April 15, 2020 4:57pm

The FOMO – the fear-of-missing-out theory just got debunked by today’s sector and market collapse; truth is harsh, but reality is what it is!

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The Dow closed DOWN – 445.41 points (-1.86%), the S&P closed DOWN -62.70 points (- 2.20%) while the NASDAQ closed DOWN – 122.56 points (-1.44%)

 

Henry’omics:

Indexes and the RegMed/cell and gene sector cratered on Wednesday as dismal albeit depressing economic data and weakened earnings fueled concerns over the coronavirus’s impact on the U.S. economy.

Let’s evaluate the optimistic perception of everything; here is what I see which dispels this acuity:

  • unemployment will be upsized in job losses;
  • the likelihood that rehiring will be hesitant, gradual or deterred;
  • the surge of governmental, public and personal debt;
  • the risks of relaxing social distancing;
  • an unidentified path of pandemic inhibition;
  • and related to the biggest of all, the loss of shareholders in RegMed/cell and gene therapy universe!
  • the lengthening list of the next “shoe and shoes” to drop;

“What light through yonder window breaks?" I ask having thought about yesterday’s upside trend, “don't swear by the moon” the algorithm’s “rules” replied.

Today was also a time to dust off the covers and “break the binders” of some of my old books – with a the reread of “The Physics of wall Street” by James Owen Weatherall to review the “critical phenomena and its universal properties – all rupture as a result of prolonged strain.”

 

The iShares NASDAQ Biotechnology (IBB) and the SPDR S&P ETF (XBI) indicators:

  • Wednesday, the IBB closed down -2.49% and XBI also closed down -2.47%
  • Tuesday, the IBB closed up +3.63% and XBI also closed up +4%
  • Monday, the IBB closed up +0.46% and XBI also closed down -0.16%

 

The CBOE Volatility Index (VVIX: INDEX) tracked:

  • Wednesday was up +3.08 points or +8.18% at 40.82,
  • Tuesday was down -3.41 points or -8.28% at 37.76,
  • Monday was down -0.50 points or -1.20% at 41.17,
  • Two weeks ago, in March, the VIX eclipsed its financial crisis high, closing at 82.69.

 

RegMed/Cell and gene therapy 35 covered equities’ Advance/Decline (A/D) lines: progressions and regressions …

  • Wednesday opened negative at 3/32, stayed negative at the mid-day at 5/30 and 1 flat closing negative at 6/29;
  • Tuesday opened positive at 31/4 and 1 flat, stayed positive at the mid-day at 28/6 and 1 flat closing positive at 31/4;
  • Monday opened negative at 16/17 and 2 flats, stayed negative at the mid-day at 11/24 and closed negative at 16/19;

 

Wednesday’s (only 6) incliners:

  • Pluristem (PSTI +$1.36);
  • Alnylam Pharmaceuticals (ALNY +$1.06 after Tuesday’s +$1.71, Monday’s +$2.63 following Thursday’s +$4.99 and last Wednesday’s +$1.87;
  • Sage Therapeutics (SAGE +$0.95 after Tuesday’s -$0.65 and Monday’s -$0.58 following last Thursday’s -$0.98);
  • Applied Genetic Technologies (AGTC +$0.23);
  • Caladrius Biosciences (CLBS +$0.03);
  • Athersys (ATHX +$0.0068 even with mid-day news after Tuesday’s -$0.36, Monday’s +$0.55 following last Thursday’s -$0.06);

Wednesday’s (bottom 10) decliners: colar differentiates the inclines/declines

  • ReNeuron (RENE.L -$15.00 after Tuesday’s -$13.00;
  • Homology Medicine (FIXX -$5.35 after Tuesday’s +$1.30 and Monday’s -$0.64);
  • uniQure NV (QURE -$2.61 after Tuesday’s +$2.61, Monday’s +$1.23);
  • Global Blood Therapeutics (GBT -$2.45 after Tuesday’s +$4.07);
  • Regenxbio (RGNX -$2.29);
  • Ionis Pharmaceuticals (IONS -$1.90 after Tuesday’s +$1.52 and Monday’s -$1.75);
  • Ultragenyx Pharmaceuticals (RARE -$1.28 after Tuesday’s +$4.36 and Monday’s +$0.73);
  • bluebird bio (BLUE -$1.04 after Tuesday’s +$2.76, Monday’s -$0.59);
  • Cellectis SA (CLLS -$0.86 after Tuesday’s +$1.36 and Monday’s +$0.78);
  • Editas Medicine (EDIT -$0.78);

 

Today’s stand-outs: a wipe-out

  • 8-session upside repeater – Pluristem (PSTI);
  • 5-session repeater –Alnylam Pharmaceuticals (ALNY);
  • Joining the upside - Applied Genetic Technologies (AGTC) – well deserved and Sage Therapeutics (SAGE;
  • Tipping barely up after down sessions: Athersys (ATHX);
  • Floating up after a 2-session downside and news of a restructuring – Sage Therapeutics (SAGE);
  • 2 down session after 6-sessions of upside – ReNeuron (RENE.L);
  • Hop-scotching – Biostage (BSTG closed up 3 times versus 7 down in the last ten (10) sessions since April 1st;

 

Volumes versus 3-month averages: low volume is moving the needle

  • Wednesday’s volume was LOW as 3 out of the 6-upside had higher than the 3-month average volume and only 6 out of the 29-downside had higher than the 3-month average volume.
  • Tuesday’s volume was LACKLUSTER as 10 out of the 31-upside had higher than the 3-month average volume and only 3 out of the 4-downside had higher than the 3-month average volume.
  • Monday’s volume was even LOWER as 5 out of the 16-upside had higher than the 3-month average volume and only 3 out of the 19-downside had higher than the 3-month average volume.

Percentage (%) movement/range statistics: look closely …

Wednesday’s % of the 6-upside were +0.22% (ATHX) to +16.17% (PSTI) while the 29-downside ranged from -0.88% (BCLI) to -27.66% (FIXX) were a lot higher than usual. 

  • Tuesday’s % of the 31-upside were +1.44% (ALNY) to +12.98% (CLLS) while the 4-downside ranged from -2.28% (SAGE) to -12% (BSTG) were a lot higher than usual. 
  • Monday’s % of the 16-upside were +0.33% (FATE) to +19% (BLCM) while the 19-downside ranged from -0.35% (GBT) to -9.70% (VYGR) were a lot higher than usual.  

 

Sentiment and its indicators:

Manufacturing in the New York area slumped by its biggest margin ever to a historic low, surpassing the levels seen in the throes of the Great Recession. The Empire State Manufacturing Index hit -78.2, blowing past the prior worst reading the index had seen of -34.3 during the financial crisis.

Then the Fed weighted in the Beige Book report: economic activity has fallen sharply due to measures taken during the coronavirus scare, with leisure and hospitality and retail being the hardest-hit …

Which points to a greater depth of a recession – we are ALREADY DEEP IN!

Defining pandemic disruption: The number of confirmed U.S. coronavirus cases:

  • Wednesday to 610,700
  • Tuesday to 584,000 …
  • Monday to 560,800,

Wednesday’s death rate escalated to 26,119 following Tuesday’s 24,485 after Monday’s 22,861 <John Hopkins University>

 

Upside volume stats: 

  • Wednesday: 3 out of the 6-upside had higher than the 3-month average volume;
  • Tuesday: 10 out of the 31-upside had higher than the 3-month average volume;
  • Monday: 5 out of the 16-upside had higher than the 3-month average volume;

Downside volume stats:

  • Wednesday: 6 out of the 29-downside had higher than the 3-month average volume;
  • Tuesday: 3 out of the 4-downside had higher than the 3-month average volume;
  • Monday: 3 out of the 19-downside had higher than the 3-month average volume;

 

April

Wednesday closed negative with 29 decliners, 6 advancer and 0 flats

Tuesday closed positive with 4 decliners, 31 advancer and 0 flats

Monday closed negative with 19 decliners, 16 advancer and 0 flats

Friday was a market holiday

Thursday closed positive with 7 decliners, 28 advancer and 0 flat

Wednesday closed positive with 4 decliners, 30 advancer and 1 flat

Tuesday closed negative with 18 decliners, 17 advancer and 0 flats

Monday closed positive with 2 decliners, 33 advancer and 0 flats

Friday closed negative with 23 decliners, 12 advancer and 0 flats

Thursday closed positive with 10 decliners, 23 advancer and 2 flats

Wednesday (4/1) closed negative with 31 decliners, 4 advancer and 0 flat

 

The BOTTOM LINE:  it’s NOT tough being RIGHT in these markets – yesterday’s gold became today’s tin.

Reiterating, “The remainder of the quarter’s trading sessions will be critical for the RegMed/cell and gene therapy sector which establishes that directional reactions are short-lived as its 1 to 2-day upside followed by downside moves facilitate more fundamental corrections. “

 

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.