April 1, 2020 5:10pm

Volatility has no bounds supplemented by once-in-a-lifetime uncertainty

Pre-open indications: 2 HITs < MESO (+$0.17), RARE (+$2.48)> and 6 MISS <ATHX (+$0.98), BLUE (-$2.56), ADVM (-$1.03), RGNX (-$3.24), IONS (-$0.43), SAGE (-$1.97)

My motto, “Never leave an investor uninformed”!  


The Dow closed DOWN -973.65 points (-4.44%), the S&P closed DOWN -114.09 points (-4.41%) while the NASDAQ closed DOWN – 339.52 points (-4.42%)

 

Henry’omics:

Indexes descended on Wednesday as Q2 recoiled with an acid taste due to the increasing infection rates of the coronavirus and ensuing death spirals.

 

Wednesday cell and gene therapy equities slipped into negative territory as the Advance/Decline (A/D) line opened at 6/28 and 1 flat, it continued negative at the mid-day at 5/29 and 1 flat to close negative at 4/31 of the 35 covered companies.

  • Tuesday Cell and gene therapy equities flipped neutral, after four (4) ups in the last five (5) sessions;
  • Monday’s sector’s Advance/Decline (A/D) line opened at 8/24 and 3 flats, closed positive at 20/15 of the 35 covered companies.

 

Sentiment and its indicators: The unprecedented societal disruption has caused financial distress and volatility as never seen before …

  • Data from ADP and Moody’s Analytics showed U.S. companies cut 27,000 jobs through March 12. Actual losses for the month were far worse, as shown by the record number of jobless claims in the week or March 20. Meanwhile, ISM manufacturing index fell to 49.1 in March from 50.1 in February, signaling a contraction in U.S. manufacturing activity amid the pandemic.

 

Volatility in the market is usually inversely correlated in the short-term. The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Wednesday was up +3.53 points or +6.59% at 57.07,
  • Tuesday was down -3.54 points or -6.20% at 53.54,
  • Monday was down -8.46 points or -12.91% at 57.08,
  • Last week, the VIX eclipsed its financial crisis high, closing at 82.69.

 

Defining pandemic disruption: The number of confirmed U.S. coronavirus cases:

  • Jumped on Wednesday to 200,000,
  • Tuesday to 177,452,
  • Monday’s 153,200,
  • Friday’s 97,028,
  • Thursday’s 69,000 and
  • Last Wednesday’s 55,568

Wednesday’s death rate escalated to 4,400 after Tuesday’s 3,440, Monday’s 2,828, Friday’s 1475, Thursday’s 1,000 and last Wednesday’s 809. <John Hopkins University>

 

Volume was LOW as 3 out of the 4-upside had higher than the 3-month average volume with even LOWER volume as only 6 out of the 31-downside had higher than the 3-month average volume.

  • Tuesday’s volume was low as 3 out of the 17-upside had higher than the 3-month average volume with even lower volume as only 2 out of the 17-downside had higher than the 3-month average volume.
  • Monday’s volume was minimal as 5 out of the 20-upside had higher volume 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.

 

Wednesday’s percentage (%) statistics of the 4-upside ranged +3.88% to +32.67% while the 31-downside ranged from -0.91% to -19.12% and highlighted disparity of volume: 

  • Tuesday’s percentage (%) statistics of the 17-upside while the 17-downside were lower: 
  • Monday’s percentage (%) statistics of the 20-upside were +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. 

 

Stand-outs:

Today’s upsiders stand-out –Athersys (ATHX) – 6th session, Biostage (BSTG) on 297 shares traded, Mesoblast (MESO) on BLA news and Ultragenyx Pharmaceuticals (RARE) on partnering news;

While some downsides hit a 3nd slide sessions – Regenxbio (RGNX), Adverum (ADVM), bluebird bio (BLUE), Ionis Pharmaceuticals (IONS) and Sage Therapeutics (SAGE) followed by 1 or 2 timers.

 

The BOTTOM LINE: are we stuck in a SUCKER bets period, as Q2 begins with tremendous uncertainty amid mounting concerns over the coronavirus outbreak.

  • In situations like this, the best thing for investors is to measure what they see in the short and near-term or best yet read what I write;
  • And stand-down hugging-their-current portfolio;
  • I would also be bracing for another ROUGH period for the sector and market; waiting for the next aftershock of continued disruption in April.
  • The unprecedented societal disruption has yet to signal ANY equity opportunities and potential paths;
  • I’m sticking to my usual theme – “Skim if you can trim, buy if it will fly and sell if compelled!”

 

Check out the supporting data groupings and their numbers …

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

  • Wednesday, the IBB closed down -3.67% and XBI also closed down -5.40%
  • Tuesday, the IBB closed down -1.01% and XBI also closed down -0.76%
  • Monday, the IBB closed up +3.57% and XBI also closed up +2.05%

 

The advance/decline line scenario of 35 covered companies:

  • Wednesday, the close was negative with an A/D line of 4/31, 0 flat of 35 covered;
  • Tuesday, the close was neutral with an A/D line of 17/17, 1 flat of 35 covered;
  • Monday, the close was positive with an A/D line of 20/15, 0 flat of 35 covered;

 

Wednesday’s (only 4) incliners: review closely – there are patterns here after positive closes or negative closes – this week’s possible …!

  • Ultragenyx Pharmaceuticals (RARE +$2.48);
  • Athersys (ATHX +$1.22 after Tuesday’s +$0.98);
  • Biostage (BSTG +$0.20);
  • Mesoblast (MESO +$0.17);

Wednesday’s (bottom 10) decliners: after positive closes or negative closes – this week’s possible …

  • Alnylam Pharmaceuticals (ALNY -$4.31);
  • ReNeuron (RENE.L -$4.00 after Tuesday’s +$4.00 and Monday’s -$10.00);
  • CRISPR Therapeutics (CRSP -$3.91 after Tuesday’s -$1.88, Monday’s +$2.47, Friday’s -$2.17, Thursday’s +$2.21 and last Wednesday’s -$0.88);
  • bluebird bio (BLUE -$3.45 after Tuesday’s -$1.00, Monday’s -$0.81, Friday’s +$1.20, Thursday’s -$0.75 and last Wednesday’s -$1.50);
  • Regenxbio (RGNX -$3.24 after Tuesday’s -$1.37, Monday’s -$0.13 and Friday’s +$1.34);
  • Global Blood Therapeutics (GBT -$2.36);
  • Fate Therapeutics (FATE -$2.00 after Tuesday’s -$0.95, Monday’s +$0.98, Friday’s -$1.13, Thursday’s -$0.09 and last Wednesday’s -$0.50);
  • Sage Therapeutics (SAGE -$1.97 after Monday’s -$2.00, Friday’s +$0.55, Thursday’s +$0.62, Wednesday’s +$0.97 and last Tuesday’s +$3.21);
  • uniQure NV (QURE -$1.82);
  • AxoGen (AXGN -$1.72 after Tuesday’s +$0.15 after Monday’s +$0.92);

 

The percentage (%) indicators:

  • Wednesday’s range of the 4-upside was +3.88% (MESO) to +32.67% (ATHX) while the 31-downside ranged from -0.91% (IONS) to -19.12% (PGEN); 
  • Tuesday’s range of the 17-upside was +0.02% (ALNY) to +15.83% (ATHX) while the 17-downside ranged from -0.76% (VCEL) to -11.35% (PSTI); 
  • Monday’s 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); 

 

Upside volume stats:  key numbers

  • Wednesday: 3 out of the 4-upside had higher than the 3-month average volume;
  • Tuesday: 3 out of the 17-upside had higher than the 3-month average volume;
  • Monday: 5 out of the 20-upside had higher than the 3-month average volume;

Downside volume stats:

  • Wednesday: 6 out of the 31-downside had higher than the 3-month average volume;
  • Tuesday: 2 out of the 17-downside had higher than the 3-month average volume;
  • Monday: 4 out of the 15-downside had higher than the 3-month average volume;

0 flat –

 

April

Wednesday closed negative with 31 decliners, 4 advancer and 0 flat

 

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.