October 22, 2018 5:56pm

The sector needs to stabilize before investors hurdle the lack of support and confidence

Low volume exaggerates the downward slide as any expectation has been shattered

 

Big issue, many investors have been ignoring the vulnerability of the sector

 

The next few trading sessions will be critical for the RegMed sector which will establish whether market reaction to recent events is temporary and short-lived, or if this is the start of a more fundamental correction.  


The Strange Case of Dr. Jekyll and Mr. Hyde might make for a great read, but it’s far less fun when the markets act like it’s their blueprint. Stocks have lately been alternating between the horrific and the benign.

 

Daily analytics and metrics:

  • The Dow closed down -126.93 points or -0.50% to 25,317.41
  • The S&P closed down -11.90 point or -0.43% to 2,755.88
  • The NASDAQ closed up +19.6 points or +0.26% to 7,468.63

 

The advance/decline line scenario of 45 covered companies:   

  • The open was negative with an A/DL of 8/33 and 3 flats;
  • The mid-day was negative with an A/DL of 15/29 and 1 flat;
  • The close was negative with an A/DL of 11/33 and 1 flat;

 

Five (5) key metrics: 

… The greatest volume to the downside:  HSGX, VSTM, ADRO, SGMO and XON

… Upside volume was weighted to:  GBT, IONS, BMRN, RGNX and BOLD

… Leadership ($) to the downside: SAGE (-$4.44), BLUE (-$3.35), FATE (-$2.21), ONCE (-$1.97) and ADRO (-$1.85)

… Best moves ($) to the upside:  IONS (+$1.51), SLDB (+$0.70), GBT (+$0.67), AXGN (+$0.640 and BMRN (+$0.31)

… The iShares NASDAQ Biotechnology (IBB) closed:

  • Monday was down -1.44% after indicating a POSITIVE +0.01% in the pre-market;
  • Friday was down -1.58% after NOT indicating in the pre-market;
  • Thursday was down -1.47% after NOT indicating in the pre-market;
  • Wednesday was down -0.05% after indicating a NEGATIVE -0.11% in the pre-market;
  • Tuesday was up +4.23% after indicating a POSITIVE +0.85% in the pre-market;
  • Last Monday was down -1.04% after indicating a NEGATIVE -0.79% in the pre-market;

 

Henry’omics:

As I stated in the a.m. post, I was also BLINDSIDED – maybe I am reacting emotionally for it doesn’t seem – RATIONAL for the STEALTH liquidation!

Hedge funds and dark pools have left retail investors holding the bag!

NO excuse but, investors are grappling with increasing geopolitical tensions!

In 16 sessions in October – there were 13 negative closes and 3 positive closes while last week expressed 4 negative and 1 positive closes – says a lot for confidence and sentiment as volatility reigned.

Review the last six (6) sessions:

  • Monday closed NEGATIVE with 33 decliners, 11 advancers and 1 flat;
  • Last Friday closed NEGATIVE with 34 decliners, 8 advancers and 3 flat;
  • Thursday closed NEGATIVE with 36 decliners, 8 advancers and 1 flat;
  • Wednesday closed NEGATIVE with 25 decliners, 19 advancers and 1 flat;
  • Tuesday closed POSITIVE with 4 decliners, 39 advancers and 2 flats;
  • The previous Monday closed NEGATIVE with 26 decliners, 17 advancers and 2 flats;

Weakness on display:

Review the range of the 11 upside from +$0.01 or +0.16% (AGTC) to +$1.51 or +3.44% (IONS) while the 33 downside ranges from -$0.08 or -0.31% (CLLS) to -$1.85 or -29.46% (ADRO) with a 1 flat close (RENE.L).

Interesting stat: Volume has been DECREASING … look at the depth – 2 out of 11 of the upside had higher (than the 3 month average) volume while the downside experienced 15 having greater volume (than the 3 month average) out of 33.

 

From the pre-open newsletter, “there is an aftermath to a downside spiral? We’ve danced the limo - can we next dance our portfolio with a Texas two-step and double shuffle to the upside. The OVERSOLD are ready for a game of pick-up-stocks.”

 

October sessions:

Monday closed NEGATIVE with 33 decliners, 11 advancers and 1 flat;

Friday closed NEGATIVE with 34 decliners, 8 advancers and 3 flat;

Thursday closed NEGATIVE with 36 decliners, 8 advancers and 1 flat;

Wednesday closed NEGATIVE with 25 decliners, 19 advancers and 1 flat;

Tuesday closed POSITIVE with 4 decliners, 39 advancers and 2 flats;

Monday closed NEGATIVE with 26 decliners, 17 advancers and 2 flats;

Friday closed POSITIVE with 9 decliners, 35 advancers and 1 flat;

Thursday closed NEGATIVE with 38 decliners, 7 advancers and 0 flat;

Wednesday closed NEGATIVE with 42 decliners, 2 advancers and 1 flat;

Tuesday closed NEGATIVE with 23 decliners, 18 advancers and 4 flats;

Monday closed NEGATIVE with 34 decliners, 10 advancers and 1 flat;

Friday closed NEGATIVE with 26 decliners, 17 advancers and 2 flat;

Thursday closed NEGATIVE with 35 decliners, 8 advancers and 2 flat;

Wednesday closed POSITIVE with 16 decliners, 27 advancers and 2 flat;

Tuesday closed NEGATIVE with 32 decliners, 12 advancers and 1 flat

Monday (10/1) closed NEGATIVE with 33 decliners, 13 advancers and 1 flat;

  • In 19 sessions in September – there were 10 negative closes and 9 positive close;
  • In 21 August sessions – 6 had negative and 15 had positive closes

 

 

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.