Graycell Advisors

Hello!

Market updates are typically not planned during the month. However, the sharp volatility in stocks, unmatched this year, is requiring an adjustment to the model portfolio during the month itself. 

While there was a combination of multiple reasons that contributed to the decline, the catalyst was the sharp spike in bond yields following comments from the Federal Reserve Chairman. The ferocity of the decline was unmatched in recent memory and probably sheds light on how the nature of the market is transforming as trading and portfolio balancing become even more algorithmic-driven. The post A Federal Reserve Jolt discusses the bank comments and its implications.  

The intensity of the selloff can be gauged by the fact that the Nasdaq and the Russell 2000 indexes at their lows declined -10% thus far in October.

At this time the stock market is so much oversold that one can reasonably expect a sharp move higher on some days. However, the near-term market uptrend is broken and it will require a period of healing over the next few weeks. It is exciting to bottom-fish and be buyers, especially for short-term traders, as one has much to choose from after the sharp sell-off. But the risks are high that volatility has not seen its final days in this episode, and we will witness some sharp moves down as well.

Strong earnings and guidance can be the most important soothing balm that can contribute to a faster healing and recovery. It is important to note that the positive long-term fundamentals and the overall bull-market still remain intact at this time.

In our October 10 email update, also available in the Members Area, the model portfolio exposure was reduced to 50% or 5 positions. This level is being reduced by 1 position. The position being closed is:

SLDB - Solid Biosciences

The model portfolio will now hold 4 positions and be 40% invested. The next reassessment will now occur most likely at the customary end of the month period.

For any questions, kindly contact us at support@PrudentBiotech.com or use the Contact form.

Sincerely,
Graycell Advisors

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Graycell Advisors, and its affiliates, officers, employees, families, and all other related parties, collectively referred to as ‘Graycell’ and/or ‘we,’ is a publisher of financial information, such as the Prudent Biotech and Smallcap newsletters. Historical performance figures provided are hypothetical and unaudited, and based on our proprietary analysis and system performance, back-tested over an extended period of time. The performance results obtained are intended for illustrative purposes only. Past performance is not indicative of future results, which may vary. All stock and related investments have a degree of risk, which can result in a significant or total loss. In addition, smallcap segment is characterized by much higher risk and volatility than the general stock market. The Information contained herein does not constitute a personal recommendation or takes into account the particular investment objectives, financial situations, or needs of individual investors. If you decide to invest in any of the stocks of the companies mentioned in the newsletters, samples, alerts, etc., sent to you or available on our websites, you can and may lose some or all of your investment. You alone are responsible for your own investment decisions. We are not liable nor do we assume any responsibility for losses incurred as a result of any information provided or not provided or not made available in a timely manner, herein or on our website or using any other medium.  We also cannot guarantee the accuracy and completeness of any information furnished by us. Graycell is not a registered investment advisor and nothing contained in any materials should be construed as a recommendation to buy or sell securities. We may or may not already have existing positions in the stocks mentioned in our reports. Our models are proprietary and/or licensed and can be changed or revised based on our discretion at any time without any notification. Subscribers and investors should always conduct their own due diligence with any potential investment and consider obtaining professional advice before making an investment decision. 

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