March 30, 2020 5:25pm
Volatility has been offset by selling fatigue as reaction to bad news has deescalated than recent weeks setting an attitude for quarterly re-balancing portfolios as major averages are still below their moving-day averages
Pre-open indications and research note: 2 hits (PSTI on news and SELL into strength - ATHX)
Market talk, ideas and opinions; Insight from a volatile climate; RMi outlines the preludes of a new week defining the mitigating factors of share pricing!
The Dow closed up +690.70 points (+3.19%), the S&P closed up +85.18 points (+3.35%) while the NASDAQ closed up +271.77 points (+3.62%)
Cell and gene therapy equities rose on Monday, building on three (3) up sessions last week as optimistic sentiment re-positioned higher after Johnson & Johnson (JNJ +$9.85 or +8% to $133.01) said it identified a lead vaccine candidate for the coronavirus with human vaccine testing possibly beginning in September.
The Dow is now up 20% from its coronavirus sell-off low reached on Monday while the S&P 500 has risen more than 17% from those levels. The Nasdaq has bounced more than 13%.
Sentiment and its indicators:
... this week, investors will get “reads” on manufacturing and consumer confidence; last Friday’s release of consumer confidence data showed a sharp drop!
- RegMed Investors’ (RMi): the coming week ... https://www.regmedinvestors.com/articles/11288
Investors got a glimpse of the virus’ economic impact last week.
- On Thursday, the Labor Department reported a record 3.28 million workers filed for unemployment benefits the week of March 20. That number easily topped the previous record of 695,000 set in 1982;
- On Monday, the Dallas Fed said its manufacturing activity index came in at -70 for March, far worse than a -10 estimate. <CNBC>
insider buying reached an 11-year high. Data from “Morning Consult” showed U.S. consumer sentiment has started to stabilize … https://morningconsult.com/form/consumer-confidence-tracking-us
National social distancing guidelines (amended Sunday by the White House) have been extended to April 30, are seen by some investors as averting long-term damage to the economy.
Volatility in the market is usually inversely correlated in the short-term, “so that big declines drive the VIX higher while grinding rallies send it plunging. The CBOE Volatility Index (VIX) tracked:
- Monday was down -8.46 points or -12.91% at 57.08,
- Friday was up +4.54 points or +7.44% to 65.54,
- Last week, the VIX eclipsed its financial crisis high, closing at 82.69.
Defining pandemic disruption: The number of confirmed U.S. coronavirus cases has surged on Monday to 153,200 from Friday’s 97,028, Thursday’s 69,000, Wednesday’s 55,568 and Tuesday’s 46,500 while Monday’s death rate escalated to 2,828 after Friday’s death count had broken higher at 1475, Thursday’s 1,000, Wednesday’s 809 following last Tuesday’s 590. <John Hopkins University>
The sector’s Advance/Decline (A/D) line opened at 24/11, sauntered positive to the mid-day at 20/15 and closed positive at 20/15 of the 35 covered companies.
Volume was minimal as 5 out of the 20-upside had higher than the 3-month average volume with nominal volume as only 4 out of the 15-downside had higher than the 3-month average volume.
Percentage (%) statistics of the 20-upside was +1.45% (EDIT) to +37.54% (PSTI) while the 15-downside ranged from -0.38% (RGNX) to -9.52% (RENE.L) were a lot higher than usual presenting the possibility – I say again – the possibility of a new bottom.
Today’s upsiders stand-out – Pluristem (PSTI) and Athersys (ATHX) on treatment and warrant execution with heavy volume in these two (2), Homology Medicine (FIXX), AxoGen (AXGN), Stemline Therapeutics (STML), Mesoblast (MESO), Intellia therapeutics (NTLA) and CRISPR Therapeutics (CRSP0 and others …
The BOTTOM LINE: It’s hard to trust the sector to sustain gains when all it’s done recently is take them away. A re-test of lows is possible, I remain split over whether stocks have farther to fall, depending on the most important variable going forward - the coronavirus pandemic.
Check out the supporting data groupings and their numbers …
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Monday, the IBB closed up +3.57% and XBI also closed up +2.05%
- Friday, the IBB closed -1.95% and XBI also closed down -2.90%
The advance/decline line scenario of 35 covered companies:
- Monday, the close was positive with an A/D line of 20/15, 0 flat of 35 covered;
- Friday, the close was negative with an A/D line of 8/25, 2 flats of 35 covered;
Monday’s (top 10) incliners:
- Alnylam Pharmaceuticals (ALNY +$4.63 after Friday’s -$3.01, Thursday’s +$8.43 and last Wednesday’s -$1.16);
- CRISPR Therapeutics (CRSP +$2.47 after Friday’s -$2.17, Thursday’s +$2.21, Wednesday’s -$0.88, Tuesday’s +$3.21 and last Monday’s +$0.58);
- Homology Medicine (FIXX +$2.13 after Friday’s -$2.98 and Thursday’s +$1.08);
- Ultragenyx (RARE +$1.96 after Friday’s -$2.14, Thursday’s +$2.04, Wednesday’s +$0.97, Tuesday’s +$3.36 and last Monday’s +$0.76,
- Pluristem (PSTI +$1.13);
- Fate Therapeutics (FATE +$0.98 after Friday’s -$1.13, Thursday’s -$0.09, Wednesday’s -$0.50 and last Tuesday’s +$1.62);
- Global Blood Therapeutics (GBT +$0.92 after Friday’s -$0.88);
- AxoGen (AXGN +$0.92);
- uniQure NV (QURE +$0.78 after Friday’s -$0.69);
- Intellia Therapeutics (NTLA +$0.76 after Friday’s -$1.39 and Thursday’s +$0.54);
Monday’s (bottom 10) decliners:
- ReNeuron (RENE.L -$10.00);
- Sage Therapeutics (SAGE -$2.00 after Friday’s +$0.55, Thursday’s +$0.62, Wednesday’s +$0.97 and last Tuesday’s +$3.21);
- Ionis Pharmaceuticals (IONS -$1.20);
- bluebird bio (BLUE -$0.81 after Friday’s +$1.20, Thursday’s -$0.75 and last Wednesday’s -$1.50);
- Adverum Biotech (ADVM -$0.44);
- Bellicum Pharmaceuticals (BLCM -$0.43 after Friday’s +$0.27 and Thursday’s -$0.05);
- Brainstorm Cell therapy (BCLI -$0.39);
- Voyager Therapeutics (VYGR -$0.30 after Friday’s +$0.11);
- Vericel (VCEL -$0.15);
- Regenxbio (RGNX -$0.13 after Friday’s +$1.34);
The percentage (%) indicators:
- Monday’s the range of the 20-upside was +1.45% (EDIT) to +37.54% (PSTI) while the 15-downside ranged from -0.38% (RGNX) to -9.52% (RENE.L);
- Friday’s range of the 8-upside was +1.23% (VYGR) to +14.29% (BSTG +$0.50) while the 25-downside ranged from -0.24% (MESO) to -17.54% (FIXX);
Upside volume stats: key numbers
- Monday: 5 out of the 20-upside had higher than the 3-month average volume;
- Friday: 5 out of the 8-upside had higher than the 3-month average volume;
Downside volume stats:
- Monday: 4 out of the 15-downside had higher than the 3-month average volume;
- Friday: 4 out of the 25-downside had higher than the 3-month average volume;
0 flat –
Monday closed positive with 15 decliners, 20 advancer and 0 flat
Friday closed negative with 25 decliners, 8 advancer and 2 flats
Thursday closed positive with 7 decliners, 27 advancer and 1 flat
Wednesday closed positive with 12 decliners, 21 advancer and 2 flats
Tuesday closed positive with 3 decliners, 32 advancer and 0 flat
Monday closed negative with 20 decliners, 15 advancer and 0 flat
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.