December 2, 2019 5:19pm

As I stated in the morning post, “The only long, I will consider is an elongated piece of Entenmamans as tensions exist between liquidity and fundamentals!”

Presenting alternative hypotheses clarifies material facts and evidence available to investors. “Devil’s Advocacy” also provides greater confidence that the current sector outlook will hold-up to close scrutiny!

 

The remainder of the month’s trading sessions will be critical for the RegMed sector which will establish whether today’s reaction to November events is short-lived, or a continuation of a more fundamental correction. 

 

The Dow closed DOWN -203.75 (-0.82%), the S&P closed DOWN -26.99 points (-0.86%) and the NASDAQ closed DOWN -97.48 points (-1.12%)

 

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

  • Monday the IBB closed down -1.20% while the XBI closed down -1.33%
  • Friday the IBB closed up +0.22% while the XBI closed up +0.25%

 

The advance/decline line scenario of 45 covered companies:

  • Monday the close was negative with an A/D line of 14/26, 2 flats, 1 reversed merged (HSGX) and 2 acquired;
  • Friday the close was positive with an A/D line of 26/15, 1 flat, 1 reversed merged (HSGX) and 2 acquired;

 

Henry’omics:

Sector equities closed lower on Monday the first trading day of December, as markets felt the disappointment of manufacturing data along with the nothingness of trade news.

December’s initiation capped a month that featured non-sustainable yet, recent gains while investors took money off the table.

 

When is it wrong to be RIGHT in sector prognosis?

It was time for many to clear their minds of machine-driven optimism and face the realities of this market and the timing of year end approaching.

 

The Cboe Volatility Index, which is regarded as the best fear gauge in the market, rose to 14.3 from 12.6:

  • 9 out of today’s 14 upside had higher than the 3 month average volume;
  • 12 out of today’s 26 downside had higher than the 3 month average volume;

From this a.m.’s “Data Docket”: Manufacturing activity in the U.S. continued to contract last month, the Institute for Supply Management said. The ISM Manufacturing PMI dipped to 48.1 in November. That’s below an estimate of 49.4.

 

It's a daunting task to understand risk, seeing the unforeseen; on the basis of my own “rules”, I set-up my own “warning analysis” which isn’t machine oriented! 

 

Decliners:

  • CRISPR Therapeutics (CRSP -$3.03 after Friday’s +$3.54,  Wednesday’s -$0.65, Tuesday’s +$3.09 and last Monday’s +$3.47 – post offering);
  • Sage Therapeutics (SAGE -$2.56 after Friday’s +$3.87, Wednesday’s +$0.71, Tuesday’s -$1.86 and last Monday’s +$3.05);
  • Fate Therapeutics (FATE -$1.44);
  • Regenxbio (RGNX -$1.18);
  • BioLife Solutions (BLFS -$0.98);

Incliners:

  • Global Blood Therapeutics (GBT +$2.89);
  • Alnylam Pharmaceuticals (ALNY +$1.44 after Friday’s -$0.42, Wednesday’s -$1.50,Tuesday’s +$6.64 and last Monday’s +$5.51);
  • Homology Medicine (FIXX +$1.14);
  • Cellectis SA (CLLS +$0.43);
  • Solid Biosciences (SLDB +$0.39);

 

The percentage (%) indicators:

  • Monday’s range of the 14 upside was +0.14% (ONCE) to +9.92% (SLDB) while the 26 downside ranged from -0.11% (IONS) to -9.22% (FATE); 
  • Friday’s range of the 26 upside was +0.05% (ADVM) to +7.31% (KOOL) while the 15 downside ranged from -0.02% (ONCE) to -5.94% (CLBS); 

 

Upside volume stats:  to compare

  • Monday: 9 out of the 14 upside had higher than the 3 month average volume;
  • Friday: 6 out of the 26 upside had higher than the 3 month average volume;

Downside volume stats:

  • Monday: 12 out of the 26 downside had higher than the 3 month average volume;
  • Friday: 2 out of the 15 downside had higher than the 3 month average volume;

 

2 flat – ADRO and RENE.L with 1 reverse merged (HSGX), 2 acquired (AST & OSIR) and Spark Therapeutics’ (ONCE) acquisition by Roche could be soon according to rumors from FTC by year’s end.

 

December’s sessions:

Monday closed NEGATIVE with 26 decliners, 19 advancers, 2 flats and 2 acquired (AST & OSIR) and 1 reversed (HSGX);

 

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.