Update -4 After Close 12/7/18 Market Performance for the Week

XBI down 7.8%, IBB down 6.6%, XLV down 5.2%, QQQ down 5.11%.

Futures not looking good at 12:40a EST, NAZ down 0.82%.

Global Growth worries mount; geopolitical turmoil reigns.

Moderna (MRNA) IPO closes down 19.13% to $18.60: Largest Biotech to Go Public…https://finance.yahoo.com/news/nasdaq-welcomes-moderna-inc-nasdaq-185435974.html


Update-3 After Close NASDAQ Recovers and Goes Green!

But be cautious because there is plenty of geopolitical drama every day .

  • NAZ goes from down 1.5% to up 0.42%.
  • XBI up 0.32% to $80.70, IBB up 0.16%, XLV down 0.38%at $92.93.
  • Large Cap top winners: BIIB up 1.23%, BMY up 2.34%, REGN up 2.385.
  • Mid-caps go green.

Update -2… 12:47 pm Healthcare trade not working today UNH down over 3%, XLV down 1.94%, BMY up 1.84% at $53 on BMO upgrade. Biotech greens beginning to show up XBI holding bottom.

Update-1 …12/6 am S&P Down 1.92% at 2648, NASDAQ down 1.05% at 7083

On More volatility: “I dont understand these trend following models”…” the SEC needs to look into programmed trading and algos”…on fiscal policy-” we should not have cut taxes on wealthy people, bad fiscal policy”…Leo Cooperman, Omega Advisors Chairman on CNBC this am 12/6. (Algos are estimated to be 50% of all trading and creates volatility.)


Abrupt Market Reversal Derails Biotech Stocks Despite Good ASH News

Macro Events Derail Biotech Rally: Inverted Yield Curve for 2/10 year treasury, Uncertainty about China Deal bringing Concerns about Global Economic Growth.

Our Top Pick Tesaro (TSRO) Offered Some Relief Up Over 100% in One Month!

You will read many opinions and analysis as to why biotech stocks joined the avalanche of selling on Tuesday: investors protecting 2018 gains, skepticism over a China Trade deal or maybe just a lack of buyers at an important technical level at S&P 2850. To feed fears further bonds and cash looked good with an inverted yield curve and the 10 Year Treasury falling to 2.921%.

What was unusual is that the downdraft followed gains on Monday and improving technical trends in the sector surprising  biotech investors who may have become complacent after good clinical news from the American Society of Hematology (ASH) and the acquisition of Tesaro (TSRO) by GlaxoSmith Kline for $4.2B. So with two major catalysts unable to bring gains , it will be hard to regain momentum by year-end.

We brought you good gains with our Tesaro (TSRO) pick up over 100% from $35 in one month. Amgen (AMGN) fell 2.55% despite promising clinical results on a bispecific antibody (BiTE) AMG 420 which was fast tracked by the FDA for patients with Multiple Myeloma and Acute Myeloid Leukemia (AML). Amgen (AMGN) hit $207 on 12/3 with buyers rushing in but now the stocks is $198.

The healthcare sector has been a leader in 2018 with the Healthcare Select SPDR ETFs (XLV) up 11.6% YTD. Investors could move money to healthcare because it is less sensitive to global turmoil and trade.

Obviously it was a red screen day on Tuesday with only a few biotech stocks up.

So we are back in the no-man’s land of October where selling begets selling, bear market sentiment reigns and biotech stocks are coupled to macro events. So we wait for the bad news to get digested and while we raise some cash.

RISK is OFF. Cash is King!

Disclosure long AMGN, BMY, XLV

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