April 21, 2020 5:47pm
Oil pricing, algorithm induced volatility and COVID-19 attacked indexes and stocks but, oil lit the machines’ fuse to jump the wire in today’s raid on share pricing
Pre-open indications: 11 Hits < Alnylam (ALNY -$7.02), CRISPER Therapeutics (CRSP -$2.56), Verastem (VSTM -$0.07), bluebird bio (BLUE -$3.73), Sage Therapeutics (SAGE -$0.63), Ionis Pharmaceuticals (IONS -$2.16), Regenxbio (RGNX -$0.41), uniQure NV (QURE -$0.50), Athersys (ATHX -$0.08), Editas Medicine (EDIT -$1.18), BioLife Solutions (BLFS +$0.08) and 2 MISS <Sangamo Therapeutics (SGMO -$0.12), Vericel (VCEL -$0.25)>
It’s not hard to be right so often, it’s about refining expectation, defining insight and trusting your “gut” versus electronic trading and algorithms
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The Dow closed DOWN -631.56 points (-2.67%), the S&P closed DOWN -86.60 points (-3.07%) while the NASDAQ closed DOWN -297.50 points (-3.48%)
A second day of losses … luckily, I said basically IGNORE yesterday’s SECTOR upside, it was a FAKE-OUT and today’s results prove it
U.S. stocks fell sharply once again on Tuesday as oil pricing continued its unprecedented wipeout;
Traders were focused on the strange happenings with oil futures once again, which raised concern about deep losses for the energy industry hitting the U.S. economy even further. On Monday, the May contract for oil futures expiring Tuesday fell to zero and then went to an actual negative price, meaning producers would pay for someone to take the oil off their hands. The bizarre move has to do with the fact that because of the coronavirus shutdowns, big buyers of oil like refineries don’t need any more oil because their tanks are nearly filled. <CNBC>
I loath some news as MiMedx (MDXG) received notice from Bank of America that its application for a Paycheck Protection Program loan (a “PPP Loan”) under the CARES Act has been approved. MDXG expects to receive the funds from the PPP Loan by the end of the month … versus the many and multiple indictments of business practices and fraud and guilty pleas by its management team … as long as they’re paying interest on loans with NO free rides other than the bus to prison!
- Note, “The company intends to use the proceeds from the PPP Loan in a manner that would allow for forgiveness of the entire amount of the loan, although there is no assurance that the proceeds of the PPP Loan will be forgiven.”
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Tuesday, the IBB closed down -3.03% and XBI also closed down -3.04%
- Monday, the IBB closed up +1.29% and XBI also closed up +3.72%
- Friday, the IBB closed up +4.67% and XBI also closed up +5.51%;
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Tuesday was up +1.58 points or +3.60% at 45.41,
- Monday was up +5.21 points or +13.79% at 43.41,
- Friday was down -1.96 points or -4.89% at 38.15,
RegMed/Cell and gene therapy 35 covered equities’ Advance/Decline (A/D) lines:
- Tuesday opened negative at 4/30 and 1 flat, stayed negative at the mid-day at 3/32 and closed negative at 3/32;
- Monday opened negative at 15/18 and 2 flats, was positive at the mid-day at 29/6 and closed positive at 30/10;
- Last Friday opened positive at 32/3, stayed positive at the mid-day at 31/4 closing positive at 29/6;
Tuesday’s (only 3) incliners:
- Pluristem (PSTI +$0.50 after Monday’s +$0.25);
- Voyager Therapeutics (VYGR +$0.08);
- BioLife Solutions (BLFS +$0.08 after Monday’s -$0.44);
Tuesday’s (bottom 10) decliners: review the rotations ..
- Alnylam Pharmaceuticals (ALNY -$7.02 after Monday’s +$6.39, Friday’s $10.76, Thursday’s +$6.22, Wednesday’s +$1.06 and last Tuesday’s +$1.71);
- ReNeuron (RENE.L -$7.00 after Monday’s -$10.50, Friday’s +$6.50, Thursday’s -$2.50, Wednesday’s -$15.00 and last Tuesday’s -$13.00;
- bluebird bio (BLUE -$3.73);
- CRISPR Therapeutics (CRSP -$2.56 after Monday’s +$2.04 after Friday’s +$1.91, Thursday’s +$1.12 and Wednesday’s +$1.38);
- Ionis Pharmaceuticals (IONS -$2.16);
- Adverum Biotech (ADVM -$1.63 after Monday’s +$1.15);
- Fate Therapeutics (FATE -$1.30 after Monday’s -$0.94 after Friday’s +$2.50);
- Editas Medicine (EDIT -$1.18 after Monday’s +$0.82 after Friday’s +$0.75, Thursday’s +$0.72 and last Wednesday’s -$0.78);
- Intellia Therapeutics (NTLA -$1.07);
- Ultragenyx Pharmaceuticals (RARE -$0.98 after Monday’s +$4.53, Friday’s +$1.91, Thursday’s +$0.55, Wednesday’s -$1.28 and last Tuesday’s +$4.36);
Today’s stand-outs: a few to mention, not all …
- Green upside equities were wiped-out;
- Back on the upside board in two (2) sessions after 3-hammering sessions post 7- up sessions– Pluristem (PSTI) – expect a financing (?);
- 6-session decliner - Mesoblast (MESO);
- 2-session repeater – Fate Therapeutics (FATE);
- The rotation added 32 equities to the downside;
- Hop-scotching – Biostage (BSTG) closed down after Monday’s up with low volume after Friday closed down after twice (2x) being flat following closing positive 3 times versus 7 negative closes in the last fifteen (15) sessions since April 1st;
- Falling again to (Monday’s) downside after Friday’s positive close following 4 down sessions and 6-sessions of upside – ReNeuron (RENE.L);
Volumes versus 3-month averages: low volume is moving the needle
- Tuesday’s volume was THIN as 1 of the 3-upside had higher than the 3-month average volume and 11 of the 32-downside had higher than the 3-month average volume;
- Monday’s volume was GAINING MOMENTUM as 16 of the 30-upside had higher than the 3-month average volume and only 3 of the 10-downside had higher than the 3-month average volume.
- Friday’s volume was THIN as 9 out of the 29-upside had higher than the 3-month average volume and HIGH as only 5 out of the 6-downside had higher than the 3-month average volume;
Percentage (%) movement/range statistics: look closely …
- Tuesday’s % of the 3-upside were +0.76% (BLFS) to +5.75% (PSTI) while the 32-downside ranged from -0.38% (GBT) to -14.29% (BSTG);
- Monday’s % of the 30-upside were +0.32% to +22.01% (VSTM) while the 10-downside ranged from -1.23% (AGTC) to -7.05% (RENE.L);
- Friday’s % of the 29-upside were +0.61% (BLCM) to +15.15% (VCEL) while the 6-downside ranged from -1.86% (MESO) to -12.63% (BSTG).
Sentiment and its indicators:
Not helping sentiment were shares of IBM, which slipped 5% after It reported a 3.4% decline in revenue in the first quarter from a year ago amid the spread of coronavirus.
- While volatility controls the tone and character of the news.
Defining pandemic disruption: The number of confirmed U.S. coronavirus cases:
- Tuesday’s 788,900,
- Monday’s 766,600,
- Friday’s 683,700
Tuesday’s death rate escalated to 42,485 after Monday’s 40,931 and Friday’s 34,575 compared to the previous Monday’s 22,861 <John Hopkins University>
Upside volume stats:
- Tuesday: 1 out of the 3-upside had higher than the 3-month average volume;
- Monday: 16 out of the 30-upside had higher than the 3-month average volume;
- Friday: 9 out of the 29-upside had higher than the 3-month average volume;
Downside volume stats:
- Tuesday: 11 out of the 32-downside had higher than the 3-month average volume;
- Monday: 3 out of the 10-downside had higher than the 3-month average volume;
- Friday: 5 out of the 6-downside had higher than the 3-month average volume;
Tuesday closed negative with 32 decliners, 3 advancer and 0 flat
Monday closed positive with 10 decliners, 30 advancer and 0 flat
Friday closed positive with 6 decliners, 29 advancer and 0 flat
Thursday closed negative with 20 decliners, 14 advancer and 1 flat
Wednesday closed negative with 29 decliners, 6 advancer and 0 flats
Tuesday closed positive with 4 decliners, 31 advancer and 0 flats
Monday closed negative with 19 decliners, 16 advancer and 0 flats
Friday was a market holiday
Thursday closed positive with 7 decliners, 28 advancer and 0 flat
Wednesday closed positive with 4 decliners, 30 advancer and 1 flat
Tuesday closed negative with 18 decliners, 17 advancer and 0 flats
Monday closed positive with 2 decliners, 33 advancer and 0 flats
Friday closed negative with 23 decliners, 12 advancer and 0 flats
Thursday closed positive with 10 decliners, 23 advancer and 2 flats
Wednesday (4/1) closed negative with 31 decliners, 4 advancer and 0 flat
The BOTTOM LINE: I kept saying … we ARE going to … and DID TEST another low and it will be the time yet again for you to close your eyes and say … I should have listened to RMi having followed Henry’omics” as today’s session dissolved before our eyes.
I CAUTION investors to remain PATIENT before BUYING back in to the SECTOR – new lows will appear as Q1 results start being conferenced.
There are NO sighs or deep breathing relief – yet. When this economy is re-opened – we will see MAJOR changes to work and its environments. Although, I will admit a financing was fulfilled for 1 sector company -Athersys (ATHX).
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.