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Strrrrrretched Lower Yet
Alert - Narrow Range Day in McClellan* - Big Move Due
See: Awesome Story & Stock of the Day**
By Dr. John L. Faessel
ON THE MARKET
Commentary and Insights
Dr.Faessel@onthemar.com
Wednesday - 3/04/2009
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Quote of the day: Fed Boss Ben Bernanke said he doesn't think any big U.S. bank is a "Zombie Bank."
I remain of the opinion that we have a snapback rally brewing. Early S&P futures are up 12 points. Support is just below S&P 500 (SPX) 694. resistance is at 710 and 742 and 780 and 810. I think once a rally finally gets ignited it could carry us up to that 810 major resistance.
Yesterday the major stock market indexes fell to new Bear Market lows, but the rate of decline seems to be slowing. (Nasdaq 100 was up a tiny 0.37%) The (focus) Bank index (BKX) was off 1.64% closing at $22.24. It was off 6.42% on Monday and off 8% on Friday. The collapsing stock market has pushed sentiment and oversold indicators justifiably into panic readings. Overbought / oversold indicators (Arms and McClellan) remain deeply oversold. Contrary Indicators and longer term surveys of negative sentiment remain at close to all-time high fear levels. Shorter term sentiment measures are also indicating great fear.
* Yesterday's McClellan Oscillator (favorite overbought / oversold indictor), posted a deep minus and hugely oversold 297 after Monday’s minus and oversold 295. The two point difference in consecutive McClellan postings meet the requirements of a Narrow Range that in McClellan teachings has historically foretold big moves of 2% to 3 %. Usually this “big move” occurs within a couple of days and most often in the direction of the recent short-term trend; in this case it would be down. But the tea leaves are mixed as we are all ready enormously oversold, pegged at the bottom of the three-week channel, and the stochastics are at historic low postings with the fast at 1.73 and the slow at 4.59. I've never seen the stochastics in tandem this low before. Should mention again that there is an interesting configuration showing on the McClellan chart that shows a “higher low” set up. Previous looks such as this have been prophetic of major rallies in the making. Obviously a lower post below the extreme deep oversold low of minus 366 that was posted on February 23 would negate this "forewarning".
Yesterday's CBOE Total Exchange Volume Put / Call Ratio was 0.95; Monday's posting was a high fear level 1.07. The (VIX) (FEAR INDEX) closed at 50. Monday there was a interday high of 53, the highest tick /fear listing of the (VIX) since January 21.
** Awesome Story & Stock of the Day - EVEN IN THIS MARKET:
Sequenom Inc. (SQNM) $13.03 Nasdaq
Implications are staggering I believe. The (SQNM) story: In what could be a capture of their entire market (SQNM) has announced that its prenatal Down syndrome test was able to use maternal blood to correctly identify the 10 Down syndrome markers from the first 420 tested samples without any false positives.
Early last June I began mentioning the stock when it was $11 - it subsequently ran to a high of $29 in October (WHILE THE MARKET WAS CRASHING). It has since topped out and has comeback to good price support at around $13. Whether or not in this market the support will hold is unknown, but this is an incredible story and owning the stock with a close stop, say at the $12.25 point could be a terrific buy. Another strategy here would be to buy call options. Last Friday there was unusual volume of 40,000 contracts, all on the call side that came in on a single trade. In mid February insiders bought more than $170,000 of stock to add to their positions, led by Harry Stylli, CEO, who purchased 10,000 shares.
Current tests available can only identify 70% to 90% of samples with a false positive rate of up to 5%. In addition, (SQNM)’s test is non-invasive, using a sample of the mother's blood only. This avoids the risk of miscarriage, among other risks, in amniocentesis, where some of the amniotic fluid in the womb is withdrawn for testing.
(SQNM) has a market cap of only $792 million and a product that could be a must for every pregnancy on the planet.
(SQNM) is a genetics and molecular diagnostic company, based in San Diego, California. They provide genetic analysis products that translate genomic science into solutions for biomedical research, molecular medicine, noninvasive prenatal testing, and livestock and agricultural applications. Web Site: http://www.sequenom.com
Dr. John L. Faessel: Dr.Faessel@onthemar.com
Published at Investorideas.com Financial Article Feed : http://www.investorideas.com/RSS/feeds/II-Art.xml
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