March 18, 2020 8:12am
Despite stimulus hopes, U.S. stock futures fell to their “limit down” levels in the early hours of the morning, indicating another rocky day
Pre-open indications: 3 BUYs and 9 SELLs
Having stated last night, “I believe we still haven’t found … BOTTOMS for “our” universe of cell and gene therapy sector!” and “Be aware, strong volume and dramatic upsides will be a target for the algorithmic electronic trading machines!”
March continues as a rollercoaster theme month – my version of the morning’s forecast is written to be informative; it’s what is about to happened
Dow future are DOWN -3.94% (- 821 points), S&P futures are DOWN -3.70% (-90 points) and NASDAQ futures are DOWN -4.44% (-328 points)
Stock futures pointed to big losses on Wednesday as the markets remained highly volatile;
European markets sank, despite Western governments promising to unleash billions of dollars to help businesses and citizens get through the coronavirus pandemic as the pan-European Stoxx 600 fell -4.5% during morning trade;
Asia Pacific fell, with Australia leading losses among the region’s major markets. The S&P/ASX 200 dropped 6.43% by the closing bell as the majority of sectors fell; South Korea, Mainland China 2 exchanges, Japan declined following the MSCI Asia ex-Japan index dropping 3.25%.
Data Docket: Weekly mortgage applications drop over 8% as interest rates jump briefly. Applications to refinance a home loan fell 10% last week from the previous week but were still 402% higher than a year ago, when rates were 81 basis points higher. Mortgage applications to purchase a home fell 1% for the week but were 11% higher than a year ago.
As the coronavirus has spread in the U.S., the sector has become extraordinarily volatile and subject to giving up quickly dramatic and inclining gains for the machines to profit!
Around 6:42 a.m. ET, futures on the Dow indicated a more than 1,000-point loss at Wednesday’s open. S&P 500 and Nasdaq-100 futures were also down. Futures contracts for the indices were in “limit down” territory, a situation where trading is halted after futures have hit a 5% loss and can go no lower. <CNBC>
We are stuck in an … alternating … volatility whirlwind – turn-off the electronic trading!
Review the last six (6) alternating closing bell sessions:
- Tuesday closed positive with 9 decliners, 26 advancer and x flat
- Monday closed negative with 34 decliners, 1 advancer and 0 flat
- Friday closed positive with 6 decliners, 29 advancers and 0 flat
- Thursday closed negative with 33 decliners, 2 advancers and 0 flat
- Wednesday closed negative with 32 decliners, 2 advancers and 1 flat
- Tuesday closed positive with 10 decliners, 24 advancers and 1 flat
Layer those above percentages (%) against the alternating iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Tuesday, the IBB closed up +7.32% and XBI also closed up +3.61%
- Monday, the IBB closed down -8.96% and XBI also closed down -12.53%
- Friday, the IBB closed up +6.34% and XBI closed up +6.44%;
- Thursday, the IBB closed down -8.85% and XBI closed down -10.89%
- 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%
The signal emphasizes … where is the share pricing GONG Show hook is going,
Another indicator to monitor, who and which management teams and BOD members are BUYING into these declines to express SUPPORT of share pricing?
Tuesday night’s title: “a stressed market and sector rebounds. Choppy and upside trading is the latest example of volatile markets rebounding from the worst day in more than three (3) decades, one step forward after one step back.”
- the NASDAQ closed UP +430.19 points (+6.23%)
- the IBB closed up +7.32% and XBI also closed up +3.61%
- the range of the 26-upside was +2.74% (SLDB) to +28.47% (FATE) the 9-downside ranged from -2.23% (ADVM) to -18.03% (BSTG -$0.55);
- 18 out of the 26-upside had higher than the 3-month average volume;
- 7 out of the 9-downside had higher than the 3-month average volume;
- March registered 7 negative and 5 positive closes
- February registered 9 negative, 9 positive closes, 3 vacation days and 1 holiday.
- January registered 9 negative, 10 positive closes and 2 holidays.
- December register 11 negative and 10 positive closes
- November registered 8 negative, 12 positive and 1 holiday closes;
- October registered 14 negative, 10 positive and 1 neutral closes;
Companies in my headlights – It’s your decision; I provide an idea and context:
Pre-open indications: all inclines are subject to be stripped of their value gradients
BUY to SELL: RARE, FATE, ALNY, BLUE (-$1.05 or -2.41% in pre-open; the gene editors - EDIT, CRSP, NTLA,
SELL: ATHX (+$0.28, what has company doe other than pay Chairman/CEO too much; VSTM – too big a jump of +$0,33, a possible take-down candidate, RENE.L – down in U.S. pre-market
BUY: VCEL (closed at $9.36) – the chart looks forlorn, down -$3.19 in six (6) sessions
BUY on director BUY; GBT – with Willie Brown, Director of the company spent a stonking $524k on stock at an average price of $52.37;
BUY on news: SAGE - announced next steps in the Landscape Program, the clinical program evaluating zuranolone (SAGE-217) for the treatment of postpartum depression (PPD) and major depressive disorder (MDD), following a Breakthrough Therapy guidance meeting with the FDA. SAGE has identified three potential pathways intended, if successful, to support a possible filing for approval of zuranolone in the U.S. in two novel indications – PPD and acute treatment of MDD when co-initiated with a new antidepressant – along with the previously disclosed development plan for the treatment of MDD as an episodic therapy.
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.