September 18, 2020 5:35pm

Friday’s quadruple witching got a lot of fanfare yet, didn’t quite live up to its moniker as a volume disrupter; volume was orderly and a little heavy as the sector retuned to Wednesday’s pricing levels

The week’s “numbers” in review

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The Dow closed DOWN -244.56 points (-0.88%), the S&P closed down -37.54 points (-1.12%) while the Nasdaq closed DOWN -117 points (-1.07%)

 

Henry’omics:

Friday ended a volatile week as investors jumped on the oversold RegMed, cell and gene therapy sector buying the undervalued with increased volume (covering shorts).

I believe that a quadruple witching Friday that usually results in higher than normal volumes was initiated more on Friday as Thursday’s session closed down after Wednesday’s peak of this week’s expiration.

It seemed different from June’s last quad witching occurred, when the market experienced a bit of a shock in sentiment that has forced investors in options to unwind a number of short-term bets.

The major averages fell for a third straight week, notching their longest weekly losing streaks since last year.

  • The Dow posted a slight week-to-date loss. The S&P 500 lost 0.7% and the Nasdaq dropped 0.6% over that time period.

 

This morning, I stated in this a.m.’s newsletter – RegMed Investors’ (RMi) pre-open: a sideline day to sit-out and watch for some sector turbulence … https://www.regmedinvestors.com/articles/11551 and the possible effects on Biostage’s (BSTG) share pricing by the U.S. Commerce Department’s coming BAN on WeChat.

 

RegMed/Cell and Gene therapy 35 covered equities’ Advance/Decline (A/D) lines: progressions and regressions …

  • Friday opened positive at 22/11 and 2 flats, stayed positive at the mid-day at 18/16 and 1 flat, closing positive at 29/5 and 1 flat;
  • Thursday opened negative at 8/25 and 2 flats, stayed negative at the mid-day at 13/20 and 2 flats, closing negative at 13/20 and 2 flats;
  • Wednesday opened positive at 25/9 and 1 flat, stayed positive at the mid-day at 24/10 and 1 flat, closing positive at 23/10 and 2 flats;
  • Tuesday opened positive at 22/11 and 2 flats, stayed positive at the mid-day at 27/7 and 1 flat, closing positive at 22/12 and 1 flat;
  • Monday opened positive at 32/2 and 1 flat, stayed positive at the mid-day at 30/4 and 1 flat, closing positive at 31/3 and 1 flat;

 

Key metrics:

  • Sector volume INCREASED with 19 of the 29-upside having higher than the 3-month average volume and the 3 of 5-downside having higher than the 3-month average volume;
  • Friday’s percentage (%) of the 29-upside were +0.02% (QURE) to +12.17% (BLCM) while the 5-downside ranges from -0.94% (MESO) to -5.06% (SLDB); 

 

Hammered in today’s market:

  • Adverum Biotechnologies (ADVM), Precigen (PGEN), Mesoblast (MESO), Solid Biosciences (SLDB), Caladrius Biosciences (CLBS) to name 5 of the 5 declining of the 35 covered

Jumping with share pricing momentum:

  • ReNeuron (RENE.L), Sage Therapeutics (SAGE), Fate Therapeutics (FATE), BioLife Solutions (BLFS), Editas Medicine (EDIT) to name 5 of the 29 inclining of the 35 covered

 

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

  • Friday, the IBB closed up +0.51% and XBI closed up +1.10%
  • Thursday, the IBB closed down -0.39% and XBI closed down -0.16%
  • Wednesday, the IBB closed up +0.09% and XBI closed up +2.19%
  • Tuesday, the IBB closed up +1.01% and XBI closed up +0.94%
  • Monday, the IBB closed up +5.42% and XBI closed up +6.89%

 

Friday’s (10 of 29) incliners:

  • ReNeuron (RENE.L +$2.50 after Thursday’s -$2.50, Wednesday’s -$2.00, Tuesday’s -$5.00 and Monday’s -$3.50);
  • Sage Therapeutics (SAGE +$2.35 after Thursday’s +$0.96);
  • Fate Therapeutics (FATE +$2.34);
  • BioLife Solutions (BLFS +$1.78 after Thursday’s -$0.37, Wednesday’s -$1.88, Tuesday’s +$1.76 and Monday’s +$2.15);
  • Editas Medicine (EDIT +$1.20 after Thursday’s -$0.52, Wednesday’s +$1.32 and Tuesday’s +$0.57);
  • Intellia Therapeutics (NTLA +$1.06 after Thursday’s-$0.52 after Wednesday’s +$0.70, Tuesday’s +$1.35 and Monday’s +$1.66);
  • Homology Medicine (FIXX +$1.02);
  • Voyager Therapeutics (VYGR +$0.89);
  • Bellicum Pharmaceuticals (BLCM +$0.84 after Thursday’s +$0.25, Wednesday’s -$0.38 and Tuesday’s +$0.73);

Friday’s (5 of 5) decliners:

  • Adverum Biotechnologies (ADVM -$0.45);
  • Precigen (PGEN -$0.19 after Thursday’s -$0.29 and Wednesday’s -$0.11);
  • Mesoblast (MESO -$0.17 after Thursday’s +$0.04);
  • Solid Biosciences (SLDB -$0.13 after Thursday’s +$0.06);
  • Caladrius Biosciences (CLBS -$0.10);

Closing flat: 1 - Stemline Therapeutics (STML – acquired)

 

Percentage (%) movement/range statistics: 360 degrees comparisons

  • Friday’s percentage (%) of the 29-upside were +0.02% (QURE) to +12.17% (BLCM) while the 5-downside ranges from -0.94% (MESO) to -5.06% (SLDB); 
  • Thursday’s percentage (%) of the 13-upside were +0.02% (RARE) to +6.38% (BSTG) while the 20-downside ranges from -0.04% (FATE) to -5.60% (PGEN); 
  • Wednesday’s percentage (%) of the 23-upside were +0.16% (ADVM) to +19.81% (AXGN) while the 10-downside ranges from -0.14% (FIXX) to -9.03% (BSTG); 
  • Tuesday’s percentage (%) of the 22-upside were +0.07% (BCLI) to +13.93% (AGTC) while the 12-downside ranges from -0.37% (ALNY) to -8.09% (PSTI); 
  • Monday’s percentage (%) of the 31-upside were +1.69% (BLUE) to +14.75% (VSTM) while the 3-downside ranges from -1.67% (AXGN) to -3.65% (RENE.L); 

 

Sentiment and a few daily indicators:

Friday’s (sector) sentiment moves were seemingly neutral or maybe insignificant than normal actions as a series of individual stock, ETF and index options were set to expire; which did not seem to lead to volatile trading of unwound positions ahead of the expirations.

Tensions between China and the U.S. also dampened market sentiment after the U.S. government said it will block all TikTok and WeChat downloads in the country on Sunday.

Infections rates:

  • Friday’s 6.67 cases
  • Thursday’s 6.63 M
  • Wednesday’s 6.6 M
  • Tuesday 6.55 M cases
  • Monday 6.52 M cases

Friday’s day’s death rate totaled 197,655 after Thursday’s 196,831, Wednesday’s 196,023, Tuesday’s 194,547 and Monday’s 194,000 <Johns Hopkins University>

 

Stats:

Upside volume: 

  • Friday: 19 out of the 29-upside had higher than the 3-month average volume;
  • Thursday: 2 out of the 13-upside had higher than the 3-month average volume;
  • Wednesday: 6 out of the 23-upside had higher than the 3-month average volume;
  • Tuesday: 6 out of the 22-upside had higher than the 3-month average volume;
  • Monday: 12 out of the 31-upside had higher than the 3-month average volume;

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Friday was down -0.63 points or -2.38% at 25.83
  • Thursday was up +0.42 points or +1.61% at 26.46
  • Wednesday was up +0.45 points or +1.76% at 26.04
  • Tuesday was down -0.26 points or -1.01% at 25.59
  • Monday was down -1.02 points or -3.80% at 25.85

Downside volume:

  • Friday: 3 out of the 5-downside had higher than the 3-month average volume;
  • Thursday: 2 out of the 20-downside had higher than the 3-month average volume;
  • Wednesday: 7 out of the 10-downside had higher than the 3-month average volume;
  • Tuesday: 1 out of the 12-downside had higher than the 3-month average volume;
  • Monday: 2 out of the 3-downside had higher than the 3-month average volume;

 

September, the third month of Q3 …

Friday closed positive with 29 advancers, 5 decliners and 1 flat

Thursday closed negative with 13 advancers, 20 decliners and 2 flats

Wednesday closed positive with 23 advancers, 10 decliners and 2 flats

Tuesday closed positive with 22 advancers, 12 decliners and 1 flat

Monday (9/14) closed positive with 31 advancers, 3 decliners and 1 flat

Friday closed negative with 16 advancers, 17 decliners and 2 flats

Thursday closed negative with 12 advancers, 20 decliners and 3 flats

Wednesday closed positive with 27 advancers, 5 decliners and 3 flats

Tuesday (9/10) closed negative with 14 advancers, 19 decliners and 2 flats

Monday was a holiday 

Friday closed negative with 5 advancers, 28 decliners and 2 flats

Thursday closed negative with 2 advancers, 32 decliners and 1 flat

Wednesday closed negative with 18 advancers, 25 decliners and 2 flats

Tuesday (9/1) closed negative with 4 advancers, 29 decliners and 2 flats

 

The Bottom Line: It was a session to wait and watch the movement and luckily “our” universe came up on a solid basis.

One never knows on a quadruple witching hour, even as Thursday tanked from Wednesday’s high – shorts got eaten and Friday returned to many of Wednesday’s highs.

 

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.