Indication intelligence, analysis and sector perception

RegMed Investors’ (RMi) closing bell: wild sector overreacts with panic in sentiment and market breadth by coronavirus fright and dread

February 27, 2020 5:15pm

A dynamic in play, a dislocation that doesn’t let investors hide anywhere but, are we truly in correction territory after today’s freefall?

Time to look for opportunity in these bottoms – look at cash positions and tread lightly until the full extent of the outbreak is known!

I make a commitment to provide need-to-know “facts in evidence” as equity’s volatility is one tactical signal for stocks.

The Dow closed DOWN -1190.95 points (-4.42%), the S&P closed DOWN -137.63 points (-4.42%) while the NASDAQ closed DOWN -414.30 points (-4.61%)

Henry’omics:

Indexes fell sharply in volatile trading Thursday as investors worried the coronavirus may be spreading in the U.S.

Those losses put the Dow and S&P 500 in correction territory, down more than 10% from its record close.

While the CBOE Volatility (VIX) was up +10.36% or +37.45%

A relentless six-day selloff pushed major indexes into market-correction territory on Thursday, defined as a drop of more than 10% from a recent peak. The move was attributed by investors largely to fears over the rapid spread of the COVID-19 virus outside of China. The Dow Jones Industrial Average DJIA, -4.42% ended the day with a loss of nearly 1,200 points, or 4.4%. The S&P 500 SPX, -4.42% dropped 4.4%. <MarketWatch>

The potential for an eventual “rip-roaring” rally could be a significance move after a vertical market drop from its all-time highs - a move that left little in the way of potential resistance.

What more can I say - I am NOT selling into a PANIC based market and we gone too far in liquidity risk.

Blame electronic machine algorithms and their agnostic “rules”.

Staying in Thursday’s, Wednesday, Tuesday and Monday’s pricing doghouse were:

bluebird bio (BLUE);
Regenxbio (RGNX);
uniQure NV (QURE);
Vericel (VCEL);
Sage Therapeutics (SAGE);

Breaking out of the pricing decline were:

Solid Bioscience (SLDB +$0.035)
Biostage (BSTG +$0.01 after Wednesday’s +$0.29);

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

Thursday the IBB closed DOWN -4.93% and XBI closed DOWN -3.96%
Wednesday the IBB closed UP +1.56% and XBI closed UP +0.49%
Tuesday the IBB closed down -3.04% and XBI closed down -2.83%
Monday, the IBB closed down -2.63% and XBI closed down -3.43%

The advance/decline line scenario of 35 covered companies:

Thursday, the close was negative with an A/D line of 2/33, 0 flat of 35 covered;
Wednesday, the close was negative with an A/D line of 17/ 18, 0 flat of 35 covered;
Tuesday, the close was negative with an A/D line of 4/31, 0 flat of 35 covered;
Monday, the close was negative with an A/D line of 5/30, 0 flat of 35 covered;

Thursday’s Decliners:

Sage therapeutics (SAGE -$11.64);
Regenxbio (RGNX -$6.99);
bluebird bio (BLUE -$5.92);
Alnylam Pharmaceuticals (ALNY -$5.56 after Wednesday’s -$1.24);
Global Blood Therapeutics (GBT -$4.07 after Wednesday’s +$0.79);

Thursday’s Incliners:

Solid Bioscience (SLDB +$0.035)
Biostage (BSTG +$0.01 after Wednesday’s +$0.29);

The percentage (%) indicators:

Thursday’s range of the 2-upside was +0.30% (BSTG) to +1.20% (SLDB) while the 33-downside ranged from -0.08% (AXGN) to -18.29% (SAGE);
Wednesday’s range of the 17-upside was +0.49% (PSTI) to +9.67% (BSTG) while the 18-downside ranged from -0.01% (BLUE) to -17.68% (BCLI);
Tuesday’s range of the 4-upside was +0.51% (VYGR) to +15.97% (BCLI) while the 31-downside ranged from -0.98% (FATE) to -16.99% (AXGN);
Monday’s 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);

Upside volume stats: to compare

Thursday: 0 out of the 2-upside had higher than the 3-month average volume;
Wednesday: 2 out of the 17-upside had higher than the 3-month average volume;
Tuesday: 2 out of the 4-upside had higher than the 3-month average volume;
Monday: 4 out of the 5-upside had higher than the 3-month average volume;

Downside volume stats:

Thursday: 22 out of the 33-downside had higher than the 3-month average volume;
Wednesday: 4 out of the 18-downside had higher than the 3-month average volume;
Tuesday: 10 out of the 31-downside had higher than the 3-month average volume;
Monday: 10 out of the 30-downside had higher than the 3-month average volume;

0 flat

February

Thursday closed negative with 33 decliners, 2 advancers and 0 flat

Wednesday closed negative with 18 decliners, 17 advancers and 0 flat

Tuesday closed negative with 31 decliners, 4 advancers and 0 flat

Monday closed negative with 30 decliners, 5 advancers and 0 flats

Friday vacation

Thursday vacation

Wednesday closed positive with 10 decliners, 25 advancers and 0 flat

Tuesday closed positive with 16 decliners, 18 advancers and 1 flat

Monday markets were closed for President’s Day holiday

Friday closed negative with 19 decliners, 14 advancers and 2 flats

Thursday closed negative with 20 decliners, 13 advancers and 2 flats

Wednesday closed positive with 8 decliners, 26 advancers and 1 flat

Tuesday closed positive with 12 decliners, 22 advancers and 1 flat

Monday closed positive with 6 decliners, 26 advancers and 3 flats

Friday closed negative with 26 decliners, 9 advancers and 0 flat

Thursday closed negative with 23 decliners, 12 advancers and 0 flat

Wednesday closed positive with 5 decliners, 27 advancers and 3 flats

Tuesday closed positive with 5 decliners, 30 advancers and 0 flats

Monday (2/3) closed positive with 8 decliners, 24 advancers and 3 flats

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.

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My motto … never leave an investor uninformed! I say today what others won’t, so you can do what others can’t.

My name is Henry McCusker; I endorse these opinions under my own name and with a subscription based membership.

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Editor and Publisher ... Henry McCusker enters his tenth (10th) year at RegMed Investors with past experience in sell-side analysis, buy-side management, corporate management and due diligence.

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Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities referred to in this publication.