September 21, 2018 7:54am

Two major market events have the potential to send equity volumes higher will strike on Friday.

The first is the quarterly event known as “quadruple witching” -- when futures and options on indexes and individual stocks expire. That generally results in some of the biggest trading days of the year. But today brings a wild card -- the largest revision to the Global Industry Classification Standard (GICS) since 1999.

 

Pre-open indications: 1 BUY, 1 SELL with news, 2 HOLDS with financings, 7 overbought and 1 oversold

Financing: Fate Therapeutics (FATE) priced their 9,250,260 share offering at $13.50 for an aggregate of approximately $125 million. FATE had closed at $14.03 (+$0.67 or +5.01%)

 

What is fair game as defined by legitimate equities to trade?

RMi provides a pre-market synopsis for the U.S. trading day.

U.S. stock index futures are slipping  

Dow futures are UP +0.07% (+19 points) and NASDAQ futures are DOWN -0.05% (-4 points)

 

U.S. stock index futures are slipping and sliding ahead of Friday's open hoping to extend its positive run

European and Asian markets posted solid gains during their Friday sessions.

 

Data docket: the latest flash U.S. composite purchasing managers' index figures, scheduled for publication at 9:45 a.m. ET.

 

 

Today’s indications:

  • The iShares Nasdaq Biotechnology (IBB) is indicating a +0.3% UPSIDE in Friday’s pre-market;
  • The SPDR S&P Biotech ETF (XBI) is indicating a +0.09% UPSIDE in Friday’s pre-market;
  • The Health Care Select Sector SPDR ETF (XLV) is NOT indicating in Friday’s pre-open;
  • The iShares Russell 2000 (IWM) is indicating a +0.26% UPSIDE in Friday’s pre-open

 

Henry’omics:

U.S. stock-index futures inched higher on Friday, indicating that Wall Street would extend its recent uptrend and push further into record levels.

The sector and my universe of 45 companies have been grinding higher in a low-volume flea market for several sessions. The gains have largely been supported by momentum, barely any news generated by trading – not investing although improving fundamentals have helped the ride!

Although the past three (3) sessions have exhibited strength; there has been thirteen (13) sessions in September (so far) –six (6) negative closes and seven (7) positive closes - don’t get too optimistic!

“Quadruple witching” usually entails a ... roller-coaster ride by sessions end - let's see?

 

I always want to know what happened PRIOR to what might happen today – it sets a tone of consequence:

From Thursday’s night’s newsletter: “Investors should be more concerned with tomorrow - Friday’s “quadruple witching”. With a potential of a very volatility day with the combination of quadruple witching, which only happens four (4) times a year, and an almost once in a lifetime change in S&P 500 GICS. While the quadruple witching event normally coincides with index rebalancing, the scope of Friday’s shuffling is what sets it apart. The last quadruple witching was June 15, and S&P 500 trading volume surged 75% to 3.5 billion shares from the previous month.”

The iShares NASDAQ Biotechnology (IBB): history lesson

  • Thursday closed up +1.39%
  • Wednesday closed up +0.13%
  • Tuesday closed up +1.12%
  • Monday closed down -1.32%
  • Friday was down -0.51%
  • For a five session aggregate of +0.81% - I’d trade carefully!

Of the 45 companies covered on Thursday; 10 downside equities finished in a range of -0.53% (ATHX) to -5.59% (CRSP) while 34 upside equity oscillated from +0.15% (FIXX) to +12.73% (MDXG) with 1  flat closes (AST).

In 13 sessions in September (so far) – there were 6 negative closes and 7 positive close;

In 21 August sessions – 6 had negative and 15 positive closes

 

Companies in my headlights – It’s your decision; I provide the idea and context:

I sticking with the issue of reflex action and overbought – if NOT today but, by Monday:

 

Overbought: still considered …

BLUE, BSTG, RARE, AXGN, CLBS, VCEL and back on the list: QURE

Oversold:

Adverum Biotechnologies (ADVM) closed down -$0.10 to $6.75 and is up +$0.45 or +7.84% in the aftermarket – BUY;

News:

Fate Therapeutics (FATE) closed up +$0.67 to $14.03. Post the close, FATE announced a proposed offering and is down -$0.23 or -1.64% in the aftermarket as the pricing of the offering is set at $13.50– HOLD;

CRISPR Therapeutics (CRSP) closed down -$2.90 or -5.59% to $48.99 after announcing a $230 M offering of 4,210,526 M shares  priced at $47.50 and is down another -$0.60 or -1.22% to $48.39 –HOLD;

MiMedx Group (MDXG) closed up +$0.70 to $6.20 with post-closing bell news of a NASDAQ listing extension. MDXG which faces federal probes, will claw back compensation from four former top managers including Parker Petit, who resigned as CEO earlier this year. Former COO Bill Taylor and ex-finance chiefs Michael Senken and John Cranston are also subject to claw backs, MDXG said in regulatory filing. Last year, after a long streak of beating its own profit forecasts, MiMedx became the focus of short-sellers alleging it had defrauded the U.S. government and inappropriately booked sales of products that hadn’t been ordered. The aftermarket indication is -$0.22 or -3.55% - SELL;

Spark Therapeutics (ONCE) closed up +$0.55 to $57.18. ONCE announced that the Committee for Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA) adopted a positive opinion recommending approval of LUXTURNA® (voretigene neparvovec), a one-time gene therapy for the treatment of adult and pediatric patients with vision loss due to inherited retinal dystrophy caused by confirmed biallelic RPE65 mutations and who have sufficient viable retinal cells. LUXTURNA would be first and only gene therapy approved in EU to treat patients with vision loss due to inherited retinal dystrophy caused by confirmed biallelic RPE65 mutations and who have sufficient viable retinal cells, a condition leading to total blindness in most patients. Positive opinion based on robust data package supporting safety, efficacy and durability of response for up to three years after one-time treatment with LUXTURNA – BUY;

 

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.