November 2, 2018 6:13pm

Investors need to be more tactical going forward as optimism seems to be fading

As I had stated, “Appreciate these few upside days as the next weeks of quarterly result announcements could DRAW SOME BLOOD.” And, you saw why today …

Volatility is still drawing blood

 

Pre-open indications: 2 HITs and 3 MISS

Out and about: An advisory panel to the U.S. FDA on Friday recommended Sage Therapeutics (SAGE) experimental treatment for postpartum depression, saying the benefits of the drug outweighed risks. The panel voted 17-1 in favor of the injectable treatment, Zulresso, which aims to treat major episodes of depression during pregnancy or within four weeks of delivery. All members voted in favor of the treatment's efficacy, while an overwhelming majority backed it on its safety.

 

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 down -109.91 points or -0.43% to 25,270.83
  • The S&P closed down -17.31 points or -0.63% to 2,723.06
  • The NASDAQ closed down -77.06 points or -1.04% to 7,356.99

 

From the pre-open newsletter, “strength is to be bought and sold into. I still pay attention to aftermarket and pre-open indications as the stimulus of sector traffic initiative. CAUTION in November … Q3 results will befuddle investor’s belief in a sustainable rally until they’re completed!”

 

The advance/decline line scenario of 45 covered companies:   

  • The open was positive with an A/DL of 30/11 and 4 flats;
  • The mid-day was negative with an A/DL of 22/23 and 0 flats;
  • The close was barely positive with an A/DL of 22/20 and 3 flat;

 

Pre-open indications:  2 HITs and 3 MISS

  • bluebird bio (BLUE) closed up +$2.54 – miss;
  • CRISPER Therapeutics (CRSP) closed up +$1.21 – hit;
  • Editas Medicine (EDIT) closed up +$0.54 – miss;
  • Fate Therapeutics (FATE) closed up +$1.14 – miss;
  • Sage Therapeutics (SAGE) closed flat at $137.55 – hit, as the stock was halted;

 

Five (5) key metrics: 

… The greatest volume to the downside: ADVM, HSGX, VSTM, SGMO and GBT

… Upside volume was weighted to:  FATE, MDXG, BLUE, XON and CRSP

… Weakness ($) to the downside:  ONCE (-$1.85), AXGN (-$1.34), ADVM (-$1.21), QURE (-$1.19) and GBT (-$0.86)

… Best moves ($) to the upside:  BLUE (+$2.54), SLDB (+$2.54), CRSP (+$1.21), FATE (+$1.14) and RGNX (+$0.68)

… The iShares NASDAQ Biotechnology (IBB) closed:

  • Friday was up +0.03% after indicating a negative -0.06% in the pre-market;
  • Thursday was up +3.84 % after indicating a positive +0.9% in the pre-market;
  • Wednesday was up +0.42% after indicating a positive +0.4% in the pre-market;
  • 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;
  • Last Friday was down -0.37% after indicating a negative -1.51% in the pre-market;

 

Henry’omics:

As the market indexes closed down, the sector barely closed positive (check the A/DL).

Do investors really want to be LONG over these weekends?

The major indexes pared some of their losses after President Donald Trump told reporters the U.S. and China are much closer to striking a deal on trade, saying the two countries will have a good deal in place <CNBC>.

Are you ready for next week’s roll-out of LPS (loss-per-share) quarterly results – I count five (5) so far!

Another I told you so ---  Intellia therapeutics (NTLA) closed down -$0.27 after their quarterly results and NOT noticing their trial delay until the conference call - more than a communication breakdown - utter contempt for investors!

Volume and sector trafic indicators :

Review the range of the 22 upside from +0.15% (ALNY) to +8.38% (FATE) while the 20 downside ranges from -0.19% (VSTM) to -25.59% (ADVM) with 3 flat closes (ATHX, ONVO and RENE.L).

KEY stat:

  • 5 out of 22 of the upside had higher (than the 3 month average) volume
  • 8 out of the 20 downside experienced greater volume (than the 3 month average).

 

November sessions:

Friday closed POSITIVE with 20 decliners, 22 advancers and 3 flats;

Thursday (11/1) closed POSITIVE with 3 decliners, 42 advancers and 0 flat;

  • In 23 sessions in October – there were 17 negative closes and 6 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

 

 

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.