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DENDREON’S 70% PORK OVER BY THE NASD

Alexander P Morris — Tue, 28 Apr 2009 23:27:09 +0000

Here’s to another great oversight job by the SEC and the NASD. For anyone who caught any of the trading in Dendreon today (NASD:DNDN), this is exactly the type of situation that can be the death of you as a trader. Once you see it unfolding, the best thing you can do is STAY THE HELL AWAY. For those of you who missed all the “fun”, basically DNDN tanked nearly 70% in a bit over two minutes from 1:25pm to 1:27pm down to around $7.75 and was halted a few minutes later. Trading did not resume until 6:15pm when the stock reopened at about $24 per share and traded as high as $27.65 within minutes before pulling back a bit. You think maybe a few people got caught in the early fun and games that took place by some market-manipulating private trading elite? I’d bet on it…

The Nasdaq Stock Market said it was investigating two minutes worth of transactions in Dendreon Corp because they may have resulted from a brokerage error. Transactions executed between 1:25pm and 1:27pm were under review, the New York-based exchange said in an e-mailed statement. Anyone who made any trades in DNDN during that time were now panicking due to the trading halt, since they have no clue what their position would be by the time it’s all over (as the stock may gap huge and/or the trades may be broken). In such a case, if it was really some massive broker error or some other strange sheistery, the proper way to handle it would have been to BREAK EVERY TRANSACTION right up to the time just before the debacle began. But, that would of course mean that those politically-connected friends of the NASD who made a fortune from this mess (you know, like Bernie Madoff until he went just a wee bit too far) would have to give it all back, and that’s just NOT PLAYING FAIR!

So, the Nasdaq Stock Market announced that it would let stand those hairy two minutes worth of transactions in Dendreon that it initially suspected were the result of a brokerage error! Nasdaq announced its decision in an e-mailed statement at 3:06pm. The statement also asserted that the ruling “cannot be appealed”. Of course not… then their pals couldn’t have booked their 100%+ of porkified profits once DNDN reopened for trading later in the day!

Getting caught in something like this is a trader’s worst nightmare, and my heart goes out to any trader who may have been sideswiped and reamed in the rear by the elite powers that be.

What can be learned from this? Trading is war, and you’re on your own. Your only protection is that you’re always in control of your position size. Remember the importance of discipline, and always consider worst-case scenarios when managing risk. Speaking of which, anyone else notice some of the “Swine Flu” stocks may be attempting to build new higher bases today (ie. NVAX, BCRX)?

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MAKE SOME PORK FROM THE SWINE FLU OUTBREAK!

Alexander P Morris — Sun, 26 Apr 2009 23:52:21 +0000

Another year, and another pandemic-potential flu virus outbreak. This year’s hoopla is over the swine influenza (H1N1) virus (swine flu) outbreaks in pigs which has also traversed to humans. Granted, this is frightening stuff. Perhaps what’s more frightening about this outbreak than other recent avian flu outbreaks is that not only are these closer to home, but that there have already been confirmed cases in humans from California to New York City. The outbreak seems to have spread from Mexico outward, as eight students at a New York Catholic high school that contracted swine flu had been to Mexico over spring break just two weeks ago.

Grounding ourselves back to reality, with so many protective measures now being taken, it’s likely that this outbreak will eventually fizzle out like those in previous years. Already many of the students are recovering, and with the heightening level of awareness people will be extra cautious. For those who want extra protection, I’ve heard that Sambucol (black elderberry extract) may be helpful in warding off flu virus attacks.

In the meantime, with all the hype around this outbreak (#swineflu is the top tweeted phrase on Twitter today!) is there some way to Pass Me The Pork on this crazy PIG FLU?!

Already Friday, several of the top flu vaccine “penny stocks” began moving sharply higher, and there’s likely more potential opportunity for greater moves higher on Monday. The current leader is NASD:NVAX (Novavax, Inc.), already up 75% on Friday alone. Scientists at Novavax have successfully developed the first multi-strain flu vaccine, though it may not be FDA approved in time to help with the current flu outbreak. As these stocks will already likely gap even higher pre-market Monday morning, you better watch the price action closely, don’t chase, and consider scaling in as higher bases form. If it’s too wild, stay away and wait until they calm down.

Some of these stocks may also turn out to be great shorts later this week. For disclosure purposes, I already managed to pick up some shares in a few of these stocks on Friday so I already have a nice little cushion, and will watch closely Monday for the opportunity to add more (or begin unloading if one of these stocks just goes completely berserk). But remember… Don’t stick around too long, hit and run baby! Well, enough rambling…

Here’s the list of stocks to consider (NVAX – Novavax, BCRX – Biocryst, GNBT – Generex, SVA – Sinovax, and MYL – Mylan/Roche/Tamiflu/oseltamivir). From the charts and data below, you’ll also notice a few of them have built up a significant short interest for some seriously whopping short-squeeze potential. Do your due diligence, don’t blink, and you just may be able to turn these pigs into some of your own PORK!

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