March 11, 2020 5:29pm
There will be blood on your hands but, a band aid will halt the flow as share pricing will response to grossly oversold conditions
Q4 and FY19 earnings results: Verastem Oncology (VSTM -$0.54) and BioLife Solutions (BLFS -$0.95)
The sector is what it is, until it isn’t and even then, it doesn’t seem to be … when you point one finger, there are three fingers pointing back at you!
The Dow closed DOWN -1464.63 points (-5.85%), the S&P closed DOWN -140.85 points (-4.89%) while the NASDAQ closed DOWN -392.20 points (-4.70%)
New lows were met today as markets grapple with the spread of the virus and uncertainty around a fiscal response to curb market declines.
Checking the numbers, “The S&P 500 (SPX) -4.88%, the Dow (DJIA) -5.85%, and the Nasdaq -4.7% all lost around 19% — just shy of the 20% decline which commonly signifies a bear market — from the Feb. 19 closing peak through Monday’s closing lows. Yet the Health Care Select SPDR ETF XLV, -3.82% lost 11.5% during that time, and even the iShares Nasdaq Biotechnology ETF IBB, -4.75% shed only 11.2%. <MarketWatch>
Markets continued their downward slide following disappointment that the White House did not release details of its fiscal response to the coronavirus
I follow the dictum, quoting Churchill that “short words are best, and the old words when short are best of all.”
We are all reacting to the panic as electronic trading “rules” the markets and sector’s declines – the human element is missing!
Why … are health-care stocks outperforming in the midst of an emerging pandemic; some of it may be because certain sectors — like biotech — will likely be part of the solution.
Repeating myself, “Ask yourself, do you know why you own certain equity? What’s been communicated re a company’s status at any given time to shareholders other than quarterly reports or a once-upon-a-time press release!”
The remainder of the month’s trading sessions will be critical for the RegMed sector which will establish whether market reaction to recent events is temporary and short-lived as there … will be a fundamental correction – not quite sure when but short-term plays are in vogue and near and long-term plays are not for the faint hearted but, should be enduring.
The problem is, machines and algorithms are “filling or killing” the pockets of electronic trading!
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Wednesday, the IBB closed down -5.34% and XBI closed down -5.79%
- Tuesday, the IBB closed up +2.31% and XBI closed up +2.26%
- Monday, the IBB closed down -6.80% and XBI closed down -8.06%
The advance/decline line scenario of 35 covered companies:
- Wednesday, the close was negative with an A/D line of 2/32, 1 flat of 35 covered;
- Tuesday, the close was positive with an A/D line of 24/10, 1 flat of 35 covered;
- Monday, the close was negative with an A/D line of 3/32, 0 flat of 35 covered;
Wednesday’s (only 2) incliners:
- Biostage (BSTG +$0.10 after Tuesday’s -$0.38 and Monday’s +$0.02);
- Bellicum pharmaceuticals (BLCM +$0.09);
Wednesday’s (lowest 5) decliners:
- Alnylam Pharmaceuticals (ALNY -$7.50 after Tuesday’s -$0.57);
- Global Blood Therapeutics (GBT -$6.89);
- bluebird bio (BLUE -$4.66);
- Sage Therapeutics (SAGE -$3.99);
- Regenxbio (RGNX -$3.93);
The percentage (%) indicators:
- Wednesday’s the range of the 2-upside was +1.25% (BLCM) to +2.94% (BSTG +$0.10) while the -32downside ranged from -2.65% (CLBS) to -19.13% (MESO);
- Tuesday’s the range of the 24-upside was +0.27% (FIXX) to +21.04% (MESO) while the 10-downside ranged from -0.20% (STML) to -16.29% (ADRO);
- Monday’s the range of the 3-upside was +0.53% (BSTG) to +16.53% (BSTG +$0.02) while the 30-downside ranged from -3.02% (ALNY) to -22.31% (PGEN);
Upside volume stats: to compare
- Wednesday: 0 out of the 2-upside had higher than the 3-month average volume;
- Tuesday: 11 out of the 24-upside had higher than the 3-month average volume;
- Monday: 2 out of the 3-upside had higher than the 3-month average volume;
Downside volume stats:
- Wednesday: 20 out of the 32-downside had higher than the 3-month average volume;
- Tuesday: 5 out of the 10-downside had higher than the 3-month average volume;
- Monday: 24 out of the 32-downside had higher than the 3-month average volume;
1 flat – RENE.L
Wednesday closed negative with 32 decliners, 2 advancers and 1 flat
Tuesday closed positive with 10 decliners, 24 advancers and 1 flat
Monday closed negative with 32 decliners, 3 advancers and 0 flats
Friday closed negative with 29 decliners, 4 advancers and 2 flats
Thursday closed negative with 24 decliners, 11 advancers and 2 flats
Wednesday closed positive with 3 decliners, 30 advancers and 2 flats
Tuesday closed negative with 26 decliners, 7 advancers and 2 flats
Monday closed positive with 11 decliners, 24 advancers and 0 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.