Here is one thought. Some institutions cannot hold stock below $5. You may see some institutions exiting their positions in anticipation of that possibility, thereby driving the price down and maybe making below $5 a self-fulfilling prophecy.
If short interest has risen, and the shorts opened their positions at lower price levels, then it will be easier to catch them in a squeeze. Now that the market is in recovery mode, AERI is going up nicely. The recent drop was due to the market turmoil and the collapse in biotech, no due to any conspiracy or anything specific to AERI.
Part of the recent drop may have been a pullback relative to the big pop we had to 22, but AERI was over 22 only for about an hour or so on June 19. It was not a sustained price level; it was a blip. Acting like that was "the price" by which to measure things is ridiculous. Consequently, measuring the downtrend from that blip is absurd.
After that brief move to 22, AERI hovered between the 17s and the 19s, which was still a considerable gain from the 12s and 13s that it had been at before the announcement in mid-June. Consequently, somewhere between the 17s and 19s is a reasonable level to which to expect AERI to return, barring any other other announcements.
Such sudden moves are not uncommon with leveraged Etfs, whether long or short.
However, because of the daily re-balancing on such ETFs, there is a downward trend long term that can counter (or amplify, depending on the direction) the effect of the movement of the underlying index. This effect of re-balancing is known as "decay". Such ETFs are intended as trading vehicles, not long term investments (with rare exceptions).
There have been rare instances where trends in the ETF hold over longer periods, but this requires a powerful long-term trend in the underlying instrument that the ETF follows. This was true in the case of FAS and TNA, for example, over the past couple of years because of the effects of Quantitative Easing. But they were also extremely volatile.
To better understand how these types of ETFs work, and in particular the risk of decay, do a Google search on "leveraged ETF decay".
One article on Seeking Alpha covers the basics "What You Need To Know About The Decay Of Leveraged ETFs", but read from enough different sources to satisfy your curiosity. People's views on the effect of decay can be contentious.
1) This ETF follow the Chinese Index in 3x reverse for a single day at a time. It is re-balanced at the start of every day. Therefore, you cannot expect trends to follow through from prior days if things have significantly changed. In addition, like all market instruments, it is forward-looking. What happened the day before may have some effect, but the question on everyone's mind is always "What will happen tomorrow, especially if things change?"
2) It is red in pre-market because China cut interest rates and reduced reserve ratios. This is an example of a big change.
Yes, Tom McClellan author of the McClellan Market Report has predicted a crash starting Thursday. His parents were the inventors of the McClellan Oscillator and the McClellan Summation Index, which are prominent technical market timing indicators. I did not see many specifics in the reports that I saw reporting his prediction. I am sure he wants you to buy his newsletter to get the details.
I saw that with IDTI as well, but I held off. One commenter on the IDTI board,faulmp1966, has expressed concerns about the product mix. "The market has figured out IDT...they are behind on wireless power...Broadcom is eating their lunch...and SRIO IP accounted for a very large portion of IDT's revenue...those customers that utilize SRIO are wireless backhaul companies and they are moving from SRIO to ethernet design methodology...IDT has no answer. I would be cautious with loading up...My opinion obviously."
I've made good money on IDTI in the past, though I sold out last week at 20.16 on Aug 10, and have been looking to get back in. I need to dig in and see better for myself what is going on.
At the time I posted (at about 5:45PM), Yahoo said 15.37. It now says 15.37 when I bring it up and then flipss to 15.58 while I look at the screen. Fidelity still says 15.37. Google Finance still says 15.37. The NASDAQ site still says 15.37.
Check your sources again, agamemnus_0, it closed at 15.37.
On what basis must the trade be reversed? "I made a mistake" is not a valid reason.
Another possibility is to go after GoPro's suppliers, such as AMBA. However, AMBA is volatile, and was recently the target of a short attack by Citron, from which it has mostly recovered. By a number of metrics, AMBA could be viewed as overpriced (a view which underlies Citron's thesis), but many others argue for continued growth in its niche markets. Balance sheet is strong and has been continually improving, no long term debt. I've made some money on AMBA, though I do not currently hold a position, but I am looking to buy on any dips.
Current quote from Fidelity as of 3:1PM
USD Keryx Biopharmaceuticals Inc
Last [Tick] $7.505[-]
Change Up $0.165
% Change Up2.25%
Bid [Tick] $7.50
Bid Size 102
Ask Size 12
Day High $7.56
Day Low $6.57
Previous Close $7.34
Prev. Close Date 08/04/2015
I'm wondering the same. No news, and today it is dropping like a rock on top of previous declines. Is this a buying opportunity, or a harbinger of more declines to come?
This is the third day after the major attack on the price started. Folks that got stopped out, but who still believe in the company, would have to wait three days for settled funds if they have a cash account. Some of those folks might choose to get back in, which would create buying pressure.
I'm not saying that that is necessarily the reason, but I have seen similar patterns in the past with a number of stocks. Under such a scenario, today's price move would not be "just a bounce", it would be reflective of strategic buying on the part on those folks to get back in at a lower price than they were stopped out at.
Time will tell. Things are obviously still very volatile. In addition, I am seeing some similarly strong moves on other biotech/pharma issues that were recently crushed in the same time frame, such as ARIA, HALO, HZNP, SNSS and others.