RegMed’s close: expiration Friday expired and being oversold was overdone

January 15, 2016 5:56pm

There’s a lot of turbulence left but, a buying opportunity for risk-less companies

Be careful, if Tuesday is shaky – all trades will be in the wind

WHY … the difference is shifting volatility while liquidity drives lower risk appetites. Subscribe or take your losses without complaining …

Investors suffer from the paradox of information overload. If you have a smartphone in your pocket, you can access more information about the financial markets than the world's top hedge funds did 20 years ago. Yet, I bet your investment returns have not improved one iota as a result.

But, who is interpreting that information … get it here!

U.S. stocks ended the day with sharp losses Friday, posting the worst 10-day start to a year in history. A combination of plunging crude-oil prices and worries about slowing growth in the U.S. and China unsettled investors. Stocks trimmed their losses in the last hour of trading, but remained sharply lower. The S&P 500 SPX, -2.16% closed 45 points, or 2.3%, lower at 1,876. The Dow fell 392 points, or 2.4%, to 15,987. Meanwhile, the NASDAQ ended the day down 127 points, or 2.7%, at 4,488.

The NASDAQ is DOWN at the mid-day -126.59 or -2.74% to 4,488.42 and the DOW is DOWN -390.97 or -2.39% to 15,988.08.

Henry’omics:

My pet peeve: high-frequency trading accounted for 49% of January's daily trading volume of about 8.97 billion shares <according to TABB Group> - once you add in today, those numbers will blossom.

• Friday also marked an options expiration day that contributed to some volatility.

Thank you GOD, U.S. stock markets are closed Monday for Martin Luther King, Jr. Day.

• China GDP is among the few data points from the country due out ahead of Tuesday's U.S. trading session.

The stem, cell and gene therapy RegMed (SCGT&RM) sector opened, stayed and closed negative (of 43 covered companies).

• I attribute today’s pain to extremely oversold conditions … while the algorithms “hyping” trading … investors need to understand more about “our” universe and its patterns of movements!

Reiterating, the SCGT&RM) sector is suffering more technical damage than I had originally stated at the mid-day but, what worries me is this systemic lack of confidence.

• "Finally, let's not forget there's very little countercyclical liquidity, which means, when we hit a small air pocket, it turns out to be large” – Allianz’s Mohamed El-Erian

My fear gauge or the CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market traded

·         Friday traded at 28 down from 30;

·         Thursday traded near 24;

·         Wednesday closed UP near 25;

·         Tuesday traded DOWN to 22.5

·         Monday traded near 24

A day in the life of the stem, cell and gene therapy RegMed (SCGT & RM) sector – the advance/decline line scenario …

• Friday, the stem, cell and gene therapy RegMed sector opened negative with an A/DL of 5/37 and 1 flat as compared to yesterday’s 6/35 and 2 flats.  The mid-day stayed negative with an A/DL of 4/38 and 1 flat as compared to yesterday’s 29/14 and 0 flat while the closing bell rang with another negative A/DL of 9/33 and 1 flat as compared to yesterday’s close with a positive A/DL of 30/13 and 0 flats.

Dosing the sector – what a day for the 43 Patients:

• The market opened: NEGATIVE with 37 decliners, 5 advancers and 1 flat;

• The mid-day (12:30 pm: stayed NEGATIVE with 38 decliners, 4 advancers and 1 flat;

• Closing bell: NEGATIVE with 33 decliners, 9 advancers and 1 flats

Friday’s indications: 6 hits and 3 miss and early!  NO one can “pick” this market even where value resides!

• Applied Genetic Technologies (AGTC) closed UP – hit;
• BioLife Solutions (BLFS) closed DOWN – hit;
• Bluebird bio (BLUE) closed DOWN – hit;
• Caladrius Biosciences (CLBS) closed FLAT – hit;
• Capricor (CAPR) closed UP <minutes before the close>– miss;
• Histogenics (HSGX) closed DOWN – miss <said HOLD>;
• Kite Pharma (KITE) closed UP – hit;
• Neuralstem (CUR) closed DOWN – hit;
• Verastem (VSTM) closed DOWN – miss <still grossly undervalued>;

Riding the indexes and ETFs roller-coaster:

• The iShares Biotechnology Stocks ETF (IBB) closed DOWN on Friday -7.26 or -2.49% following Thursday’s advance of +11.30 or +4.03% after Wednesday’s decline of  -16.06 or -5.42% following Tuesday’s advance of +4.51 or +1.55%  having closed DOWN on Monday -10.51 or -3.48%;

• The NASDAQ Biotechnology index (NBI) closed DOWN on Friday -78.54 or -2.57% following Thursday’s +118.01 or +4.02% after Wednesday’s -164.30 or -5.30 % following Tuesday’s +44.84 or +1.47% having closed DOWN on Monday -107.65 or -3.41;

• The Russell 2000 (IWM) closed DOWN on Friday -1.65 or -1.62% following Thursday’s advance of  +1.39 or +1.38% after Wednesday’s -3.33 or -3.21% following Tuesday’s advance of +0.31 or +0.30% having closed DOWN on Monday -0.45 or 0.43%;

• The SPDR SD&P Biotech ETF (XBI) closed DOWN on Friday -1.76 or -3.10% following Thursday’s +2.12 or 3.87% after Wednesday’s decline of -4.08 or -6.94% following Tuesday’s +1.68 or +2.94% having closed DOWN on Monday -3.37 or -5.57%

Who closed DOWN - 10:

• Spark Therapeutics (ONCE) closed down -$2.86 to $29.40;
• bluebird bio (BLUE) -$1.93 to $44.64;
• Juno Therapeutics (JUNO) -$1.71 to $33.85;
• Cellectis (CLLS) -$1.59 to $22.78;
• Osiris (OSIR) -$1.50 to $7.28;
• Aduro Biotech (ADRO) -$0.83 to $20.65;
• Mesoblast (MESO) -$0.41 to $5.96;
• Harvard Apparatus RT (HART) -$0.27 to $1.63;
• Bellicum (BLCM) -$0.27 to $12.69;
• Histogenics (HSGX) closed down -$0.21 to $2.23;

Who closed UP – 0nly 9:

• Intrexon (XON) closed up +$1.95 to $27.11;
• Applied Genetic Technologies (AGTC) +$0.83 to $15.55;
• Kite Pharma (KITE) +$0.71 to $55.63;
• Regenxbio (RGNX) +$0.12 to $12.60;
• Northwest Bio (NWBO) +$0.09 to $2.15;
• Capricor (CAPR) +$0.09 to $2.10;
• Avalanche (AAVL) +$0.07 to $6.07;
• uniQure (QURE) +$0.07 to $15.90;
• Cesca Therapeutics (KOOL) closed up +40078 to $0.1279

Flat:

• Caladrius Bioscience (CLBS) at $0.65

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.