October 16, 2019 8:27am
Investors are reducing risk as machines and algorithms ram the sector higher with lows to follow?
Which short glass do you have, the half full of half empty one?
Perception and sentiment have merged and been regurgitated in follow-on moves
Insight is about understanding perception and is putting into context what is relevant to expectation fulfillment …
But cannot be imaginative in considering explanations for missing, confusing and often contradictory data while human analysis is able to identify one’s own biases and expectation of what the data might/should/could show!
Dow futures are DOWN -0.17% (-47 points), S&P futures are DOWN -0.21% (-6 points) and NASDAQ futures are DOWN -0.28% (-22 points)
Dow, S&P and NASDAQ futures are marginally lower as investors closely monitor Brexit developments;
European stocks traded lower as U.K. politicians grind out a Brexit deal between the U.K. and the EU as the pan-European Stoxx 600 slipped -0.2% lower in early trade;
Asia Pacific markets were mixed by the close on Wednesday, as news overnight boosted Brexit optimism; all but mainland China jumped as the Shanghai composite and the Shenzhen component declining.
Data docket: retail sales for September and a business leader’s survey for October will be released at around 8:30 a.m. ET. Business inventories for August and the latest monthly survey from the National Association of Home Builders (NAHB) will follow slightly later in the session.
The pre-market moves come as investors closely monitor Brexit developments.
However, China’s Foreign Ministry said Wednesday that it would take countermeasures against the U.S. in response to a bill that favors Hong Kong protesters. It comes less than 24 hours after the U.S. House of Representatives passed a bill that requests various government departments to consider whether political developments in Hong Kong require the U.S. to change the region’s special trading status <CNBC>.
I write about Brexit and Asia Pacific but, I care about “our” universe of cell and gene therapy companies but, we are stuck between a rock and a hard place – macro forces keeps us bouncing.
I have been watching more carefully the movements of the iShares NASDAQ Biotechnology (IBB) in relation to the SPDR S&P ETF (XBI) indicators:
- Tuesday, the IBB closed up +1.84% while the XBI closed up +1.91%
- Monday, the IBB closed up +0.38% while the XBI closed down -0.18%
- Friday, the IBB closed up +1.24% while the XBI closed up +1.07%
- Thursday, the IBB closed up +1.25% while the XBI closed up +1.33%
- Last Wednesday the IBB closed up +0.14% while the XBI closed down -0.33%
- The previous Tuesday the IBB closed down -1.80% and the XBI closed down -1.52%
And bounces seem inevitable after big moves with small volume – the foundation is cracked with an inability to stabilize pricing.
Tuesday night’s newsletter heading: “the oversold were on the road to a comeback until we reach the fork of turning overbought. The downside apparition stalks “our” universe and it’s not yet Halloween.”
- The NASDAQ closed up +100.06points (+1.24%);
- The close was positive with an A/D line of 32/9, 1 flat, 1 reversed merged (HSGX) and 2 acquired;
- The range of the 32 upside was +0.27% (PSTI) to +8.36% (RGNX) while the 9 downside ranged from -0.12% (BLFS) to -19.74% (KOOL);
- 4 out of the 32 upside had higher than the 3 month average volume;
- 3 out of the 9 downside had higher than the 3 month average volume;
- October registered 5 positive, 1 neutral and 6 negative close, so far …
- September, there were 1 holiday, 11 negative, 7 positive and 2 non reported sessions;
Companies in my headlights – It’s your decision; I provide an idea and context:
*** I HATE to be repetitive but, I’m STILL following the trading herd … mindful of upcoming quarterly results and their effect upon share pricing … BUY and get trampled in the coming sessions or SELL into strength or just HOLD and wait to resolve relieve the anxiety until value returns.
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.