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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Phil's Favorites

Coronavirus: the blow to the Chinese economy could be felt for years

 

Coronavirus: the blow to the Chinese economy could be felt for years

Courtesy of Chusu He, Coventry University

Investors are still being fairly complacent about the novel coronavirus. After the number of new daily cases suddenly shot up to more than 15,000 on February 12 following more than a week of decline, there were some jitters in the markets. With Chinese authorities saying the increase was due to a decision to broaden the definition for diagnosing people, there were falls in the region of 1% in European markets, and smaller retrenchments in Asia and North America.

It is...



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Biotech & Health

Coronavirus: the blow to the Chinese economy could be felt for years

 

Coronavirus: the blow to the Chinese economy could be felt for years

Courtesy of Chusu He, Coventry University

Investors are still being fairly complacent about the novel coronavirus. After the number of new daily cases suddenly shot up to more than 15,000 on February 12 following more than a week of decline, there were some jitters in the markets. With Chinese authorities saying the increase was due to a decision to broaden the definition for diagnosing people, there were falls in the region of 1% in European markets, and smaller retrenchments in Asia and North America.

It is...



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Zero Hedge

China Adopts 'Cultural Revolution-Style' Social Controls To Crush Outbreak As Death Toll Nears 2,000

Courtesy of ZeroHedge View original post here.

Summary:

  • Taiwan reports 1st coronavirus death
  • Hubei reports 1,933 new cases, 100 deaths
  • Hubei health officials report 1,933 new cases, 100 new deaths
  • Taiwan taxi driver who died from virus carried passengers from mainland, Hong Kong, Macau
  • Singapore reports 3 more cases
  • Total cases aboard 'Diamond Princess' climbs to 355 as US prepares to evacuate citizens
  • Indonesia says 6 passengers from Westerdam cruise ship tested negative
  • There are now at least 68,500 cases worldwide, and at least 1,665 de...


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Members' Corner

How to Stop Bill Barr

 

How to Stop Bill Barr

We must remove this cancer on our democracy.

Courtesy of Greg Olear, at PREVAIL, author of Dirty Rubles: An Introduction to Trump/Russia

...



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The Technical Traders

Is The Technology Sector Setting Up For A Crash? Part I

Courtesy of Technical Traders

One thing that continues to amaze our research team is the total scale and scope of the Capital Shift which is taking place across the globe.  For almost 5+ years, foreign investors have been piling into the US stock market chasing the stronger US dollar and continued advancement of US share prices. It is almost like there is no other place on the planet that will allow investors to pool capital into such a variety of strong assets while protecting against foreign capital risks.  Yet the one big question remains – when will a price reversion event hit the US stock
market?

So many researchers, even our team of researchers, believe we have found the keys to unloc...



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Kimble Charting Solutions

Joe Friday Says Germany (DAX) Could Rally 30%, Happy Valentines Day For The Bulls!

Courtesy of Chris Kimble

German DAX Index “weekly” Chart

The German DAX is one of the more important global stock market indices, as it represents the largest economy / market in the Euro Zone.

So it would be a real treat for the bulls to see this stock market index breakout as we celebrate Valentine’s Day.

The facts, Ma’am. Just the facts; The German DAX looks to have formed a bullish ascending triangle over the past 3 years and it is currently attempting to breakout above the top at (1)....



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Insider Scoop

Nissan Shares Tumble To Decade Low After Q3 Earnings Miss

Courtesy of Benzinga

The shares of Nissan Motor Co. Ltd. (OTC: NSANY) dropped to a decade low on Thursday after the company missed third-quarter earnings estimates and significantly cut its annual forecast for the financial 2019 year.

What Happened

Nissan, on Thursday, reported a net loss o...



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ValueWalk

Russell 2000 Index (RUT) hits an almost one-month high

By Gorilla Trades. Originally published at ValueWalk.

Ad the Russell 2000 Index (INDEXRUSSELL: RUT) hit an almost one-month high today, commenting on today’s trading Gorilla Trades strategist Ken Berman said:

Q4 2019 hedge fund letters, conferences and more

Russell 2000 Index (INDEXRUSSELL: RUT) Outperforms Large-Cap Benchmarks

While the overnight session was nothing short of scary stocks held on to most of yesterday's gains and small-caps even extended their winning streak. The Russell 2000 Index (INDEXRUSSELL: RUT) hit an almost one-month high today, finishing higher for the fourth day in a row while outperforming the large-cap benchmarks, and since the Volatility...



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Chart School

Dow theory warning from the Utilities Index

Courtesy of Read the Ticker

Charles Dow died in 1902, and the investors should thank him for his ever lasting Dow Theory Analysis.

Carrying on this blog theme looking at the Utility stocks. Previous post.
Dow Jones Utility index could trade like the FANGs
Formula for when the Great Stock Market Rally ends



You can learn about Dow Theory here

This post is concerned wi...

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Digital Currencies

Bitcoin Price May Hit $27K All-Time High By Summer, Predicts Fundstrat's Tom Lee

Courtesy of ZeroHedge View original post here.

Authored by William Suberg via CoinTelegraph.com,

Bitcoin is primed for average gains of almost 200% over the next six months, one of its best-known supporters has told mainstream media. 

...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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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. Contact Ilene to learn about our affiliate and content sharing programs.