May 29, 2019 6:36pm

The sustainability damage is done again as traders fled the sector blaming sentiment and trade war with no sign of resolution

Pre-open indications: 3 HITs and 1 MISS

The remainder of the month’s trading sessions will be critical for the RegMed sector which will establish whether market reaction to headline news is temporary and short-lived, or if this current upside will continue to a more fundamental correction.  

 

The Strange Case of Dr. Jekyll and Mr. Hyde might make for a great read, but it’s far less fun when the markets act like it’s their blueprint.

 

Markets and indexes:

  • The Dow closed down -221.36 points or-0.87% to 25,126.41
  • The S&P closed down -13.97 points or -0.69% at 2,783.02
  • The NASDAQ was down -60.04 points or -0.79% to 7,547.31

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Henry’omics:

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

Sector equities and indexes fell on Wednesday as …

Each of the major U.S. indexes suffered their fourth decline in five sessions. The S&P is down 5.5% from its April 30 closing high. However, both the S&P 500 and NASDAQ managed to close just above their 200-day moving averages, seen as a key level of support <Reuters>.

Bond yields declined again, triggering concerns about the economic outlook. Increasing trade tensions in the China-U.S. trade fight also weighed on markets.

The small-capitalization Russell 2000 index (RUT -0.94%) which should be more resilient to trade-war issues but tend to reflect growing domestic slowdown worries; has fallen nearly 7.7% since May 3 and is off more than 14% from its August 31 peak.

The S&P 500 broke below 2,800, a key technical level watched by traders. The broad index also traded around its lowest level since late March <CNBC>.

The major stock indexes were headed for their first monthly decline of 2019. The Dow and S&P 500 were both down more than 6% through Wednesday’s session while the NASDAQ is down more than 6%.

Pre-open post: “rock paper scissors in some days and many sessions it seems like a game played to initiate trading. Remember, if you choose Rock, you will win against Scissors but lose against Paper; if you choose Scissors, you will win against Paper but lose against Rock and if you choose Paper, you will win against Rock but lose against Scissor.”

The S&P 500 SPX, -0.69% is trading at or near its 200-day moving average, at 2,776.04, as of Wednesday afternoon trade. A breach below that point would represent a longer-term bearish momentum shift for the broad-market index. Market technicians tend to view moving averages as the demarcation between bullish and bearish momentum in an asset <MarketWatch>.

 

Pre-open indications: 3 HIT and 1 MISS

  • BioMarin Pharmaceuticals (BMRN) closed down -$1.55 – miss;
  • CRISPR Therapeutics (CRSP) closed up +$0.14 – hit;
  • Editas Medicine (EDIT) closed down -$0.28 – hit;
  • Intellia Therapeutics (NTLA) closed down -$0.29 – hit;

 

Wednesday’s advance/decline line scenario of 45 covered companies:  

  • The open was negative with the A/DL at 6/36, 1 flat and 2 acquired (AST & OSIR);
  • The close was negative with an A/DL of 12/28 and 3 flats and 2 acquired;

 

Upside volume stats:  review the numbers, there is a message …

  • Wednesday: 5 out of the 12 upside had higher than the 3 month average volume;
  • Tuesday: 6 out of the 16 upside had higher than the 3 month average volume;
  • Monday was a holiday

Downside volume stats: here is where the session landing is expressed …

  • Wednesday: 9 out of the 28 downside had higher than the 3 month average volume;
  • Tuesday: 8 out of the 27 downside had higher than the 3 month average volume;
  • Monday was a holiday

 

Cell and gene therapy company’s worst-performers were:

  • Wednesday: RENE.L (-$15.00), RGNX (-$2.27), BMRN (-$1.55), QURE (-$1.36) and BLUE (-$1.35);
  • Tuesday: BMRN (-$4.57), QURE (-$1.20), SAGE (-$1.03), ALNY (-$0.80) and BLFS (-$0.77);
  • Monday was a market holiday

Sector equities posting gains were:

  • Wednesday: BLFS (+$0.78), GBT (+$0.22), AXGN (+$0.20), FIXX (+$0.18) and ADRO (+$0.18);
  • Tuesday: RENE.L (+$10.00), RGNX (+$3.28), FATE (+$1.28), GBT (+$1.04) and ONCE (+$0.80);
  • Monday was a market holiday;

 

The week’s percentage (%) indicators: 

  • Wednesday’s range of the 12 upside was +0.21% (SGMO) to +5.50% (ADRO) while the 28 downside ranged from -0.12% (SAGE) to -14.74% (ONVO);
  • Tuesday’s range of the 16 upside was +0.07% (RARE) to +7.19% (RGNX) while the 27 downside ranged from -0.09% (ONVO) to -12.71% (BLCM);
  • Monday was a holiday

3 flat – VSTM, BSTG and CLBS with 2 acquired (AST & OSIR) and the Spark Therapeutics’ (ONCE) acquisition by Roche still being delayed

 

The iShares NASDAQ Biotechnology (IBB) indicator:

  • Wednesday closed down -1.12%;
  • Tuesday closed down -1.25%;
  • Monday was a holiday
  • Friday closed up +0.41%

 

May’s sessions:

Wednesday closed NEGATIVE with 28 decliners, 12 advancers, 3 flats and 2 acquired (AST & OSIR);

Tuesday closed NEGATIVE with 27 decliners, 16 advancers, 0 flats and 2 acquired (AST & OSIR);

Monday was a market holiday;

Friday closed POSITIVE with 12 decliners, 29 advancers, 2 flats and 2 acquired (AST & OSIR);

Thursday closed NEGATIVE with 34 decliners, 7 advancers, 2 flats and 2 acquired (AST & OSIR);

Wednesday closed NEGATIVE with 31 decliners, 12 advancers, 0 flat and 2 acquired (AST & OSIR);

Tuesday closed POSITIVE with 8 decliners, 31 advancers, 4 flat and 2 acquired (AST & OSIR);

Monday closed NEGATIVE with 31 decliners, 11 advancers, 1 flat and 2 acquired (AST & OSIR);

Friday closed NEGATIVE with 33 decliners, 8 advancers, 2 flat and 2 acquired (AST & OSIR);

Thursday closed POSITIVE with 12 decliners, 29 advancers, 2 flat and 2 acquired (AST & OSIR);

Wednesday closed POSITIVE with 14 decliners, 29 advancers, 0 flat and 2 acquired (AST & OSIR);

Tuesday closed POSITIVE with 13 decliners, 30 advancers, 0 flat and 2 acquired (AST & OSIR);

Monday closed NEGATIVE with 39 decliners, 4 advancers, 0 flat and 2 acquired (AST & OSIR);

Friday closed NEGATIVE with 22 decliners, 21 advancers, 0 flat and 2 acquired (AST & OSIR);

Thursday closed NEGATIVE with 23 decliners, 20 advancers, 0 flat and 2 acquired (AST & OSIR);

Wednesday closed POSITIVE with 18 decliners, 24 advancers, 1 flat and 2 acquired (AST & OSIR);

Tuesday closed NEGATIVE with 36 decliners, 6 advancers, 1 flat and 2 acquired (AST & OSIR);

Monday closed POSITIVE with 8 decliners, 32 advancers, 3 flat and 2 acquired (AST & OSIR);

Friday closed POSITIVE with 4 decliners, 37 advancers, 2 flat and 2 acquired (AST & OSIR);

Thursday closed NEGATIVE with 23 decliners, 17 advancers, 3 flat and 2 acquired (AST & OSIR);

Wednesday (5/1) closed NEGATIVE with 30 decliners, 12 advancers, 1 flat and 2 acquired (AST & OSIR);

 

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.