RegMed Investors’ (RMi) closing bell: weakness or a panic move?

May 29, 2018 5:30pm

As sector sells-off; don’t be surprised as there could be more …

Too many have been waiting for a sector butt-kick!

It’s not all about Italy; the VIX’s (+28.74%) implied volatility jumped to +16.98 as investors fled equity markets, the IBB (-0.45%) along with the XLV (-1%) and the XBI (-0.54%) dropped with less drama than the IWM (-0.12%)

Sentiment is so fragile!

The downside bottomed in a range of +$0.01 (2) to -$3.51  in 27 equities while the upside was weak (+$0.03 to +$2.00 in 15 stocks

Pre-open indication: 2 MISS

We keep you informed, if you want to be knowledgeable of the “bones” of the sector - be a subscriber to understand what you need to do in tomorrow’s market. Let the “numbers” speak since sentiment is capricious!

Henry’omics:

From the pre-open newsletter, “giddy up, three (3) more sessions until May ends and the June focus the quarter. Downdrafts are swings without concern to value as algorithms usually pop the cork but, when don’t they fuel pessimism?”

As I had sated about Tuesday’s moves:  The moves in pre-market trade came as markets overseas showed a relatively negative picture. In Asia, stocks finished the session in the red, as political turmoil in Italy and a drop in crude futures weighed on sentiment.

This a.m. told the story re indications:

• The iShares Nasdaq Biotechnology (IBB) is indicating a DOWNSIDE of -0.07% in Tuesday’s pre-market;
• The SPDR S&P Biotech ETF (XBI) is indicating a DOWNSIDE of -0.54% in Tuesday’s pre-market;
• The Health Care Select Sector SPDR ETF (XLV) is indicating a DOWNSIDE of -0.14% in Tuesday’s pre-open;
• The iShares Russell 2000 (IWM) is indicating a DOWNSIDE of -0.74% in Tuesday’s pre-open

And ... "the moves in pre-market trade came as markets overseas showed a relatively negative picture. In Asia, stocks finished the session in the red, as political turmoil in Italy and a drop in crude futures weighed on sentiment."

It was coming ...

U.S. stocks accelerated losses in afternoon trade Tuesday, with the Dow down more than 400 points as traders returning from a three-day weekend were greeted by fresh political drama in Italy.

The VIX has hit its highest level in more than a month. The S&P 500 (SPX) is down 1.1% to 2,691, its largest one-day decline since April 24. Both implied and realized volatility have been much higher in 2018 than last year. If the S&P 500 closes at this level on Tuesday, it will be the 33rd session this year with a move larger than 1% <according to FactSet>. In 2017, the S&P 500 had 8 sessions with 1% or larger moves.

Falling into the downside: SAGE (again), BMRN, BLUE, CLLS and CRSP and the deserved category - BSTG

While the upside of: RENE.L, RARE (again), SLDB, IONS and RGNX

The advance/decline line scenario of 45 covered companies:   

• The open was negative with an A/DL of 20/23 and 2 flats;
• The mid-day stayed negative with an A/DL of 15/27 and 3 flat;
• The close was negative with an A/DL of 15/27 and 3 flats;

MY working five (5) trend lines:

… The greatest volume to the downside:  SGMO, ONVO, XON, CRSP and BMRN

… Upside volume was weighted to:  VSTM, IONS, BCLI, RARE and VCEL

… Biggest $ downside:  SAGE (-$3.51), BMRN (-$1.95), BLUE (-$1.95), CLLS (-$1.04) and CRSP (-$1.03)

… Best moves to the $ upside:  RENE.L (+$2.00), RARE (+$1.84), SLDB (+$1.42), IONS (+$1.23) and RGNX (+$1.05)

… Flats:  AST, CUR and MDXG

Re-capping the month of May:

• Tuesday closed NEGATIVE with 27 decliners, 15 advancers and 3 flat;
• Monday (May 28) was a holiday
• Friday closed NEGATIVE with 21 decliners, 18 advancers and 6 flat;
• Thursday closed POSITIVE with 18 decliners, 23 advancers and 4 flats;
• Tuesday closed POSITIVE with 16 decliners, 27 advancers and 2 flat;
• Monday (May 21) closed NEGATIVE with 30 decliners, 12 advancers and 3 flat
• Friday closed barely NEGATIVE with 23 decliners, 22 advancers and 0 flat
• Thursday closed POSITIVE with 20 decliners, 23 advancers and 2 flat
• Wednesday closed POSITIVE with 15 decliners, 27 advancers and 3 flat
• Tuesday closed NEGATIVE with 21 decliners, 20 advancers and 4 flat
• Monday (May 14) closed POSITIVE with 10 decliners, 33 advancers and 2 flat;
• Friday closed POSITIVE with 16 decliners, 29 advancers and 0 flat;
• Thursday closed POSITIVE with 18 decliners, 26 advancers and 1 flat;
• Wednesday closed POSITIVE with 12 decliners, 31 advancers and 2 flats;
• Tuesday closed NEGATIVE with 28 decliners, 16 advancers and 1 flat;
• Monday (May 7) closed POSITIVE with 15 decliners, 29 advancers and 1 flat;
• Friday closed POSITIVE with 8 decliners, 34 advancers and 3 flat
• Thursday closed NEGATIVE with 29 decliners, 11 advancers and 5 flats;
• Wednesday closed POSITIVE with 15 decliners, 22 advancers and 8 flats;
• Tuesday (May 1) closed POSITIVE with 15 decliners, 25 advancers and 5 flats;

Daily analytics:

U.S. stocks sank Tuesday amid political turmoil in Italy that sent the euro tumbling and ongoing difficult trade talks with China. Bank stocks led the decline.

• The Dow fell -391.64 points or -1.58% to finish at 24,361.45,
• The S&P 500 fell -31.47 points or -1.16% to close at 2,689.86,
• The NASDAQ fell -37.26 points or -0.5% or to finish at 7,396.59.

The CBOE Volatility Index (VIX) widely considered the best gauge of fear in the market,

• Tuesday traded at 16.98, up +28.44%
• Monday was a holiday
• Friday traded at 13.22, up +5.51%
• Thursday traded at 12.62, up +0.32%
• Wednesday traded at 12.68, down -4.46%
• Last Tuesday traded at 13.18, up +0.76%

The iShares Russell 2000 (IWM) indicated:

• Tuesday was down -0.12%
• Monday was a holiday
• Friday closed down -0.15 %
• Thursday closed up +0.05 %
• Wednesday closed up +0.15 %
• Last Tuesday closed down -0.73%

The iShares NASDAQ Biotechnology (IBB) indication:

• Tuesday was down -0.45%
• Monday was a holiday
• Friday closed up +0.22%
• Thursday closed up +0.08%
• Wednesday closed up +0.50%
• Last Tuesday closed up +0.32%

The count in May - decliners versus gainers:

……. look at the differences in decliners:

• Tuesday’s decliners ranged from -0.22% < AXGN -$0.10> to -4.56% <BSTG -$0.13> in 27 equities;
• Monday was a holiday
• Friday’s decliners ranged from -0.21% <GBT -$0.10> to -6.11% <VSTM -$0.35 > in 21 equities;
• Thursday’s decliners ranged from – 0.20% <BMRN-$0.18 > to -15.09% <AGTC -$0.80 > in 16 equities;
• Wednesday’s decliners ranged from – 0.16% <MESO -$0.01 > to -5.16% <SAGE -$8.49 > in 16 equities;
• Last Tuesday’s decliners ranged from -%0.27 <VYGR -$0.05 > to -7.14% <AST -$0.125> in 16 equities;

Versus

… Look at the percentage’s (%) and spreads …

• Tuesday’s gainers ranged from +0.08% <ALNY +$0.08 > to +7.49% <SLDB +$1.42 > in 15 equities;
• Monday was a holiday
• Friday’s gainers ranged from +0.06% <FIXX +$0.06 > to +5.53% <BCLI +$0-.24 > in 18 equities;
• Thursday’s gainers ranged from +0.11% <CRSP +$0.08 > to +7.5% <VSTM +$0.40 > in 23 equities;
• Wednesday’s gainers ranged from +0.19% < VSTM +$0.01> to +11.71% <MDXG +$0.90 > in 28 equities;
• Last Tuesday’s gainers ranged from +0.18% < FATE +$0.02> to +10.80% <ONVO +$0.19 > in 27 equities;

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.