers ranged from +0.04% <NWBO +$0.00 > to +9.83% <RGNX +$3.40> in 14 equities;

Consider the iShares NASDAQ Biotechnology (IBB) over the last eleven (11) sessions was up +1.01%: I still see a DECLINE …

• Monday was down -0.68%
• Friday was down -0.71
• Thursday was up +1.32%
• Wednesday (3/11) was down -0.35%
• Tuesday was up +2.75%
• Monday was up +1.82%
• Friday (3/6) was down -3.01%
• Thursday was down -1.62%
• Wednesday +2.91%
• Tuesday +0.37%
• The previous Monday (3/2) -3.95%

My evaluation:  If this market or sector doesn’t bite you today, just wait – you’ll feel the pain … “Mark Mobius, the 81-year-old investment guru, believes the U.S. stock market is set for a 30% correction that would essentially wipe out the gains of the last two years.”

Company in my headlights:

Applied Genetic Technologies (AGTC) closed down -$0.15 to $4.90 with 103.5 K shares traded <3 month average = 106.2 K shares> after Friday’s +$0.45 to $5.05 with 155.9 k shares traded after Thursday’s +$0.60 to $4.60 with 220.6 K shares traded.  AGTC has completed enrollment in a clinical study for the treatment of x-linked retinoschisis (XLRS). The real issue is do they have the bench strength to oversee the trial protocols? I say NO! There is also a question of being undervalued in relation to comparables yet, there is an answer of execution and oversight of the protocols of clinical trials. Five (5) sessions ago, AGTC traded at $3.70, that’s a $1.20 or +24.48 % premium in the share price that may NOT be sustainable – Maintaining SELL;

Bellicum Pharmaceuticals (BLCM) closed down -$0.01 to $8.97 and proposed a 7 M share offering – a kiss of depreciation – SELL;

Biostage (BSTG) closed flat again at $2.60 on Friday, Thursday and Wednesday after Tuesday’s -$0.01 to $2.60 with 1.65 K shares traded <3 month average = 9.24 K shares> after last Monday’s +$0.19 to $2.61 with 2.2 K shares traded. KPMG, their accounting firm has dropped their accounting overview – over an on-going concern issue (?) just another reason on top of many to exit this equity after the MANY misdeeds of creating a $47 M deficit over three (3) years with NO significant results. Notice the new advisory board member addition, Dr. Christine Finck and the new BOD member, James Shmerling - both are members of the Connecticut Children's Medical Center where pre-clinical “activities” are taking place - are we back in a place where there will be MORE transparency issues. They can NOT oversee their OWN work or profit from the hospitals investment – will investors be subjected to yet another development cover-up? WHY are they being compensated (stock and cash) to advise on their own positions? The Boston Business Journal did an article of BSTG’s terminal death suit; even if they are covered by insurance, there will be huge legal costs to keep the deposition doors open – Maintaining 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.