Are we there yet?

Are we there yet?

The DJIA has dropped 2700 points from my September 10 Crash Warning;

It has dropped 2400 points from Into The Abyss;

It fell 2000 points from Wave 3 of 3 of 3 Down;

And 1400 points in the four trading days since Sunday Night Observations.

What now?

The market has fallen about 25% since all these blogs of mine started, about the same percentage as the "Crash" of 1987. Enough to qualify as a Crash?

Yes, by past standards. But this time it's different.

In Elliott Wave terms, this bear market is a generation higher, one larger fractal higher then the 1987 crash. As such, we should expect this crash to be commensurately larger.

How large?

Don't know. But by the way the market has so effortlessly rejected rallies on the way down, especially this week, I am guessing we have further to go then anyone imagines. That doesn't mean there won't be rallies before the final washout lows are seen. But human psychology being what it is, I suspect those final washout lows will occur at about the time that no one cares anymore.

Not much of a road map. But probably better then all those archaic sentiment readings and oversold oscillators left over from the bull markets from whence they came. This time IS different and a new way of looking at the stock market is being born of these miserable times.

Miserable, that is, only if you are Long.

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Point of Recognition?

There is an article from the Elliott Wave International brain trust, entitled,

Have You Reached the "Point of Recognition"?

just to the right of this blog. It provides a good road map as to where the market is right now, where it came from and most importantly, where the market is probably going in the days and weeks ahead. Highly recommended reading.

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Nanoviricides

Nanoviricides market cap has taken a beating in the past few days due to the global equities bear market and a temporary and apparently innocuous "E" added to the end of the symbol. The Company put out a press release today, saying in relevant part:

The “E” reflects that the Company has not yet filed its Form 10-KSB, annual report to shareholders. The Company’s symbol will return to NNVC.OB once the Form 10-KSB is filed. The Company anticipates it will file our annual report within the time provided and expects there to be no significant change in its financial statements.Commenting on this event, Eugene Seymour, MD, MPH, the Company’s Chief Executive Officer, stated “We want to assure our stockholders that nothing about the Company has changed. We remain committed to both our mission and our science and we will rectify this issue within ten days.

Following recently disclosed successful financing, we are now busy scheduling the follow-on studies against HIV as well as adenoviral EKC. We have received significant interest from several major pharmaceutical companies, as well as governmental and non-profit institutions for nanoviricides development against these diseases,” he further added.

“We are now gathering significant and valuable input for these studies from important stakeholders interested in furthering development of highly effective drugs against these major diseases,” said Anil R. Diwan, PhD, President of the Company.

As for me, I've been buying NNVC under $1.00 and now under $0.75, adding to my positions. This is a rare opportunity to buy a stock on the cusp of significant company developments with global health ramifications. We have been given hints of substantial HIV progress that has yet to hit the media, but make no mistake, once it does, available shares will dry up as this stock will be bid up above previous all time highs.

We can only play probabilities in this game and the probabilities are on the side of a once in an investing lifetime buying opportunity with this stock.

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Sunday Night Observations

It's Sunday night and I've just gone through my charts.  My bearish stance of stocks remains in tact, I see no reason not to expect further downside volatility this coming week.  In fact the Globex Futures Market is showing the S&P down 20 points, indicating a very weak opening on Monday.

Gold in tonight's spot market  is down about $4.00.  That doesn't sound like much, until you take into consideration the S&P's being so sharply off tonight.  The case for gold has a lot to do with the collapse of global financial markets.  But if it is indeed a deflationary depression that is asserting itself, gold is destined to decrease in value like every other asset class.  What are the signs to look for?  Gold not appreciating in line with global stocks depreciating, as in tonight's numbers.  

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And now for something completely different

Above pattern is a traditional Elliott Wave pattern. Elliott Waves are fractals, so that this pattern is constant whether on a daily, weekly, 60-minute or 1-minute chart. Assume for the purposes of this example that the above is a general sketch of a weekly DJIA chart, starting in the lower left corner with a Wave 1 that commenced at the bottom of the last bear market, circa 2002. My suggestion is that we are currently just past the "B" which was the High made in the Fall of 2007. Today's market is about 1/4 of the way from B to C.


This is basically the same chart as above, only the waves 3 and 4 on the left and waves A and B on the right are subdivided. This chart is important to point out that even if the bigger wave is moving in one direction, the sub-divisions of that bigger wave include contra-trend moves. So for example, even though the movement from A to B on the right is in the UP direction, there was a smaller wave, a to b that was down.



This is my crude hand made DJIA weekly chart showing a completed 5 waves up from the lows on the lower left hand corner of the chart to the multi-year Top in the Fall of 2007, i.e. Wave 5 of 5 of 5. From that Top I've labeled Waves A (down) and B (up) and the beginning of Wave C (down, down, down) via a series of waves 1 and 2. Thus my current analysis is that the market is a Wave 3 down. (Wave 3 of 3 of 3, referenced in a previous blog, refers to the internal subdivision within Wave 3). I have no idea if my count is an accurate portrayal of orthodox Elliott, but it does coincide with both my view of the markets and the upper two charts of orthodox Elliott Waves.

This DJIA chart shows the beginning of the drop of wave "C" portrayed in the top two charts. I estimate that the market is about 1/4 of the way from B to C. This also implies that the most powerful part of the drop from B to C still lays ahead of us. C-Wave analysis projects a series of precipitous downward moves in the DJIA, interrupted by sharp but short rallies against the major trend, all of which are followed by steep drops to new lows.

At the end of Wave C, expect one hell of a rally.

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Wave 3 of 3 of 3 Down?

Interim Update: I've been looking at charts all morning and the same pattern is emerging: all major equity indexes may very well be in Waves 3 of 3 of 3 Down. Now I do not have time during trading hours to explain, but anyone who read Robert Prechter's Elliott Wave Principle will understand what I am getting at here.

If indeed this is what is happening, then it is a rare trading opportunity on the downside.

Nothing in trading is a certainty, we can only measure probabilities and act accordingly. The probabilities of a DJI move to 7000-9000 before year's end are growing.


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Navigating the Q’s

First I would like to express a Happy New Year to all of my Jewish friends, including my brother and his family, my daughters, my cousins, aunts and uncles and let's not forget my parents, who reading ahead to the next paragraph, are now rolling over in their graves.

I used to be Jewish. But I dropped some window pane acid while a student at Michigan and ever since, whenever I go to the Synagogue, ("Temple" for you heathens), everyone just stares at me. I think they are watching to see if I take any of those books stored on the back of seats into the bathroom with me. Geez, all it took was one time to discover that there are no photos in those books! What are they all staring at, anyway?

On to today's post, it's linked below, a Guest Blog posted at Market Club:

Navigating the Q's


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CRASH WARNING - Update

We made it.

Beleaguered and weary, from the abyss of the crash, a shrill cracking voice wonders aloud, "BOOYAH, Jim, have we suffered enough, or are there further horrors awaiting us in the treacherous days that lay ahead?"

From up high comes a deep baritone reply: "Who knows what evil lurks in the heart of men?"

Let's use the Daily Triangles for an exit on this trade.

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PS: I'll have a new tutorial on trading the Q posted at Market Club in the next few days. I'll alert all when it appears.

NanoViricides - Fireside Chat, Part II

As promised, here is Part II of Fireside Chats with Dr. Eugene Seymour, MD, CEO of NanoViricides. I want to thank Dr. Seymour for his open and candid responsiveness to my questions and his cooperation in getting this information out to the public through the auspices of this blog.

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About NanoViricides: NanoViricides, Inc. (www.nanoviricides.com) is a development stage company that is creating special purpose nanomaterials for viral therapy. The Company's novel nanoviricide™ class of drug candidates are designed to specifically attack enveloped virus particles and to dismantle them. The Company is developing drugs against a number of viral diseases including H5N1 bird flu, seasonal influenza, HIV, EKC/herpes (epidemic kerato-conjunctivitis or severe pink eye disease), hepatitis C, rabies, dengue fever, and Ebola virus, among others. This interview contains forward-looking statements that reflect the Company's current expectation regarding future events. Forward-looking statements involve risks and uncertainties. Actual events could differ materially and substantially from those projected herein and depend on a number of factors. Certain statements in this release, and other written or oral statements made by NanoViricides, Inc. are “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward looking statements are subject to known and unknown risks, uncertainties and other factors that may cause actual results, performance, or achievements of the company to be different from those expressed or implied including the success of the Company's research and development efforts, the availability of adequate financing, the successful and timely completion of clinical studies and the uncertainties related to the regulatory process, described in the “Management’s Discussion and Analysis” section of the Company’s Form 10-KSB and other reports and filings with the Securities and Exchange Commission.


Allan: Would you outline the Company’s priorities for the next 12-24 months and what will the competitive landscape be during that time?

Dr. Seymour:

Priorities/Material developments. While we can give no assurance that any of these developments will occur, the Company’s priorities are to:

1) Develop a small-scale prototype pilot production unit within our existing facility. The data from this unit will be given to our production partner to dramatically ramp up production capacity under GMP (good manufacturing practices) conditions (required for Phase II human efficacy trials but not for Phase I human safety trials).

2) Conclude at least one partnership deal for each of the drugs that we would initially like to take to market (this includes the veterinary).


3) Current thinking is that HIV, H5N1, H1N1, rabies and EKC/Herpes of the eye in humans and animals (cats, dogs and horses) will be our initial major focus although this may change depending on the demands of the market. In my estimation, HIV, H1N1 and the eye markets in total are billion dollar plus markets while the rabies drug market is in the range of $300-$500M.


Competitive Landscape

We are aware of no other company operating in the anti-viral field that has the ability to destroy the target virus. Our technology is the result of 15 years of development done by Dr. Diwan.

While H5N1 (Influenza A) has faded from the public consciousness, the virus or its successor mutations continue to represent a threat. An article from the Cornell University newspaper summarizes the current situation. While the article states that no vaccine will work and no one will be immune, it fails to mention that the current treatments will be largely ineffective for two reasons. First, the virus rapidly develops resistance to the drug and secondly, since the virus continues to rapidly mutate, the drugs lose their effectiveness. We do not expect either of these two factors to be operative with our compounds because if the virus mutates away from the attachment mechanism, it also will lose the ability to attach to a cell, thereby rendering the virus ineffective. Essentially, we are currently completely unprotected against the risk of a pandemic.



Allan: What do you say to shareholders who see all the potential of the Company and the prospects for the application of the Company’s products globally but who seek immediate returns on their investment?

Dr. Seymour:

I would ask them to look carefully at their overall investment strategy and consider the risk/reward profile of biotech investing. Biotech investing is not for the faint of heart. I feel that we have a large group of committed investors who are holding their stock, awaiting the consummation of a major event. I will do everything I can to not disappoint them.

Lastly, a word about the studies. I quite frequently get asked why studies take so long to both start and end. Most people don’t realize that the time from the signing of the initial contracts to the actual start of the study can range anywhere from 3 months to 12 months. A notable exception was the HIV study done earlier this year in Boston. In that instance, we had started on the contractual talks months before we even planned to begin. When I saw that the second HIV vaccine trial had failed, I asked our researcher how soon he could start. From the time we gave him the go-ahead to the time he started was 72 hours. This was because the virus was on hand, the BSL-3 laboratory was available, research animals were available, he was able to pull together staff quite quickly and all the contracts had been signed and the committee approvals were in hand. Fortunately, all of the initial legwork had been done!

Some last minute thoughts:

In my mind the HIV results reported over the summer were extremely significant. We have met with the government agency that’s intimately involved with HIV. We are working with them to redesign the protocol for a repeat study that looks more carefully at both virus in the circulation as well as residual virus hidden within the immune system cells. There were some very interesting findings in those areas that must be confirmed before being reported. Our plan is to have the new protocol designed by the end of October. This timetable is predicated upon coordinating the schedules of at least five different scientists, both in our Company and at the government agency. The repeat HIV study should then start after that.

The veterinary market appears to be a potential source of more immediate commercial income. Herpetic keratitis, a herpes infection of the eye in animals is thought to be a very large market. The barriers to entry are much lower than those of the human market. Look at this website of the FDA. We are now investigating what additional safety studies are necessary in order to apply for “conditional approval” in the animal anti-keratitis eye drug market. If this approval is received, we then have 5 years to prove efficacy.

http://www.fda.gov/cvm/minortoc.htm

Into the Abyss

As I sit here watching Democrats and Republicans fumble-snipe at each others heels while the world awaits a resolution of the proposed $700B infusion to stall-off Armageddon, I am reminded of the 1960's television series, "The Twilight Zone." Can this really be happening? Is the fate of mankind riding on Barney Frank?

While attending law school in Boston in the mid-1970's, a group of us law students from Suffolk, BU and BC used to gather Sunday mornings on a ballfield on Comm Ave for pick-up softball games. A rolly-polly brother of one of our regulars, Barney Frank was then a struggling state representative that couldn't field nor hit, but our object wasn't to qualify for the Olympics, but to assemble enough bodies to field two teams, so Barney, gay as he might have been, was as welcome as any of us. To think that Western Civilization now rests in his chubby-clumsy little hands, gives your author great pause. Oh my, oh my, oh my.

The image of Henry Paulson and Ben Bernanke squirming and begging before Congressional committees, of seven minutes of glory per pandering politician to squeeze contrition out of these two pillars of capitalism, enough to make a grown man vomit, followed by the follies of Kudlow, Cramer, & CNBC knick-knacks chillin' and spillin' their guts out of their new found celebrity, all the while pumpin' and dumpin' to stay tuned for the next segment where the world may end, or be saved, or some combination thereof, television docu-drama at its finest and at it's worse, all at once, oh my, oh my, oh my.

What to do with all of this hubris, the suits on high horses, the calvary of great expectations charging across the valley of the doomed investors, bugles blowing and flags a waving as limousines pull up with Obama and McCain engaged in a two-step in center ring, while donkeys and elephants jump through rings on fire; this is what we have come to see, the circus is in town and we gather beneath the tents, it's going to be a humdinger of a show, oh my, oh my, oh my.

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