October 30, 2018 5:26pm

The attacks on share pricing by algorithms as machines maimed but, didn’t kill yet, tortured shareholders are still imprisoned by low volume volatility

Question sustainability as LPS (loss-per-share) earnings start to take their toll

 

Pre-open indications: 7 HITs and 1 MISS

Quarterly results: Aduro Biotechnologies (ADRO) reported a net loss of $23.1 million, or $0.29 per share compared to net loss of $24.5 million, or $0.33 per share Q3/17. Cash totaled $278.6 million compared to $349.7 million at 12/17.

 

Who is defining the metrics for individual investors?

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


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

 

Daily analytics and metrics:

  • The Dow closed up +431.72 points or +1.77% to 24,874.64
  • The S&P closed up +41.38 points or +1.57% to 2,682.63
  • The NASDAQ closed up +111/36points or +1.58% to 7,161.65

 

From the pre-open newsletter, “victim or survivor? Algorithms “diddled” us again causing fear and panic selling with low volume cheating share pricing. I am concerned that barely any aftermarket or pre-market indications point to a BUY.” And then it appeared after the first hour of the session …

 

The advance/decline line scenario of 45 covered companies:   

  • The open was negative with an A/DL of 13/27 and 5 flats;
  • The first hour was positive with an A/DL of 33/9 and 3 flats;
  • The mid-day was positive with an A/DL of 36/7 and 2 flats;
  • The close was positive with an A/DL of 28/15 and 2 flats;

 

Pre-open indications:  7 HITs and 1 MISS

  • bluebird bio (BLUE) closed up +$6.22 – hit;
  • Alnylam Pharmaceuticals (ALNY) closed up +$4.11 – hit;
  • BioMarin Pharmaceuticals (BMRN) closed down -$1.65 – miss;
  • Sage therapeutics (SAGE) closed up +$4.03 – hit;
  • CRISPER Therapeutics (CRSP) closed up +$0.72 – hit;
  • Editas Medicine (EDIT) closed down -$0.35 – hit;
  • Intellia Therapeutics (NTLA) closed flat at $18.52 – hit;
  • Regenxbio (RGNX) closed up +$1.63 – hit;

 

Five (5) key metrics: 

… The greatest volume to the downside:  HSGX, VSTM, SGMO, EDIT and ONVO

… Upside volume was weighted to:  MDXG, AXGN, XON, GBT and IONS

… Leadership ($) to the downside:  BMRN (-$1.65), FIXX (-$0.52), RENE.L (-$0.50), EDIT (-$0.35) and FATE (-$0.34)

… Best moves ($) to the upside:  BLUE (+$6.22), ALNY (+$4.11), SAGE (+$4.03), AXGN (+$3.62) and RARE (+$1.88)

… The iShares NASDAQ Biotechnology (IBB) closed:

  • Tuesday was down -0.1% after indicating a positive +0.28% in the pre-market;
  • Monday was down -0.97% after indicating a positive +1.1% in the pre-market;
  • Friday was down -0.37% after indicating a negative -1.51% in the pre-market;
  • Thursday was up +1.15% after NOT indicating a POSITIVE +0.7% in the pre-market;
  • Wednesday was down -5.76% after indicating a NEGATIVE -0.59% in the pre-market;
  • Last Tuesday was down -0.48% after NOT indicating in the pre-market;

 

Henry’omics:

Sector equities snapped higher Tuesday as markets eased some of the month's brutal losses before the end of October.

The Dow is down nearly 6% this month, its worst performance since August 2015; while the S&P 500 is off by 7.9%.

“Our” universe (MY 45 companies) is in bad shape and it’s worse than many investors think – regaining the losses in October’s losses will take months to repair!

It’s all about technicals and fundamentals and they have been CRUSHED.

I believe the sector will NOT right itself until Q1/18 … IF news is the STIMULANT!

In economic news, an index of consumer confidence rose to a print of 137.9 this month, driven primarily by a hot labor market and expectations that economic growth will remain solid in the near term. The Conference Board's latest reading is the highest level since September 2000; economists (polled by Reuters) had expected the index to slip to 136 <CNBC>.

 

UPSIDE indicators – still LOW volume:

  • Review the range of the 28 upside from +0.89% (PSTI) to +11.27% (AXGN) while the 15 downside ranges from -0.20% (QURE) to -11.32% (KOOL -$0.036) with 2 flat closes (NTLA and BSTG);
  • Interesting stat: Volume DECREASED … look at the depth – 6 out of 28 of the upside had higher (than the 3 month average) volume while 6 out of the 15 downside experienced greater volume (than the 3 month average).

 

October sessions:

Tuesday closed POSITIVE with 15 decliners, 28 advancers and 2 flat;

Monday closed NEGATIVE with 39 decliners, 5 advancers and 1 flat;

Friday closed NEGATIVE with 26 decliners, 18 advancers and 1 flat;

Thursday closed POSITIVE with 7 decliners, 37 advancers and 1 flat;

Wednesday closed NEGATIVE with 41 decliners, 3 advancers and 1 flat;

Tuesday closed NEGATIVE with 23 decliners, 21 advancers and 1 flat;

Monday closed NEGATIVE with 33 decliners, 11 advancers and 1 flat;

Friday closed NEGATIVE with 34 decliners, 8 advancers and 3 flat;

Thursday closed NEGATIVE with 36 decliners, 8 advancers and 1 flat;

Wednesday closed NEGATIVE with 25 decliners, 19 advancers and 1 flat;

Tuesday closed POSITIVE with 4 decliners, 39 advancers and 2 flats;

Monday closed NEGATIVE with 26 decliners, 17 advancers and 2 flats;

Friday closed POSITIVE with 9 decliners, 35 advancers and 1 flat;

Thursday closed NEGATIVE with 38 decliners, 7 advancers and 0 flat;

Wednesday closed NEGATIVE with 42 decliners, 2 advancers and 1 flat;

Tuesday closed NEGATIVE with 23 decliners, 18 advancers and 4 flats;

Monday closed NEGATIVE with 34 decliners, 10 advancers and 1 flat;

Friday closed NEGATIVE with 26 decliners, 17 advancers and 2 flat;

Thursday closed NEGATIVE with 35 decliners, 8 advancers and 2 flat;

Wednesday closed POSITIVE with 16 decliners, 27 advancers and 2 flat;

Tuesday closed NEGATIVE with 32 decliners, 12 advancers and 1 flat

Monday (10/1) closed NEGATIVE with 33 decliners, 13 advancers and 1 flat;

  • 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

 

 

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.