September 25, 2015 6:35pm

 

Overweighed positions, inflated valuations and the declining attention to fundamentals caused the collapse

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Stocks mention in the closing bell report: : Fibrocell (FCSC), bluebird bio (BLUE), Intrexon (XON),  Spark Therapeutics (ONCE), Applied Genetic Technologies (AGTC), Juno therapeutics (JUNO), Kite Pharma (KITE), ReNeuron (RENE.L), Aduro (Biotech (ADRO), Neuralstem (CUR), Bellicum (BLCM), uniQure (QURE), Histogenics (HSGX) and Cesca Therapeutics (KOOL)

 

I bring fresh perspectives that yield a whole that is greater than the sum of the parts as I convey a spectrum of factors that explain outcomes, analytical principles and analysis without the encumbrance of I-Banking.

 

 

U.S. stocks closed mixed Friday, pressured by a plunge in biotechs, as investors digested Nike earnings and Fed Chair Yellen's remarks.

The NASDAQ closed DOWN -47.98 or -1.01% to 4,686.50 with the DOW was UP +113.35 or +0.70% to 16,314.67.

 

 

Referencing the title, as usual, I ask and answer… the questions of why and what does it mean and finally … what else is to fall – in the shortest sentence and use of words?

  • Peeling the onion is a discovery process. It involves gently peeling layers of data, layers of interpretation, layers of emotion, and layers of meaning. 

 

 

A day in the life of the stem, cell and gene therapy RegMed (SCGT & RM) sector:

  • The stem, cell, gene therapy and regenerative medicine (SCGT & RM) equities opened with a positive A/DL of 25/14 and 4 flats followed by a very negative first half hour which dropped the A/DL to 13/28 and 2 flats setting the tone for a negative mid-day A/DL of 3/38 and 2 flats;
  • The 3 pm hour solidified a continuing negative A/DL of 4/39 and 0 flat culminating in tumultuous close with a negative A/DL of 2/40 and 1 flat. 

 

The Nasdaq pressured by a more than 4.90% decline in the iShares Nasdaq Biotechnology ETF (IBB), which fell into bear market territory on an intraday basis, or more than 20% below its 52-week high. IBB also fell below its closing low from the Aug. 24 "flash crash” while the SPDR Biotech ETF (XBI) fell 6.85% while the Health Care select SPDR (XLV) fell -2.73%

  • Again referencing the title, peeling the onion of sector disarray is not just a metaphor but, a question of investing diligence and guidance!

 

You can bet your last dollar, no one’s eager to take on risk over this weekend!

 

 

Dosing the sector – 43 Patients:

  • Open: POSITIVE with 14 decliners, 25 advancers and 4 flats;
  • 1st hour (10:00 am): NEGATIVE 28 decliners, 13 advancers and 2 flat;
  • 1st hour (10:30 am): NEGATIVE with 33 decliners, 8 advancers and 2 flat;
  • 2nd hour (11:30 am): NEGATIVE with 32 decliners, 8 advancers and 3 flats;
  • Mid-day (12:30 pm:  NEGATIVE with 38 decliners, 3 advancers and 2 flats;
  • 3 pm: NEGATIVE with 39 decliners, 4 advancers and 0 flat;
  • Closing bell: NEGATIVE with 40 decliners, 2 advancers and 0 flat

 

 

The week’s indexes in review:

  • The iShares Nasdaq Biotechnology ETF (IBB) closed DOWN on Friday -15.98 or -4.90% after Thursday’s decline of -6.60 or -1.98% after Wednesday’s decline of -2.58 or -0.77% following Tuesday’s decline of  -5.07 or -1.49% after Monday’s decline of -16.29 or – 4.57%;
  • The Russell 2000 (IWM) closed DOWN on Friday -1.48 or -1.31% after Thursday’s decline of  -0.21 or -0.19% after Wednesday’s decline of  -0.34 or -0.30% following Tuesday’s decline of -1.75 or -1.52% after Monday’s decline of -0.21 or -0.18%;
  • The SPDR SD&P Biotech ETF (XBI) closed DOWN on Friday -4.96 or -6.85% after Thursday’s decline of -0.90 or -1.23% after Wednesday’s decline of  -0.04 or -0.05% following Tuesday’s decline of-1.63 or -2.17% after Monday’s decline of -4.28 or -5.39%;
  • The CBOE Volatility Index (.VIX) closed Friday above 23 following Thursday’s at near 23 after Wednesday’s near 22 following Tuesday’s 23.5 after Monday’s below 22

 

 

A comparison of the closing bell patterns of advance/decline lines:

  • Last, Friday: 27/15;
  • Monday: 6/35;
  • Tuesday: 7/33;
  • Wednesday: 12/30;
  • Thursday: 17/23;
  • Today, Friday: 2/40

 

 

Friday’s trading indications: 4 hits/ 6 misses:

  • Aduro Biotech (ADRO) closed DOWN – miss;
  • Applied Genetics Technology (AGTC) closed DOWN -$0.80, how many times I’m right – hit;
  • AxoGen (AXGN) closed DOWN – miss;
  • Bellicum Pharma (BLCM) closed DOWN – hit;
  • bluebird bio (BLUE) closed DOWN – miss;
  • Capricor (CAPR) closed DOWN -$0.58, how many times I’m right – hit;
  • Intrexon (XON) closed DOWN – miss;
  • Neuralstem (CUR) closed DOWN – hit;
  • Spark Therapeutics (ONCE) closed DOWN – miss;
  • uniQure (QURE) closed DOWN – miss;

 

 

Who is down – lowest 5?

  • bluebird bio (BLUE) was down -$10.81 to $100.21;
  • Spark Therapeutics (ONCE) -$5.05 to $48.08;
  • Intrexon (XON) -$4.65 to $39.34;
  • Kite Pharma (KITE) -$3.55 to $57.02;
  • Juno Therapeutics (JUNO) was down -$2.21 to $39.88

 

 

Who was UP?

  • Histogenics (HSGX) closed up +$0.20 to $4.90;
  • ReNeuron (RENE.L) is up +$0.25 to $4.375

 

 

Who was flat?

  • Cesca Therapeutics (KOOL) at $0.64

 

 

The facts stated and the opinions given in this publication are based on data and information considered to be reliable and have been carefully worked into my analyses and prognoses. However, no guarantee can be given as to their fairness, accuracy or completeness.

Henry McCusker, the editor and publisher of RegMed Investors does not hold or have positions in securities as referred to in this publication.