October 4, 2018 7:37am

The downdrafts are being “ruled” by algorithms as sentiment is marginalized by trading venues

I’m ready from just about anything happening in sector share pricing

 

Pre-open Indications: 2 BUYs and 3 SELLs

 

RMi outlines preludes and aftermaths; who is defining the metrics for individual investors and which broker, trader, fund or I-Bank is keeping you notified of the sector and market fluctuations? - SUBSCRIBE!

U.S. stock index futures are fluctuating lower ...  

Dow futures are DOWN -0.31% (-89 points) and NASDAQ futures are DOWN -0.51% (-29 points)

 

U.S. stock index futures fell deep into the red ahead of Thursday's open.

European markets traded lower

Asian markets were lower, with investors grappling with rising rates after strong U.S. economic data was released overnight.

 

Data docket: jobless claims are due out at 8:30 a.m. ET, followed by factory orders at 10 a.m. ET. September's nonfarm payrolls data is due out Friday morning.

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is NOT indicating in Thursday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is indicating a -0.36% DOWNSIDE in Thursday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is a -0.35% DOWNSIDE indicating in Thursday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a -0.41% DOWNSIDE in Thursday’s pre-open

 

Henry’omics:

I’m ready from just about anything happening in sector share pricing as …

U.S. futures are following the negative sentiment seen in markets overseas, as investors around the world become jittery over rising rates <CNBC>.

In compiling my indication signals, I draw on logic, historical precedents, specific knowledge of the sector and its practices as to lessons learned.  It’s important for investors to identify and determine which indication is actual performance based.

The next few trading sessions will be critical for the RegMed sector which will establish whether market reaction to recent events is temporary and short-lived, or if this is the start of a more fundamental correction. 

The issue, the RegMed sector suffers the tourist routine … most traders are pumping to buy and dumping to sell.  These same trading/buyers/sellers can also be very fickle as their purchasing habits are often based on emotion, not an investment strategy but, a short-lived visit.

 

I always want to know what happened PRIOR to what might happen today – it sets a tone of consequence:

From Wednesday’s night’s newsletter: “finally, many of the oversold were able to “value-up”. Thank you, algorithms having “ruled” as traders recognized the quant model’s abuse of “our” universe’s share pricing. Investors need to stay – DEFENSIVE … as Q3 results and expectations are on forefront.”

The iShares NASDAQ Biotechnology (IBB): a week’s history lesson; for a five session aggregate of +0.49% - consider a sideways slide!

Of the 45 companies covered on Wednesday; 16 downside equities finished in a range of -0.02% (SLDB) to -15.87% (BLFS) while 27 upside equity oscillated from +0.14% (FIXX) to +17.33% (KOOL +$0.06) with 2 flat close (BSTG and OSIR).

  • In 3 sessions in October – there were 2 negative closes and 1 positive close
  • In 19 sessions in September – there were 10 negative closes and 9 positive close;
  • In 21 August sessions – 6 had negative and 15 had positive closes

 

Companies in my headlights – It’s your decision; I provide an idea and context:

Athersys (ATHX) closed up +$0.02 to $2.13 after Tuesday’s $2.11, Monday’s $2.16 and last Friday’s $2.10 having started September at $2.06, seeing a high of $2.06 and a low of $1.86. August opened at $2.00, fell to $1.98; saw a high of $2.06 and a low of $1.87. What has ATHX done for investors – a whole lot of NOTHING? There is a negative aftermarket indication of -$0.03 or -1.41% - Maintaining SELL;

CRISPR Therapeutics (CRSP) closed down -$0.72 to $39.00 after Tuesday’s -$2.62 to $39.72, Monday’s -$2.01 to $42.34 having ended September at $44.35. There is a positive aftermarket indication of +$0.35 or +0.90%. Selling session downdrafts only last so long–SELL to BUY;

Sangamo Therapeutics (SGMO) closed up +$0.315 to $15.325 after Tuesday’s +$0.43 to $139.71 and Monday’s  -$1.59 to $15.01 and has an aftermarket indication of -$0.15 or -1% after the acquisition of ordinary shares of TxCell (TXCL.PA), at a price of €2.58 per share in cash.  SGMO is also launching a squeeze-out procedure. TxCell's operations which are based in Valbonne, France – Maintaining SELL;

Verastem Oncology (VSTM) closed up +$0.34 to $7.01 after Tuesday’s +$0.16 to $6.67, Monday’s -$0.74 to $6.51 with a FDA approval and Chinese collaboration has been subjected to trading pressures and OVERSOLD and has an aftermarket indication of +$0.09 or +1.28% - Maintaining BUY;

Vericel (VCEL) closed up +$0.92 to $14.92 after Tuesday’s $14.00 and Monday’s $13.95 having closed in September’s $14.15 having seen a high of $14.80 and a low of $11.65. Eliminating a comparable and a competitor – Histogenics (HSGX); I still believe that VCEL’s share pricing is too “long-in-the-tooth” as Q3 results tend to be seasonal. I am concerned about whether the channel has been stuffed in the last quarters (my opinion) – 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.