August 14, 2019 9:13pm

Investors are getting spooked as there were no “stay out of the market’s water” signs

Pre-open indication: many (sector equities) will remain stuck in the mud of under-appreciated

Today’s tin could be tomorrow’s gold even as some go down!

Remember your favorites!

 

Investors need to think about their buying or selling pace, momentum while anticipating resistance and consider covering positions

 

Markets and indexes:

  • The Dow closed down -800.49 points or -3.05% to 25,479.42;
  • The S&P closed down -85.72points or -2.93% at 2,840.60;
  • The NASDAQ was down -242.42 or -3.02% to 7,773.94;

 

The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:

  • Wednesday the IBB closed down -2.23% while the XBI closed down -2.82%
  • Tuesday the IBB closed up +1.22% while the XBI closed up +1.38%
  • Monday the IBB closed down -1.25 % while the XBI closed down -1.88%

 

Henry’omics:

Sector equities were dramatically down with an advance/decline line of 9/33 after yesterday’s (Tuesday) 22/20.

What more can one say, I would run out and buy the dip but, I would be selectively buying favorites!

August has been a volatile month for the stock market so far. Including Wednesday, the Dow has moved more than 200 points in either direction on seven occasions. On August 5, the Dow plunged 767 points, or 2.9%. It then recovered some of those losses until Wednesday’s shellacking.

Markets plunged Wednesday in the Dow’s worst performance of 2019 after the bond market flashed a troubling signal about the U.S. economy.

“The U.S. equity market is on borrowed time after the yield curve inverts,” said Bank of America technical strategist Stephen Suttmeier, in a note.  There have been five inversions of the 2-year and 10-year yields since 1978 and all were precursors to a recession, but there is a significant lag, according to data from Credit Suisse. A recession occurred, on average, 22 months after the inversion, Credit Suisse shows. And the S&P 500 actually enjoyed average returns of 15% 18 months after an inversion before it eventually turns <CNBC>.

 

Pre-open post, “the sirens are going off as markets are getting squeezed after the U.S. bond market flashed a troubling signal about the U.S. economy.

 

The advance/decline line scenario of 45 covered companies:  

  • Wednesday the close was negative with an A/D Line of 9/33 and 1 flat and 2 acquired;
  • Tuesday the close was positive with an A/D Line of 22/20 and 1 flat and 2 acquired;
  • Monday the close was negative with an A/D Line of 13/29 and 1 flat and 2 acquired;

 

Decliners:

  • Bluebird bio (BLUE -$3.09);
  • Sage therapeutics (SAGE -$2.85);
  • BioMarin pharmaceuticals (BMRN -$1.75);
  • Ultragenyx (RARE -$1.47);
  • Vericel (VCEL -$1.23);

Incliners:

  • ReNeuron RENE.L +$1.50 after Tuesday’s-$9.00 and Monday’s +$11.00);
  • Solid Biosciences (SLDB +$1.23 after Tuesday’s -$0.64);
  • Adverum (ADVM +$0.65);
  • Voyager Therapeutics (VYGR +$0.59)
  • Editas Medicine (EDIT +$0.50)

 

The percentage (%) indicators: 

  • Wednesday’s range of the 9 upside was +0.06% (BOLD) to +23.79% (SLDB +$1.23) while the 33 downside ranged from -0.10% (ONCE) to -7.57% (CLLS);
  • Tuesday’s range of the 22 upside was +0.14% (BLUE) to +8.70% (KOOL +$0.24) while the 20 downside ranged from -0.08% (CLLS) to -11.02% (SLDB);
  • Monday’s range of the 13 upside was +0.12% (GBT) to +19.19% (AXGN) while the 29 downside ranged from -0.56% (IONS) to -8.82% (PSTI);

 

Upside volume stats:  to compare

  • Wednesday: 3 out of the 9 upside had higher than the 3 month average volume;
  • Tuesday: 5 out of the 22 upside had higher than the 3 month average volume;
  • Monday: 7 out of the 13 upside had higher than the 3 month average volume;

Downside volume stats: NOTICE

  • Wednesday: 9 out of the 33 downside had higher than the 3 month average volume;
  • Tuesday: 3 out of the 20 downside had higher than the 3 month average volume;
  • Monday: 7 out of the 29 downside had higher than the 3 month average volume;

 

1 flat – VSTM with 2 acquired (AST & OSIR) with the Spark Therapeutics’ (ONCE) acquisition by Roche still being delayed (SEPTEMBER?)

 

August’s sessions:

Wednesday closed NEGATIVE with 33 decliners, 9 advancers, 1 flat and 2 acquired (AST & OSIR);

Tuesday closed POSITIVE with 20 decliners, 22 advancers, 1 flat and 2 acquired (AST & OSIR);

Monday closed NEGATIVE with 29 decliners, 13 advancers, 1 flat and 2 acquired (AST & OSIR);

Friday closed NEGATIVE with 30 decliners, 11 advancers, 2 flats and 2 acquired (AST & OSIR);

Thursday closed POSITIVE with 11 decliners, 28 advancers, 2 flats and 2 acquired (AST & OSIR);

Wednesday closed NEGATIVE with 21 decliners, 19 advancers, 3 flats and 2 acquired (AST & OSIR);

Tuesday closed POSITIVE with 10 decliners, 32 advancers, 1 flat and 2 acquired (AST & OSIR);

Monday closed NEGATIVE with 41 decliners, 2 advancers, 0 flat and 2 acquired (AST & OSIR);

Friday closed NEGATIVE with 34 decliners, 8 advancers, 1 flat and 2 acquired (AST & OSIR);

Thursday closed POSITIVE with 19 decliners, 22 advancers, 2 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.