March 10, 2016 6:25am

 

Frequently, downtrends are interrupted by brief periods of recovery - or small rallies - where prices temporarily rise.

 

Remember, a dead cat bounce is a price pattern that is usually identified in hindsight.

 

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I say today what others won't, so you can do what others can't; whether information or intelligence is good, bad or somewhere in between – it defines the who, when, where, which and what of it …

 

Dow futures are UP +0.17% and NASDAQ futures are UP +0.37 %

 

U.S. stock index futures indicated a higher open on Thursday as traders eyed a meeting of the European Central Bank in Frankfurt, Germany.

European equities were trading slightly higher as investors look ahead to the European Central Bank's (ECB) latest meeting.

Asia markets were mixed, as traders digested another round of Chinese data, as well as interest rate decisions from central banks in New Zealand and South Korea.

 

Data docket: initial claims are due at 8:30 a.m. ET, with the Federal budget released at 2:00 p.m.

 

 

The stem, cell and gene therapy RegMed sector closed POSITIVE on Wednesday, NEGATIVE on Tuesday, POSITIVE on Monday and Friday and NEGATIVE on last Thursday.

 

Past five (5) days (of 43 covered companies):

·         Wednesday closed POSITIVE with 19 decliners, 23 advancers and 1 flat;

·         Tuesday closed NEGATIVE with 32 decliners, 9 advancers and 2 flats;

·         Monday closed POSITIVE with 12 advancers, 31 advancers and 1 flat;

·         Friday closed POSITIVE with 16 decliners, 24 advancers and 3 flat

·         Last, Thursday closed NEGATIVE with 23 decliners, 18 advancers and 2 flats;

 

 

The stem, cell and gene therapy regenerative medicine (SCGT&RM) sector opened up, slipped to the downside at the mid-day and closed positive on Wednesday!

  • Keeping last night’s hat on …”Forget about buying what’s cheap --- as many <stocks> will just get cheaper! The portfolio that I like the best is ranked by cash position <see the spread sheet under Q4/15 results> as those who have cash stashed in the company mattress".

 The Bottom Line: Don’t be afraid to be fearful – it’s only a protective regulator!”

  • A dead cat bounce is just another price pattern! It becomes a dead cat bounce (and not a reversal) after price drops below its prior low.

Short-term traders may attempt to profit from the small rally, and traders and investors alike may try to use the temporary reversal as a good opportunity to initiate a short position.

  • I hope “our” universe is NOT becoming the most untrusted sector in the market because of the alternating positive/negative closes <above> combined with the  advance/decline lines which have been going on since the first of the year … and before.

Many say volatility is coming back, I say it never left as sentiment weakens while conviction leaves the conversation and resistance violates support levels.

 

 

You’ve made it to the office, turned on the monitor having just gotten your coffee and it hits you - what could be Thursday’s trades?

  • Athersys (ATHX) closed UP +$0.02 to $1.87. Financial results/earnings today at 4:30 pm for conference call. Let’s see what the ATM usage was during the period. I will need convincing to become a believer of the MultiStem® cell therapy product which has several ongoing clinical trials. The stock has seen considerable volume and price appreciation since January while increasing by as much as an addition $1 per share at times in comparison to previous prices in January- SELL;
  • Harvard Apparatus RT (HART) closed UP +$0.06 to $1.56. Since March 1, we have seen a progressive upswing with small downside strikes. The upside will hopefully be provided by their recent second generation by HART and Mayo Clinic confirming their collaborative large-animal bioengineered organ implant surgeries – BUY;
  • Intrexon (XON) close UP +$1.08 to $37.55 becoming a jagernaught of value – Zika fear driven. The after-market indications is +$0.45 – BUY;
  • StemCells (STEM) closed DOWN -$0.11 or -30.4% to $0.26 after announcing an offering at $0.30. Why would anyone buy the warrants at full price? The Series A Warrant is priced to purchase 0.50 of a share of common stock and a Series B Warrant to purchase 0.75 of a share of common stock. Another issue if the offering is completed <probably at a lower pricing> Maxim’s cut will minimize proceeds to the company – SELL;
  • Vericel (VCEL) closed UP +$0.02 to $2.12 after extending its runway with a term loan agreement with Silicon Valley Bank at a cost of $112,500 <$50 K at the onset and $62.5 K at conclusion> to borrow at 4.25%. Expensive but, needed, surprised no warrants - HOLD;

 

 

Opinions expressed are those of the author and are subject to change, and are 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.

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