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

Brexit Hits Peak Absurdity And Bill Blain Explains It All

Courtesy of ZeroHedge. View original post here.

Blain's Morning Porridge, submitted by Bill Blain

"I have not failed, I’ve just found another way that doesn’t work..."

For Non-British readers who are perhaps unfamiliar with the complexities of British Parliamentary procedure and don’t understand the latest confubbelings of the Brexit Debate – let me try to explain in a concise and clear manner the latest moves in this complex and fascinating game of going absolutely nowhere. We do hope you ar...



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Kimble Charting Solutions

Financials About To Let Down The Bull Market Again?

Courtesy of Chris Kimble.

If the saying So Goes The Banks, So Goes The Broad Market is true, what message are we receiving when financials have lagged the broad market for over a year?

This 2-pack looks at the XLF/SPX and EUFN/XLF ratios over the past couple of years.

The XLF/SPX ratio has created a series of lower highs for the past 12-months after peaking at (1). The EUFN/XLF ratio has created a series of lower highs for the past 18-months after peaking at (2). These falling trends look to be sending a negative divergence message to the broad markets if one believes that banks are important for bull markets.

Each ratio is near falling resistance at ...



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Phil's Favorites

Brexit may usher in point of no return for UK tech start-up scene

 

Brexit may usher in point of no return for UK tech start-up scene

Other European cities have been quick to sense opportunities from Brexit. Charles Hawley/Twitter

Courtesy of Martin De Saulles, University of Brighton

Sifting through the noise to really understand what impact Brexit and all the uncertainty that it brings is having on the UK’s technology start-up scene, it’s possible to see a picture emerging. It is one that should cause serious concern for anyone with an interest in keeping the UK at the centre of Europe’s technology sector.

In The Sun Also ...



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Chart School

Weekly Market Recap Mar 17, 2019

Courtesy of Blain.

A very good week for market bulls as the prior week’s selling was all reversed.  Last week we asked how many times can we rally on the same Federal Reserve juice.  It seems indefinitely.  Jerome Powell went on ’60 Minutes’ and talked dovish – that sparked a big rally Monday and it continued all week.  The only down day all week was Thursday when the progress on the U.S. – China trade deal seemed to hit a delay.

A meeting between President Donald Trump and Chinese President Xi Jinping will be delayed until at least April, Bloomberg News reported, indicating that a bilateral trade deal will n...



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ValueWalk

Pension Flows Add 5 More Years To Credit Boom/Bust Cycle

By Michelle Jones. Originally published at ValueWalk.

The pension crisis has been capturing headlines for years, but there’s another layer to the pension issue that’s starting to draw attention to itself. Public pension funds have shown an increasing appetite for credit and related holdings, the latest round of pension flows demonstrates that this trend continues One analyst believes pensions are largely to blame for the extremes of the boom/ bust cycles we’ve seen over the last year or so. He now suggests that the equity bull market could last another five years—thanks to the extremes driven by pension funds.

...

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Insider Scoop

Needham: Facebook No Longer A Buy Amid A 'Negative Network Effect'

Courtesy of Benzinga.

The bullish case for Facebook, Inc. (NASDAQ: FB)'s stock has come to an end, according to Needham.

The Analyst

Needham's Laura Martin downgraded Facebook from Buy to Hold with no price target.

The Thesis

Needham's multi-year bullish stance on Facebook's stock can no longer be justified for three key reasons, Martin said in a research report. These include:

  1. A negative potent...


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Biotech

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

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

 

Marijuana is a lot more than just THC - a pharmacologist looks at the untapped healing compounds

Assorted cannabis bud strains. Roxana Gonzalez/Shutterstock.com

Courtesy of James David Adams, University of Southern California

Medical marijuana is legal in 33 states as of November 2018. Yet the federal government still insists marijuana has no legal u...



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Digital Currencies

Facebook's cryptocurrency: a financial expert breaks it down

 

Facebook's cryptocurrency: a financial expert breaks it down

Grejak/Shutterstock

Courtesy of Alistair Milne, Loughborough University

Facebook is reportedly preparing to launch its own version of Bitcoin, for use in its messaging applications, WhatsApp, Messenger and Instagram. Could this “Facecoin” be the long-awaited breakthrough by a global technology giant into the lucrative market for retail financial services? Or will...



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Members' Corner

Despacito - How to Make Money the Old-Fashioned Way - SLOWLY!

Are you ready to retire?  

For most people, the purpose of investing is to build up enough wealth to allow you to retire.  In general, that's usually enough money to reliably generate a year's worth of your average income, each year into your retirement so that that, plus you Social Security, should be enough to pay your bills without having to draw down on your principle.

Unfortunately, as the last decade has shown us, we can't count on bonds to pay us more than 3% and the average return from the stock market over the past 20 years has been erratic - to say the least - with 4 negative years (2000, 2001, 2002 and 2008) and 14 positives, though mostly in the 10% range on the positives.  A string of losses like we had from 2000-02 could easily wipe out a decades worth of gains.

Still, the stock market has been better over the last 10 (7%) an...



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Mapping The Market

It's Not Capitalism, it's Crony Capitalism

A good start from :

It's Not Capitalism, it's Crony Capitalism

Excerpt:

The threat to America is this: we have abandoned our core philosophy. Our first principle of this nation as a meritocracy, a free-market economy, where competition drives economic decision-making. In its place, we have allowed a malignancy to fester, a virulent pus-filled bastardized form of economics so corrosive in nature, so dangerously pestilent, that it presents an extinction-level threat to America – both the actual nation and the “idea” of America.

This all-encompassing mutant corruption saps men’s souls, crushes opportunities, and destroys economic mobility. Its a Smash & Grab system of ill-gotten re...



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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:

 

·       How 2017 Will Affect Oil, the US Dollar and the European Union

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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.

Market Shadows >>