Archive for the ‘Premium Only’ Category

Biotech Plays – A Few to Consider

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Courtesy of Pharmboy at Phil's Stock World 

[This article has been updated.]

Costs of everything from food, oil and medicine have been increasing for American consumers.  Health care is one expense that is increasing faster than inflation. Over the past 12 years, prescription drug prices have outpaced the two largest health care costs, hospital care and physician services (Figure 1).  However, pharmaceuticals only make up 10% of all health care costs, while hospital and doctor costs make up 52% of the total $2.3T (Figure 2).  More effective prescription drugs and vaccines have transformed health care over the last several decades and many health problems have been prevented, cured, or managed effectively through the use of these agents.1 In some cases, the use of prescription medicines have kept people from more expensive options such as hospitalization and/or surgery.  

Figure 1.  Percent increases of Prescription Drugs, Hospital Care and Physicians (2010, Kaiser)

 

Figure 2.  Health Care Costs (2010, Kaiser)

 

Total = $2.3 Trillion
Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group.

The pharmaceutical industry is headed for a patent expiration cliff, as I pointed out last year (here). The NY Times wrote covered this problem recently (here).  Pharmaceuticals make up a big part of our life. In 2007, 90% of seniors and 58% of non-elderly adults relied on a prescription medicine on a regular basis.2 While the public demands safe, effective drugs, the costs to bring these medications to market keep increasing.  Development costs have soared according to a recent analysis by Tufts.  Tuffs' research showed a 64% increase in the cost to discover and bring a new drug (not a reformulation or recombination of an existing drug) to market from $802M in 2000 to $1,320M in 2006.  The Pharmaceutical industry must recoup the R&D costs for drugs that make it to market, as well as those that do not.  Only one in five drugs that enter the clinical testing process receive FDA approval and are brought to market.The pharmaceutical industry must reinvent itself, and I think personalized medicine will be part of its reinvention and the next wave to take the industry by storm.

Personalized medicine…
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Craigbot1.0 week 2 and 3

Here is a link to the report for how our Forex Robot did this week.  To summarize, we had 24 trades with 16 wins and 8 losses.  We finished the week + $48, which considering the size we are trading is not very good.  I did some more research and have come up with a new set of numbers to try.

pipsDownBuy = 19

stopLoss = 42

takeProfit =11





Celgene Stands for Cancer

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

Corporation (NASDAQ: CELG) is a manufacturer of drug therapies for cancer and inflammatory disorders. The Company was founded in 1986 from a spin-out of the Celanese Corporation's merger with American Hoechst Corporation. 

Figure 1. History of Celgene

 

 

In 1998, the FDA approved Thalomid for the acute treatment of the cutaneous manifestations of moderate to severe erythema nodosum leprosum (ENL).  In 2005, Revlimid was approved by the FDA for or the treatment of patients with transfusion-dependent anemia due to low- or intermediate-1-risk myelodysplastic syndromes (MDS) associated with a deletion 5q cytogenetic abnormality with or without additional cytogenetic abnormalities (mouthful I know!).  The rest is history.  Revlimid is their flagship product, and if all goes well, should eclipse $5B/yr in revenue by 2015.

Figure 2.  ENL

Financials

Currently, at ~$57/share, the Company has a market cap of $26.6B and a trailing P/E of 30.  In their most recent conference call, the stock has been range bound for several years, with highs in the mid-$70s and lows in the $40s, so the stock is a trend trader's dream.  In their most recent conference call, the Company announced non-GAAP (Generally Accepted Accounting Principles) net income of $347.6 million, or non-GAAP diluted earnings per share of $0.73 for the quarter ended December 31, 2010. Non-GAAP net income for the fourth quarter of 2009 was $290.3 million or non-GAAP diluted earnings per share of $0.62. Based on U.S. GAAP, Celgene reported net income of $213.6 million, or diluted earnings per share of $0.45 for the quarter ended December 31, 2010. GAAP net income for the fourth quarter of 2009 was $254.2 million, or diluted earnings per share of $0.54.

"The 2010 record financial and operational results represent excellence in execution by all of our global teams," said Bob Hugin, Celgene's Chief Executive Officer. "This operating momentum, combined with our continued investment in R&D, positions us well for sustained growth in both the near and long term."

In mid-February 2011, the CELG announced that the Company's Board of Directors authorized the repurchase of up to an additional $1B common stock through December 2012.…
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CraigBot 1.0 week 1

In case you want to start at the begining, here are the posts leading up to this one.

Rage against the machines by building your own machine

CraigBot 1.0

Here are the results from running our Bot on the Demo account we set up, week 1.

To summarize we had 11 total trades with 6 winners and 5 loosers.  However, we finished the week down $1154.  I am going to spend the weekend analyzing the losers to see if we can figure out a way to have them cost us less money.  So, you guys take a look as well and lets see if we can come up with any modifications to implement over the weekend.  I look forward to reading your comments and ideas!





Craigbot 1.0

Ok guys, here is my first crack at the simplest forex trading bot I could come up with.  If you look at a chart of the EUR/USD you will notice that after every large drop there is a bounce.  So our goal for this bot is to recognize when we have had a large drop, then try to catch the bounce. Before you go any further you should go back and read my first article and make sure you have done the following things,

  1. Installed Meta Trader 4.
  2. You have signed up for a DEMO account from an ECN Broker.  ATCBrokers is the only one that I know of that will give a free demo account and is an ECN Broker, instead of one who makes their money off the spread.  If you find another, please let me know and I will post it here.
  3. You can successfully backtest any Expert Advisors that I post here.

Now that you have the environment set up Lets start to rock and roll.  In my opinion every Expert Advisor should be designed in pretty much the same way.  The first thing you have to is decide under what criteria to open a position.  Then you have to decide under what criteria to close a position.  You can get really fancy but everything pretty much boils down to those two decisions.  If you get those wrong then everything else you do doesn’t really matter. Now we have to decide how to open a position.  After some statistical analysis here is what I came up with.  We should Buy every time the EURUSD drops 41 pips, our order should have an 18 pip take profit and 42 pip stop loss.

The following is a link to what your start function should look like.

Start Function

Here is a summary of the results of backtesting from Jan 27 to March 23.  *WARNING* these are not live results.  These are the results of running this program on historical data.  But, since we can’t go back in time, this all we have got. Initial deposit: $5000

Total net profit: $6810 (after commision)

Ending Ballance: $11810

Here is the detailed report of the test.

I am going to to be running this on the DEMO account that I opened up and lets see if we are on to something.  If you would like to…
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Rage against the machines… by building your own machine!

This is intended to be an introduction to the world of robotic Forex trading.  By the end of this you should be able to construct a working automated Forex trading robot.  These automated trading bots are called Expert Advisors, EA’s for short.  I am going to assume that you don’t have much FX trading experience and walk you through the whole process of setting up your first EA.

Step 1.  Download and install MetaTrader4.  This is the platform our EA’s will run in.  Once MT4 is dowloaded go ahead and start it up.  Just click cancel on any dialogs that show up.  We are not going to hook it up to an account yet, we are just going to set it up so that you can play around and backtest your EA’s.  Once MT4 is up and running you should see something like the following screen.

(click for life size version)

Click Tools then History center (or hit F2).  Now we should be looking at this.

Expand Forex then EURUSD then click on M1 (the one minute candles).  Hit download.  This will download some of the historical data.  At this stage we need to download some additional data which will fill in the holes.  Here is a file which contains data for all of 2010, EURUSD1.  Now we need to import this data into our program.

To import this data click on the M1 data for the EURUSD just like in the previous step.  Hit import.  You should see the following screen.

If you dont see the candles in the import box then just close the history center and open it again.

At this point we are ready to build and backtest our first EA.

Step 2.  Building our first EA.…
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Biotech Junkies Update and Momenta Pharma Moving Forward

Reminder: Pharmboy is available to chat with Members, comments are found below each post.

February is now past, and the Biotech Porfolio is loaded with winners and a miss (PLX).  MRK is down a bit, but I expect that trade to recover, and one could be more agressive and double down on it, or play another round at the Jan13 $30 options for roughly the same price.  Below is the summary, and note the grey boxes are ones that did not fill.  I am still a fan of BMRN, and like DEPO as well.  Now let's look at a few others.

Table 1.  PSW Biotech Plays Since January 2011

 

Our newest play is Momenta Pharmaceuticals (MNTA), who is pursuing a three-part business model which includes complex generic equivalents in partnership with the Sandoz division of Novartis, proprietary compounds, and follow-on- biologics (FOB).  It seems that this company is tied up in competition/litigation with TEVA on several fronts.

Mid-last year, MNTA had a generic version of the blood thinner Lovenox which is manufactured and sold by Sandoz (the generic subsidiary of Novartis) approved by the FDA.  Currently, it is the only generic version on the market and Momenta earns 45% of the operating profit (~$300 million/year of the $1.1 billion/year sales).  If a second Lovenox hits the market, MNTA's royalties drop to 10%.  Well, a few weeks ago, TEVA received a 'deficiency letter' from the FDA but the market took this as a positive, and has hit the stock hard.  Unfortunately, the contents of the letter are unknown, and thus it is hard to gauge how long – if ever – TEVA might take to redress the problems.  This should provide some room for MNTA to continue its higher payout for Lovenox.

MNTA / Sandoz also have a pending ANDA (Abbreviated New Drug Application) for a generic version (M356) of Teva's multiple sclerosis drug Copaxone (glatiramer acetate injection; ~$3B in sales for 2010), which was accepted for review by the FDA on 7/11/08. The Generic Drug Division of the FDA does not issue decision date deadlines on ANDAs, and in addition, Sandoz is currently involved in litigation with TEVA over M356 as a generic equivalent.  To MNTA/NVS's delight, the U.S. Patent and Trademark Office issued U.S. Patent No. 7,884,187 entitled "Analysis of Amino…
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The Oxen Picks Weekly Report: A Possible Breather…Options to Short?

This coming week we have a number of important economic indicators and earnings that will help shed more light on unemployment, the manufacturing sector, and the housing industry. Many analysts and "buzz" seem to be saying this might be a week for profit taking, a nice breather, and a chance for investors to look for bargains to get into what is looking more and more like a long term bull market.

Mike Sheldon from RDM Financial Group said, "A majority of positive earnings news is behind us, so it wouldn’t be surprising at all, in fact it might be healthy for the market, to see a brief pullback to refresh and bring new investors back into the market."

My personal opinion is that the market is in a great position for shorting this week and picking up inverse ETFs. The market has been heavily overbought and overvalued. Almost every sector has jumped way too fast, and a healthy pullback is in order.  Technically, the market is way overvalued on RSI, nearing upper bands, overbought on stochastics, and all these indicators together point to the fact that just good news won’t be able to hold the market up this week, and mediocre news will be reason to sell.

Important Economic Indicators This Week:

  • Monday:  ISM Manufacturing Index, Construction Spending, Domestic Vehicle Sales
  • Tuesday: Core PCE Price Index, Personal Spending/Income, Pending Home Sales
  • Wednesday: Challenger Job Cuts, Nonfarm Employment Change, Factory Orders, Crude Inventories
  • Thursday: Initial Jobless Claims, Natural Gas Storage
  • Friday: Nonfarm Payrolls, Unemployment Rate

We are looking at some crucial market moving economic data this week. I think the sectors that will really be market leaders or draggers will be manufacturing, housing, REITs, and energy. I have been bearish on the housing market, as it is overvalued, and people are expecting way too much from it. The all important unemployment rate on Friday may not be as crucial as people think. I think people have priced in that expected 10% rate. If it is better than expected, the market could soar on Friday. And a worse than expected number may not cause a dramatic drop.

Important Earnings This Week:

  • Monday Pre-Market: Humana (HUM), Loews  (L), Marathon Oil (MRO), Tyson Foods (TSN)
  • Monday After-Hours:  Centex Corp. (CNX), Chesapeake Energy (CHK), Pulte Homes (PHM)
  • Tuesday Pre-Market: CVS Caremark (CVS), Simon Properties (SPG)
  • Tuesday After-Hours: Kraft Foods


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Zero Hedge

Johns Hopkins, Bristol-Myers Face $1 Billion Suit For Infecting Guatemalan Hookers With Syphilis 

Courtesy of ZeroHedge. View original post here.

A federal judge in Maryland said Johns Hopkins University, pharmaceutical company Bristol-Myers Squibb and the Rockefeller Foundation must face a $1 billion lawsuit over their roles in a top-secret program in the 1940s ran by the US government that injected hundreds of Guatemalans with syphilis, reported Reuters.

Several doctors from Hopkins an...



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Phil's Favorites

This Is The One Chart Every Trader Should Have "Taped To Their Screen"

Courtesy of Zero Hedge

After a year of tapering, the Fed’s balance sheet finally captured the market’s attention during the last three months of 2018.

By the start of the fourth quarter, the Fed had finished raising the caps on monthly roll-off of its balance sheet to the full $50bn per month (peaking at $30bn USTs, $20bn MBS, although on many months the (balance sheet) B/S does not actually shrink by this full amount which depends on the redemption schedule) and by end-Q4 markets also experienced some of the largest volatility and drawdowns in nearly a decade.

As Nomura&...



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ValueWalk

The Competition For Capital Has Made Stocks Cheap

By Michelle Jones. Originally published at ValueWalk.

The new year is upon us, and now is the time many investors look at what 2018 was and prepare for what 2019 might be. Recession jitters are starting to pick back up again, especially now that the full picture of 2018 is in the books. But what if you could pick only one theme for 2018? Jefferies strategist Sean Darby and team have a suggestion which is especially timely given that it appears to mark the end of an era.

StockSnap / PixabayVolatility carries into the new year

This past year was one of extremes, and the markets ended i...



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Kimble Charting Solutions

Stock declines did not break 9-year support, says Joe Friday

Courtesy of Chris Kimble.

We often hear “Stocks take an escalator up and an elevator down!” No doubt stocks did experience a swift decline from the September highs to the Christmas eve lows. Looks like the “elevator” part of the phrase came true as 2018 was coming to an end.

The first part of the “stocks take an escalator up” seems to still be in play as well despite the swift decline of late.

Joe Friday Just The Facts Ma’am- All of these indices hit long-term rising support on Christmas Eve at each (1), where support held and rallies have followed.

If you find long-term perspectives helpf...



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Digital Currencies

Transparency and privacy: Empowering people through blockchain

 

Transparency and privacy: Empowering people through blockchain

Blockchain technologies can empower people by allowing them more control over their user data. Shutterstock

Courtesy of Ajay Kumar Shrestha, University of Saskatchewan

Blockchain has already proven its huge influence on the financial world with its first application in the form of cryptocurrencies such as Bitcoin. It might not be long before its impact is felt everywhere.

Blockchain is a secure chain of digital records that exist on multiple computers simultaneously so no record can be erased or falsified. The...



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Insider Scoop

Cars.com Explores Strategic Alternatives, Analyst Sees Possible Sale Price Around $30 Per Share

Courtesy of Benzinga.

Related 44 Biggest Movers From Yesterday 38 Stocks Moving In Wednesday's Mid-Day Session ...

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Chart School

Weekly Market Recap Jan 13, 2019

Courtesy of Blain.

In last week’s recap we asked:  “Has the Fed solved all the market’s problems in 1 speech?”

Thus far the market says yes!  As Guns n Roses preached – all we need is a little “patience”.  Four up days followed by a nominal down day Friday had the market following it’s normal pattern the past nearly 30 years – jumping whenever the Federal Reserve hints (or essentially says outright) it is here for the markets.   And in case you missed it the prior Friday, Chairman Powell came back out Thursday to reiterate the news – so…so… so… patient!

Fed Chairman Jerome Powell reinforced that message Thursday during a discussion at the Economic Club of Washington where he said that the central bank will be “fle...



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Members' Corner

Why Trump Can't Learn

 

Bill Eddy (lawyer, therapist, author) predicted Trump's chaotic presidency based on his high-conflict personality, which was evident years ago. This post, written in 2017, references a prescient article Bill wrote before Trump even became president, 5 Reasons Trump Can’t Learn. ~ Ilene 

Why Trump Can’t Learn

Donald Trump by Gage Skidmore (...



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Biotech

Opening Pandora's Box: Gene editing and its consequences

Reminder: We are available to chat with Members, comments are found below each post.

 

Opening Pandora's Box: Gene editing and its consequences

Bacteriophage viruses infecting bacterial cells , Bacterial viruses. from www.shutterstock.com

Courtesy of John Bergeron, McGill University

Today, the scientific community is aghast at the prospect of gene editing to create “designer” humans. Gene editing may be of greater consequence than climate change, or even the consequences of unleashing the energy of the atom.

...

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Mapping The Market

Trump: "I Won't Be Here" When It Blows Up

By Jean-Luc

Maybe we should simply try him for treason right now:

Trump on Coming Debt Crisis: ‘I Won’t Be Here’ When It Blows Up

The president thinks the balancing of the nation’s books is going to, ultimately, be a future president’s problem.

By Asawin Suebsaeng and Lachlan Markay, Daily Beast

The friction came to a head in early 2017 when senior officials offered Trump charts and graphics laying out the numbers and showing a “hockey stick” spike in the nationa...



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OpTrader

Swing trading portfolio - week of September 11th, 2017

Reminder: OpTrader is available to chat with Members, comments are found below each post.

 

This post is for all our live virtual trade ideas and daily comments. Please click on "comments" below to follow our live discussion. All of our current  trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).

We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options. 

Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.

To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here ...



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Promotions

Free eBook - "My Top Strategies for 2017"

 

 

Here's a free ebook for you to check out! 

Phil has a chapter in a newly-released eBook that we think you’ll enjoy.

In My Top Strategies for 2017, Phil's chapter is Secret Santa’s Inflation Hedges for 2017.

This chapter isn’t about risk or leverage. Phil present a few smart, practical ideas you can use as a hedge against inflation as well as hedging strategies designed to assist you in staying ahead of the markets.

Some other great content in this free eBook includes:

 

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About Phil:

Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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About Ilene:

Ilene is editor and affiliate program coordinator for PSW. She manages the site market shadows, archives, more. Contact Ilene to learn about our affiliate and content sharing programs.

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