April 17, 2020 5:55pm

How sustainable is this comeback and for how long until the soulless algorithms exact their toll to skim “the vig, vigorish or juice” of the sector’s incline?

Pre-open indications: 12 HITs < BLUE (+$3.15), CRSP (+$1.91), EDIT (+$0.75), FATE (+$2.50), IONS (+$1.79), PSTI (-$0.65), NTLA (+$0.42), SAGE (+$2.71), SGMO (+$0.35), STML (+$0.23),  VSTM (+$0.14), MESO (-$0.14) and 4 MISS < ATHX (-$0.21), VYGR (+$0.62), RARE (+$1.91), GBT (+$2.90)>    

The week in review - TGIF

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The Dow closed UP +704.81 points (+2.99%), the S&P closed UP +75.01 points (+2.68%) while the NASDAQ closed UP +117.78 points (+1.38%)

 

Henry’omics:

Indexes surged on HOPE after a report said a Gilead Sciences drug showed some effectiveness in treating the coronavirus – will it, it does NEED more trials and definition of after effects!

Another exclamation point, it’s a beginning but, we need TESTING to evaluate who needs to take any drug or vaccine in development!

Hope is still a far drive from the difference between trust and conviction. Trust is something you can rely on, beyond certainty. Conviction doesn't demand that you, or anyone else, play by the rules. After gains, there’s pain; followed by advances, declines and other progressions or regressions?

I love 96% of my covered companies, some I have to keep to expose the differentiation of investment thesis, rankings, estimates, forecasts in some cases – their misdeeds!

Do sector investors think equity pricing is unassailable? My answer is YES - they have been unreliable and once attained susceptible to be vulnerable!

The week topped-off the indexes as gain put the S&P 500 up +3%, while the Nasdaq climbed 6.1% and the Dow was up +2.2%.

The morning post was titled, “RegMed Investors’ (RMi) pre-open: news of a possible antiviral drug and a 3-phase country reopening roadmap spurs a market response” ... https://www.regmedinvestors.com/articles/11319

 

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

  • Friday, the IBB closed up +4.67% and XBI also closed up +5.51%;
  • Thursday, the IBB closed up +2.93% and XBI also closed up +2.70%
  • 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:

  • Friday was down -1.96 points or -4.89% at 38.15,
  • Thursday was down -0.73 points or -1.79% at 40.11,
  • 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: colars define the progressions and regressions …

  • Friday opened positive at 32/3, stayed positive at the mid-day at 31/4 closing positive at 29/6;
  • Thursday opened positive at 19/16, flipped negative at the mid-day at 10/24 and 1 flat (BSTG) closing negative at 14/20 and 1 flat;
  • 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;

 

Friday’s (top 10 of 14) incliners:

  • Alnylam Pharmaceuticals (ALNY +$10.76 after Thursday’s +$6.22, Wednesday’s +$1.06, Tuesday’s +$1.71 and last Monday’s +$2.63);
  • ReNeuron (RENE.L +$6.50 after Thursday’s -$2.50 after Wednesday’s -$15.00 and Tuesday’s -$13.00;
  • bluebird bio (BLUE +$3.15 after Thursday’s +$5.19, Wednesday’s -$1.04, Tuesday’s +$2.76 and last Monday’s -$0.59);
  • Global Blood Therapeutics (GBT +$2.90 after Thursday’s +$1.03, Wednesday’s -$2.45 and Tuesday’s +$4.07);
  • Sage Therapeutics (SAGE +$2.71);
  • Fate Therapeutics (FATE +$2.50);
  • uniQure NV (QURE +$1.92 after Thursday’s +$1.61, Wednesday’s -$2.61, Tuesday’s +$2.61 and Monday’s +$1.23);
  • Ultragenyx Pharmaceuticals (RARE +$1.91 after Thursday’s +$0.55, Wednesday’s -$1.28, Tuesday’s +$4.36 and Monday’s +$0.73);
  • CRISPR Therapeutics (CRSP +$1.91 after Thursday’s +$1.12 and Wednesday’s +$1.38);
  • Ionis Pharmaceuticals (IONS +$1.79 after Thursday’s +$2.47, Wednesday’s -$1.90, Tuesday’s +$1.52 and Monday’s -$1.75);

Friday’s (only 5) decliners:

  • Homology Medicine (FIXX -$0.80);
  • Pluristem (PSTI -$0.65 after Thursday’s -$0.75 after Wednesday’s +$1.36);
  • Biostage (BSTG -$0.47);
  • Athersys (ATHX -$0.21 after Thursday’s -$0.82, Wednesday’s +$0.0068 with news of offering after Tuesday’s -$0.36, Monday’s +$0.55 following last Thursday’s -$0.06);
  • Mesoblast (MESO -$0.13 after Thursday’s -$0.38);
  • Aduro Biotechnologies (ADRO -$0.120;

 

Today’s stand-outs: a few to mention, not all …

  • 8-session upside repeater – Alnylam Pharmaceuticals (ALNY);
  • 3-session – CRSPERS Therapeutics (CRSP);
  • 2-session repeater – bluebird bio (BLUE), Ionis Pharmaceuticals (IONS), Global blood Therapeutics (GBT), Regenxbio (RGNX), Ultragenyx (RARE), uniQure NV (QURE) and CRISPER Therapeutics (CRSP);
  • A lot of new additions to the upside having been down yesterday – AxoGen (AXGN), Applied Genetic Technologies (AGTC), Caladrius Biosciences (CLBS), MiMedx (MDXG), Solid Biosciences (SLDB) and Stemline Therapeutics (STML);
  • Popping back following 4 down session after 6-sessions of upside – ReNeuron (RENE.L);
  • And finally a welcome to – Vericel VCEL);
  • Hop-scotching – Biostage (BSTG closed down after twice (2x) being flat following closing positive 3 times versus 7 negative closes in the last thirteen (13) sessions since April 1st;
  • 3-hammering sessions after 7- up sessions– Pluristem (PSTI);
  • Crashing again after offering announcement <2/15/2020> - Athersys (ATHX);

 

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

  • Friday’s volume was THIN as 9 out of the 29-upside had higher than the 3-month average volume and HIGH as only 5 out of the 6-downside had higher than the 3-month average volume;
  • Thursday’s volume was LEANER as 2 out of the 14-upside had higher than the 3-month average volume and only 1 out of the 20-downside had higher than the 3-month average volume;
  • 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 …

  • Friday’s % of the 29-upside were +0.61% (BLCM) to +15.15% (VCEL) while the 6-downside ranged from -1.86% (MESO) to -12.63% (BSTG). 
  • Thursday’s % of the 14-upside were +0.11% (RARE) to +6.88% (BLUE) while the 20-downside ranged from -0.59% (SAGE) to -26.29% (ATHX). 
  • 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:

A swing to a new high after a report said a Gilead Sciences (GILD) drug showed some effectiveness in treating the coronavirus, giving investors some hope there could be a treatment solution that helps the country reopen faster from the widespread shutdowns that have plunged the economy into a recession.

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

  • Friday’s 683,700
  • Thursday’s 641,000,
  • Wednesday’s 610,700,
  • Tuesday’s 584,000,
  • Monday’s 560,800,

Friday’s death rate escalated to 34,575 after Thursday’s 31,590, Wednesday’s 26,119, Tuesday’s 24,485 and Monday’s 22,861 <John Hopkins University>

 

Upside volume stats: 

  • Friday: 9 out of the 29-upside had higher than the 3-month average volume;
  • Thursday: 1 out of the 14-upside had higher than the 3-month average volume;
  • 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:

  • Friday: 5 out of the 6-downside had higher than the 3-month average volume;
  • Thursday: 1 out of the 20-downside had higher than the 3-month average volume;
  • 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

Friday closed positive with 6 decliners, 29 advancer and 0 flat

Thursday closed negative with 20 decliners, 14 advancer and 1 flat

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:  I am glad the week ended with a positive close, enough weakness for one week after many.

I am still one of those “warning analysis” guys as I was trained – to repeat a mantra, “Don’t get too comfortable; unfortunately share pricing strength is a short-term enemy.”

Presenting an alternative hypothesis clarifies a material fact that 22 million people are unemployed and close to reaching 20% - a level not seen since the Great Depression.

My “GUT” check is to SELL these HIGHS – the algorithms are coming … RUN my followers!

And to further quote myself, “After the hop-scotch week, who is willing in their right mind to be LONG – the index boulders are still WEAK on “Sentiment Mountain”!

 

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.