October 15, 2018 7:54am

The question is what’s sustainable as Newton’s “Law of Gravity” stays relevant and the IBB indicates a -0.79% decline?

High “flyers” are more than suspect, especially those with sky-high 52 week changes!

 

Pre-open indications: 2 SELLs

When is it wrong to be RIGHT in sector prognosis? It’s important for investors to identify and determine which indication is actual performance based - SUBSCRIBE!

I follow the dictum, quoting Churchill that “short words are best, and the old words when short are best of all.”

 

U.S. stock index futures are sinking

Dow futures are DOWN -0.23% (-57 points) and NASDAQ futures are DOWN -0.62% (-45 points)

 

US futures point to a triple-digit fall amid Saudi Arabia tensions

European stocks were lower Monday morning, as concerns over Brexit talks, a potential slowdown in the Chinese economy and higher U.S. borrowing costs limited investor appetite <CNBC>.

Asia stocks fall following recent sell-off

 

Data docket: Retail sales figures for September are scheduled to be published at around 8:30 a.m. ET on Monday. Later in the session, Empire State Manufacturing Index data for October and business inventories data for August are both set to be released at around 10:00 a.m.

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is indicating a -0.79% DOWNSIDE in Monday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is NOT indicating in Monday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Monday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a -0.46% DOWNSIDE in Monday’s pre-open

 

Henry’omics:

A new week kicks into action with investors remaining in a cautious mood following a sector shake-out in the previous trading week.

The alleged murder of the Saudi journalist in their embassy in Turkey opens a new source of risk, as President Trump threatens "punishment". Any Saudi retaliation will presumably mainly come through reduced oil supply and higher prices. That won't help market sentiment <CNBC>"

Watch out below ... again!

From Friday’s night’s newsletter: “relief after a wild and new bottoms hitting week. There are two things, investor should do after these declines; catalogue your portfolio inventory - why you own current equities and stay defensive! Q3 results ramp-up on October 25th.”

The iShares NASDAQ Biotechnology (IBB): a week’s history lesson; for a five session aggregate of -2.1% - after 4 negative sessions out of 5!

Of the 45 companies covered on Friday; 9 downside equities finished in a range of -0.43% (BLUE) to -9.31% (VSTM) while 35 upside equities oscillated from +0.07% (XON) to +12.07% (HSGX +$0.06) with a 1 flat close (ADRO).

  • In 10 sessions in October – there were 8 negative closes and 2 positive closes
  • 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:

BioLife Solutions (BLFS) closed up +$0.57 to 12.89 in a sector rebound; however, BLFS is still waving the OVERBOUGHT flag with a 52 week change of +124.41%. The quarter has ended with a Q3 sideways $5.2 M revenue post Q2’s $5.3 M. October started at $17.17, September at $23.45 and August at $19.27 after July’s $14.99 and June’s $10.28. Just waiting for the costs of revenue and SGA numbers – Maintaining SELL;

Vericel (VCEL) closed up +$0.53 to $13.23 having started October at $13.95. VCEL is OVERBOUGHT with a 52 week change of +170.21%; as September initiated at $11.65 seeing a high of $14.80, a low of $11.65 and ended the month at $14.15. Will seasonality and the channel stay strong; it’s a question to be answered with risk mitigation in the air – 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.