March 20, 2020 5:40pm
Stop the slide of a tilted “floor” of share pricing which is subsidized by market emotions until they are put in check by an infection reduction and vaccine or therapeutic
Pre-open indications: 6 HITs < (FATE -$2.08), (AGTC +$0.12), (ATHX -$0.07), (BLUE +$2.17), (NTLA -$0.41), (SGMO -$0.12) > and 1 MISS <(CRSP -$0.61)>as I stated to sell into yesterday’s strength with my concern of sustainability as the ‘soulless ‘machines kill many upsides
The week in review ... stinky
Welcome to my world of defining the “grey’ in our universe!
The Dow closed DOWN -913.21 points (-4.55%), the S&P closed DOWN -104.47 points (-4.34%) while the NASDAQ closed DOWN -271.06 points (-3.79%)
Indexes attempted to rally on Friday, but failed, concluding one of the most volatile weeks.
Cell and gene therapy sector stocks slashed yesterday’s gains on Friday as the “machines” – electronic trading and algorithms investors concluded a wild volatility fueled panic week, fired by the Wuhan virus, coronavirus or COVID-19’s – all names work and a ‘witching” Friday which contributed to the market and sector declines.
- From the title, “quadruple witching is the quarter-end expiration of options and futures on indexes and individual stocks.”
My 35 covered sector companies experienced a shortened pricing appeal today, Friday as the Advance/Decline (A/D) line opened down at 15/20, by 11:30 a.m. was 19/15, hitting the mid-day at 17/17 while proceeding to the 3 p.m. hour at 8/25 and 2 flats to end or close with an A/D line of 11/23 and 1 flat - that’s what I call pricing migration!
The Dow is down 17% for the week and was on pace for its biggest one-week fall since October 2008, when it slid 18.2%. The S&P 500 has lost more than 13% week to date after dropping another 11.5% last week while the Nasdaq has fallen 12.6%.
- The Dow remains 32% below its all-time high level from February, while the S&P 500 is 29% below its high;
- An options trading strategy known as gamma hedging, levered exchange-traded funds and other instruments, as well as systematic flows, have contributed to huge swings of 10% in both directions and pushed the CBOE Volatility index (VIX) to record highs;
- About a third (1/3rd) of short gamma expired today (Friday);
- “This should reduce the chop and volatility going forward. Also given the weekly market seasonality, post expiry week reversion should be a net positive for the market,” Marko Kolanovic, JPMorgan;
- Another positive for stocks could be the month-end rebalancing over the next 10 days. The outperformance of bonds over stocks means that portfolio managers will have to rebalance their holdings by buying stocks ahead of month-end <CNBC>;
- Kolanovic said “the rebalancing could result in a 4% outperformance of stocks during the last week of the month. He said the impact could be even larger due in part to low liquidity”;
- I couldn’t have said it better as it has been my theme for the week!
Also, the CBOE Volatility Index (VIX) traded down Friday -5.96 points or -8.28% following Thursday’s -4.45 points or -5.82% following Wednesday’s up +0.54 or +0.71%, Tuesday’s down -6.78 points or -8.20% at 75.91 following Monday’s highest volatility close at +24.86 or +42.99%.
The number of confirmed U.S. coronavirus cases has surged to at least 16,018 after Wednesday’s toll of 6,400, up from Tuesday’s 4,281 cases confirmed while the death count has broken at least 210. <John Hopkins University>
It was stated and read by many in the Boston Globe, a daily newspaper that, “biotech’s are taking hits in trials, financings and more” especially in one, the loss of all of the same in addition to all its management and board of director (BOD) talent. <Adam Feuerstein of STAT>
I am extrapolating and postulating!
In parsing from the Boston Globe, “regulatory reviews and limits” are in vogue on clinical initiatives and to “expect investor and financing challenges” – never better said concerning recent approvals.
“it’s isn’t alarmist, it’s a realistic view … that is” that should have been anticipated!
“Clinical trials are in a danger spot although it’s too early to tell the full impact” will be? – Tell that to the idiots who don’t pay their bills to vendors, consultants and soon to be employees!
“Missing data” from filings is going to come out and those responsible will be hiring lawyers instead of new vendors.
Eh tu, Brutus, a Latin sentence meaning “Even you, Brutus?” from the play Julius Caesar, by William Shakespeare. Caesar utters these words as he is being stabbed to death, having recognized his friend Brutus among the assassins.
As always, the question is … who is part of the solution and not the initiator of the problem!
Never forget shareholders have the rights to sue!
As a finale, “never get in an argument with somebody who buys ink by the barrel”!
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Friday, the IBB closed down -3.02% and XBI also closed down -1.45%
- Thursday, the IBB closed up +2.78% and XBI also closed up +5.76%
- Wednesday, the IBB closed down -2.93% and XBI also closed down -2.94%
- 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%
The advance/decline line scenario of 35 covered companies:
- Friday’s close was negative with an A/D line of 11/23, 1 flat of 35 covered;
- Thursday’s close was positive with an A/D line of 30/5, 0 flat of 35 covered;
- Wednesday’s close was negative with an A/D line of 10/25, 0 flat of 35 covered;
- Tuesday’s close was positive with an A/D line of 26/9, 0 flat of 35 covered;
- Monday, the close was negative with an A/D line of 1/34, 0 flat of 35 covered;
Friday’s (top 5) incliners:
- bluebird bio (BLUE +$2.17 after Thursday’s +$4.46 and Wednesday’s -$1.58);
- Regenxbio (RGNX +$1.89 after Thursday’s +$4.31 and Wednesday’s -$5.34);
- Biostage (BSTG +$1.41) with news;
- Adverum Biotechnologies (ADVM +$1.14);
- Precigen (PGEN +$0.39);
Friday’s (lowest 10) decliners:
- BioLife solutions (BLFS -$2.72);
- Ionis Pharmaceuticals (IONS -$2.49 after Thursday’s +$2.61);
- Alnylam Pharmaceuticals (ALNY -$2.12 after Thursday’s +$2.23, Wednesday’s +$0.74 and Tuesday’s +$4.70);
- Fate Therapeutics (FATE -$2.08 after Thursday’s +$1.49, Wednesday’s +$0.77 and Tuesday’s +$4.92);
- Sage Therapeutics (SAGE -$1.59);
- AxoGen (AXGN -$1.19 after Thursday’s -$0.13);
- Editas Medicine (EDIT -$0.92 after Thursday’s +$1.71 and Wednesday’s +$1.51);
- Ultragenyx (RARE -$0.87 after Thursday’s +$3.30, Wednesday’s -$2.56, Tuesday’s +$3.70 and Monday’s -$9.54);
- Global Blood Therapeutics (GBT -$0.70 after Thursday’s -$0.40);
- uniQure NV (QURE -$0.69);
The percentage (%) indicators:
- Friday’s range of the 11-upside was +0.54% (VSTM) to 55.03% (BSTG) the 23-downside ranged from -0.21% (FIXX) to -22.97% (BLFS);
- Thursday’s range of the 30-upside was +0.68% (SAGE) to +57.06% (PGEN) the 5-downside ranged from -0.87% (GBT) to -14.93% (MESO);
- Wednesday’s range of the 10-upside was +0.68% (QURE) to +11.64% (PGEN) the 25-downside ranged from -2.22% (GBT) to -26.64% (ADRO);
- Tuesday’s 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);
- Monday’s the range of the 1-upside was +0.22% (BSTG) while the 34-downside ranged from -3.22% (ALNY) to -25.93% (BLCM);
Upside volume stats: key numbers
- Friday: 7 out of the 11-upside had higher than the 3-month average volume;
- Thursday: 17 out of the 30-upside had higher than the 3-month average volume;
- Wednesday: 9 out of the 10-upside had higher than the 3-month average volume;
- Tuesday: 18 out of the 26-upside had higher than the 3-month average volume;
- Monday: 0 out of the 1-upside had higher than the 3-month average volume;
Downside volume stats:
- Friday: 20 out of the 23-downside had higher than the 3-month average volume;
- Thursday: 4 out of the 5-downside had higher than the 3-month average volume;
- Wednesday: 15 out of the 25-downside had higher than the 3-month average volume;
- Tuesday: 7 out of the 9-downside had higher than the 3-month average volume;
- Monday: 29 out of the 34-downside had higher than the 3-month average volume;
1 flat – RENE.L
Friday closed negative with 23 decliners, 11 advancer and 1 flat
Thursday closed positive with 5 decliners, 30 advancer and 0 flat
Wednesday closed negative with 25 decliners, 10 advancer and 0 flat
Tuesday closed positive with 9 decliners, 26 advancer and 0 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
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.