Replies to post #1455 on Ariad Pharmaceuticals Inc fka ARIA

[lt56]

Up until today ARIA has been outperforming the market. Just as when it goes up ( and people say we're about to have good news the next day ) and when it goes down now we hear maybe there is bad news coming soon. Its all irrelivant. The only news coming is a pivital study on 534 commencing soon ( probably soon after labor day )and results on the Succeed trial ( for good or bad ) around the end of the year. The rest is all noise. Its a rough market and the games being played are never ending. Don't get crazy from 1 days trading, either up or down.

[bladerunner1717]

Bellweather,

The distress may not be "temporary." The macro environment, according to Dave Rosenberg of Gluskin/Sheff, is much worse than any of the pundits understand. Rosenberg argues that we are in something much more akin to a depression rather than a recession.

It may not be necesary to look any further than the macro environment to find a reason for the sell-off in small-cap bios.


"While the 200-day moving average on the S&P 500 has proven to be major resistance on the upside during the intermittent rallies, we clearly see that 1,040 is the line being drawn in the sand in terms of support on the downside. So the rally into yesterday’s close has been extended overnight with most European and Asian bourses in the green column to start out the day. But make no mistake, the uptrend line has been broken in this latest corrective phase and yesterday’s bounce, what do you know, was on lower volume — as was the case with most of these recovery sessions.

That said, our overall cautious economic and market views have not changed and we believe that a consensus view of 2.5% real U.S. GDP growth for the second half of the year will be marked down. At the same time, the process of unwinding overly optimistic earnings projections by Street analysts will continue for many months and that, along with reduced corporate guidance, will keep the overall downward path in equity market valuation intact. While forecasts have been trimmed since the market peaked in April, there seems little doubt that double-digit growth in corporate earnings is not going to be attained in the coming year and yet that is still the expectation being embedded in stock prices. When the analysts stop cutting their numbers, it will be safer to dip your toes back into the market, which is still likely several months away.


In a nutshell, we have more evidence now than we did back in 2008 that we are in a secular credit contraction, a deflationary backdrop and a liquidity trap. After all the monetary, fiscal and bailout stimulus, the economy should be roaring ahead, as would be the case if the economy were coming out of a normal garden-variety recession. The fact that there has been no sustained response to all these efforts by the government to turn things around is testament to the view that this is not actually a traditional recession at all, but something closely resembling a depression. That, my friends, is exactly what the Treasury market is signalling. The last time that bond yields were rallying to the levels they are at today, core inflation was running at 1.8% (versus 0.9% now) and the unemployment rate was sitting at 7.4% (versus 9.5% today). So, the output gap and the deflation backdrop are actually offering much more fertile soil for the bond market today than was the case back then. Those are facts, by the way, not mere opinions."


The next couple of months could be brutal. Bernanke is running out of arrows in his quiver. Barring any positive news on a particular stock, small-caps could be in for a very rough ride.


Bladerunner