November 15, 2023 4:45pm
Aim now, finger on the sell button; be ready to profit from your upside before the electronic trading algorithms, Question, is a “death cross” on the horizon? <see Bottom Line>
Pre-Open Indications: 4 Hits and 1 Miss
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The Dow closed UP +163.51 points or +0.47%, the S&P closed UP +7.18 points or +0.16% while the Nasdaq closed UP +9.45 points or +0.07%
After careful examination of the sector and breathe trends, I have come away more cautious. Having lived through the rise and multiple declines of “our” universe’s stock price, investors must be better informed on what fluctuating economics and markets can do to an equity, or what impact indications or expectations can have.
We need to more than consider the economic environment - rising rates and inflation to comprehend the micro re “our” universe of cell and gene therapy companies …
Indexes rose Wednesday, building on the strong rally from the previous session, on the back of more encouraging inflation data.
Economic Data Docket: October's retail sales report revealed the first monthly decline in sales since March, though the 0.1% drop still topped “Street's” estimates.
Pre-open indications: 4 Hits < BioLife Solutions (BLFS +$0.37), Vericel (VCEL -$0.70), Ionis Pharmaceuticals (IONS +$0.62), Blueprint Medicine (BPMC -$1.06)> 1 Miss < Alnylam Pharmaceuticals (ALNY +$1.06),
RegMed/Stem/Cell and Gene Therapy’s 35 covered equities’ Advance/Decline (A/D) lines: what happened – differences …
- Wednesday’s advance/decline line was positive with 29 incliners, 4 decliners and 2 flats at the open, the mid-day continued positive with 30 declined, 5 incliners and 0 flat, ending with a positive close of 23 incliners, 11 decliners and 1 flat
Ebb and flow:
Q4: November – 6 positive and 5 negative closes
· October – 12 negative and 10 positive closes
The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:
- Wednesday, the IBB was up +0.10% and the XBI was up +0.27%
The CBOE Volatility Index (VVIX: INDEX) tracked:
- Wednesday was down -0.06 point or -0.42% at 14.10
Closing Down (11 of 11):
- Blueprint Medicine (BPMC -$1.06 after Tuesday’s +$5.87),
- Vericel (VCEL -$0.70 after Tuesday’s +$2.80 after Monday’s +$0.04),
- Prime Medicine (PRME -$0.55),
- Homology Medicine (FIXX -$0.14 after Tuesday’s +$0.02)
- MiMedx (MDXG -$0.09),
- Sage Therapeutics (SAGE -$0.08 after Tuesday’s +$1.98 and Monday’s +$0.21)
- Generation Bio (GBIO -$0.08),
- Graphite bio (GRPH -$0.08)
- Compass Therapeutics (CMPX -$0.05),
- Voyager Therapeutics (VYGR -$0.04),
- Brainstorm Cell Therapeutics (BCLI -$0.0024),
- Harvard Apparatus GN (HRGN $0.00 after Tuesday’s -$0.17 after Monday’s $0.00)
Closing Up (10 of 23):
- Alnylam Pharmaceuticals (ALNY +$1.06 after Tuesday’s +$4.98 and Monday’s +$3.12
- CRISPR Therapeutics (CRSP +$0.93 after Tuesday’s +$3.29 and Monday’s -$1.15),
- Ultragenyx Pharmaceuticals (RARE +$0.78 after Tuesday’s +$2.99 and Monday’s +$0.42),
- Verve Therapeutics (VERV +$0.72 after Tuesday’s +$1.48 and Monday’s -$6,41),
- Beam Therapeutics (BEAM +$0.60 after Tuesday’s +$2.61 and Monday’s -$0.22),
- Ionis Pharmaceuticals (IONS +$ after Tuesday’s +$2.11 and Monday’s +$0.58)
- Solid Biosciences (SLDB+$0.59 after Tuesday’s -$0.03),
- Caribou Biosciences (CRBU +$0.45),
- BioLife Solutions (BLFS +$0.45),
- Editas Medicine (EDIT +$0.32),
Q4/23 – November
- Wednesday closed positive with 23 incliners, 11 decliners and 1 flat
The BOTTOM LINE: Something to think about …
“An ominous 'death cross' has spooked traders and sparked fears the stock market could be headed for a major drop despite positive movement in the market.”
The last time it appeared was March 2022, when the markets plunged a massive 12 percent over six months. It was noted on the Dow on Monday, the day before the markets saw their strongest performance since April - hitting their highest close since September 14 after being buoyed by the Labor Department's latest inflation figures. <Daily Mail>
- A 'death cross' is when the 50-day moving average of an index drops below the 200-day average - indicating momentum is weakening. A moving average is the average range of prices of an asset over a given period of time. <Investopedia>
- Meanwhile, small caps on the Russell 2000 were still feeling the love from Tuesday, as they added 0.3%. Coupled with Tuesday's gains, the index has cleared both its 50-day moving average and 100-day line. The index tried to crack 200-day line earlier in the session but pulled back.
- The jump in stocks was juiced by the surprise easing in US price pressures, which spurred bets the Federal Reserve will keep rates steady and could start cutting them early next year. <Yahoo finance>
- The 10-year Treasury note was slightly higher to 4.54%. West Texas Intermediate crude oil dropped nearly 2% to less than $77 a barrel.
- Volume was down Wednesday on the Nasdaq.
- Retail sales data showed a smaller-than-expected decline of 0.1% in October, against forecasts of a 0.3% fall,
- Short positioning and leveraged trading in hedge funds percentage (%) is the highest since November 2018 … Regulators are particularly concerned about one strategy called the basis trade, which involves using leverage to profit from the price gap between Treasury futures and the underlying cash market. It has garnered particular attention from federal watchdogs over concerns about a lack of visibility into the amount of risk in the market.
- Middle East conflict still weighed on the market as investors assessed the chances of it breaking out into a wider war. The rising geopolitical tensions in the Middle East could drive a global recession, leading investors have warned.
- The small-cap Russell 2000 index jumped 5.2% to hit an over six-week high.
I STILL believe the political aspect of the U.S.’s polarization, and disparities of the debt ceilings and rate hike arguments are contributing to the roller coaster ride for share pricing actions.
What’s behind the numbers:
- Market and sector expectations have become more questionable …
- The sector and overall stock market tends to consistently rise and fall over the short-term with alternating volatility and involuntary momentum contractions.
- I remain EXTREMELY cautious as upcoming earnings may have a more significant negative impact on share price due to missed consensus as estimates will lessen valuations.
Welcome to my world of defining the “grey’ in our universe!
- I believe … there will be deceleration in sector pricing gains and economic activity for the remaining weeks of 2023.
The top three (3) performing in the session:
- Wednesday: Alnylam Pharmaceuticals (ALNY), CRISPR Therapeutics (CRSP) and Ultragenyx Pharmaceuticals (RARE)
- Tuesday: Blueprint Medicine (BPMC), Alnylam Pharmaceuticals (ALNY) and CRISPR Therapeutics (CRSP)
- Monday: Alnylam Pharmaceuticals (ALNY), Ultragenyx Pharmaceuticals (RARE) and Ionis Pharmaceuticals (IONS)
The worst three (3) in the session:
- Wednesday: Blueprint Medicine (BPMC), Prime Medicine (PRME) and Vericel (VCEL)
- Tuesday: Harvard Apparatus GN (HRGN), Mesoblast (MESO) and Adverum Biotechnologies (ADVM),
- Monday: Verve Therapeutics (VERV), CRISPR Therapeutics (CRSP) and Intellia Therapeutics (BEAM)
Right up front, “I also hate to be so negative or contrarian but, this is a NO spin zone and truth is its product; I can always be WRONG but … I am mostly EARLY!”
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. Regulation Analyst Certification (Reg AC): The research analyst primarily responsible for the content of this report certifies the following under Reg AC: I hereby certify that all views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities.
I also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.