RegMed Investors’ (RMi) pre-open: the sector is like a phoenix rising from the ashes

February 25, 2020 8:35am

Valuations were stretched and pricing was overbought, any reason or another especially the coronavirus would have upset the economic wagon train

Back from a short vacation having missed the carnage

Pre-open indications:  BUY

Whether information or intelligence is good, bad or somewhere in between; I put into context what is relevant and useful for investors.

Dow future are UP +0.55% (+137 points), S&P futures are UP +0.53% (+17 points) and NASDAQ futures are UP +0.90% (+82 points)

U.S. stock index futures pointed to gains following the market’s nastiest sell-off in two years on concerns the coronavirus outbreak would dent global economic growth;

European markets gave up a short-lived recovery effort as investors weigh concerns over the spread of the coronavirus in Italy as the pan-European Stoxx 600 gave up early gains to fall another -0.8%;

Asia Pacific markets suffered as Japan saw sharp declines, Chinese markets were mixed, South Korea the was down on new virus alerts, Australia declined yet Hong Kong was up following the plunge in U.S. markets while the MSCI Asia ex-Japan index was 0.2% higher.

Henry’omics:

Investors should dribble back having fled stocks over intensified fears the coronavirus was spreading and effecting an economic slowdown.

Timely insights have line extensions within or to a volatile pricing universe. Thus, my line in writing is separating actionable numbers or intelligence and news into a short-term investment thesis to tackle the “unknown unknowns”

Will we ever learn, big swings follow even bigger dips – yesterday, the Dow sank more than 1,000 points, suffering its biggest point and percentage drop since February 2018. The S&P 500 plunged 3.3%, also the worst drop in two years. With Monday’s declines, the S&P 500 and the Dow both wiped out all of their 2020 gains.

While many talk about the shift in alternating sentiment, I monitor the pulse and focus of possible outcomes!

In China, the National Health Commission reported 508 new confirmed cases and 71 new deaths, as of Feb. 24. South Korea, which has the highest number of coronavirus cases outside China, reported a jump of 60 new cases, bringing the country’s total to 893 infected <CNBC>.

Monday night: just returned from a short vacation.

• the NASDAQ closed DOWN -355.31 points (-3.71%)
• the IBB closed down -2.63% and XBI closed down -3.43%
• the close was negative with an A/D line of 5/30, 0 flat of 35 covered;
• the range of the 5-upside was +0.11% (BLCM) to +11.21% (BCLI) while the 30-downside ranged from -0.68% (AXGN) to -9.51% (CLLS);
• 4 out of the 5-upside had higher than the 3-month average volume;
• 9 out of the 30-downside had higher than the 3-month average volume;

Q1:

February registered 4 negative, 8 positive closes, 3 vacation days and 1 holiday – so far.

January registered 9 negative, 10 positive closes and 2 holidays.

Q4:

• December register 11 negative and 10 positive closes
• November registered 1 holiday, 12 positive and 8 negative close;
• October registered 10 positive, 1 neutral and 14 negative 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.