Steve “Dakota” Happas

* CEO of C2 Media Corp * Options Trader * Sports Radio Personality * Poker Player * Baseball Player * A.K.A.  Dakota *

If you’re here it might be for a few different reasons….Checking out what Im all about and what I might be able to do for your business, you personally, or just reading my blog that I can promise you will be very heavy opinionated about topics ranging from sports to our economy and the stock market .  Some of you have done or want to do business with me others might have heard me on the radio – either way thanks for stopping by!

As for what Ive been up to…. In the past I was the Director of Marketing for one of the largest online dating sites Singlesnet and managed the biggest affiliate network and paid search campaigns on the Internet. It was by  far one of my favorite endeavors.   I helped sell Singlesnet to  Barry Diller’s IAC corp’s unit and worked with the new IAC and Match employees during this transition.

Currently Im the CEO of which is heavily involved in the digital/mobile marketing space helping major corporations increase traffic to their web sites.  You also can listen to me on sports radio on the Boston airwaves.

In the past I’ve had my hand in numerous businesses ranging from traditional and new internet media, equity investing & finance, free to play – subscription based games, public relations and many other things.  Personally I love playing Golf, baseball, basketball and traveling the country to play in tournament poker events…..oh wait…how could I forget… I love eating out!

Posted by: Dakota and filed under News, Stock Market Opinion

Mizuho Securities USA Inc.

Healthcare Research Biotechnology Initiating Coverage


TARGET $11.00U.S. Equity Research March 19,2014 2014

ZIOPHARM Oncology, Inc.

Initiating Coverage with a Buy Rating


We are initiating coverage of ZIOPHARM with a Buy rating and an $11 price target. We are positive on the potential use of Intrexon’s synthetic biology technologies in oncology, and potentially positive data readouts and several NDA filings this year.


The bull case. 1) ZIOPHARM has the broad and exclusive use of Intrexon’s technology in oncology, 2) data read outs for IL-12 in breast cancer and advanced melanoma in 2014, and 3) eight NDAs to be filed over the next 2 years.
  • The bear case. 1) unproven platform and approach — the use of synthetic biology in oncology is unproven, with no commercially approved agents using this platform, 2) close association with Intrexon — on the positive is access to outstanding technology, capabilities and know-how, but on the negative the technology is unproven and Intrexon is a heavily shorted stock which spills over to ZIOPHARM, and 3) pipeline risk — IL-12 has previously failed in clinical trials due to “cytokine storms” and toxicity, hence is a high risk candidate, Additionally the proposed pipeline is very broad, increasing the chance of clinical failure.
  • Positive catalysts. A series of clinical trial milestones, including; 1) Phase II data for Ad-RTS-IL-12 in melanoma in 1H14, 2) Phase II data for Ad- RTS-IL-12 in breast cancer in 2H14, and 3) phase III interim data from the MATISSE trial of ZIOPHARM’s legacy compound palifosfamide in small cell lung cancer in 1H14 that could facilitate out-licensing of the compound. In addition for 2014 we are likely to see three clinical trial initiations for Ad-RTS-IL-12 in 1H14; glioblastoma (Phase I/II), melanoma (Phase II combination with standard-of-care), and breast cancer (Phase II combination with standard of care), plus multiple IND’s likely to be filed in 2H14.
  • Price target calculation and key risks. Our 12-month price target of $11 is based on a on a combination DCF and discounted P/E analysis. The primary risks surrounding ZIOPHARM’s stock relate to 1) partnership risk, being so closely aligned with Intrexon, 2) pipeline breadth risk, potentially spreading efforts too thin, and 3) reliance on synthetic biology that is largely unproven commercially.

Rating BUY

PMizuho Securities USA Inc.

ZIOPHARM Oncology, Inc.

Investment Thesis — ZIOPHARM Oncology

We are initiating coverage of shares of ZIOPHARM Oncology with a Buy rating and a price target of $11.

ZIOPHARM Oncology is a biopharmaceutical company that uses gene expression and genetic control technologies, or synthetic biology, to develop therapeutics for cancer. The company uses Intrexon’s synthetic biology technologies (; for instance RheoSwitch, to turn on and off gene expression at the site of the tumor. ZIOPHARM has one synthetic biology drug in two Phase II trials; Ad-RTS-IL-12 in melanoma and breast cancer, and a Phase I/II trial in glioblastoma multiform to begin in 1H14. Ad-RTS-IL-12 is comprised of the genetic components to direct production of IL-12, along with a second, activating or control molecule using Intrexon’s RheoSwitch technology.

The bull case for ZIOPHARM is three fold: 1) application of synthetic biology to oncology, with broad and exclusive use of Intrexon’s technology in oncology, 2) IL- 12 reads outs for breast cancer and advanced melanoma in 2014, and 3) eight NDAs to be filed over the next 2 years.

Positive catalysts for the stock relate to a series of clinical trial milestones, including; 1) additional Phase II data for Ad-RTS-IL-12 in melanoma in 1H14, 2) additional Phase II data for Ad-RTS-IL-12 in breast cancer in 2H14, and 3) Phase III interim data from the MATISSE trial of ZIOPHARM’slegacy compound palifosfamide in small cell lung cancer in 1H14 that could facilitate out-licensing of the compound. In addition for 2014 we are likely to see three clinical trial initiations for Ad-RTS-IL-12 in 1H14; glioblastoma (Phase I/II), melanoma (Phase II combination with standard- of-care), and breast cancer (Phase II combination with standard of care), plus multiple INDs likely to be filed in 2H14.

Beyond typical commercialization and regulatory risks, the bear case for ZIOPHARM relates to 1) unproven platform and approach — the use of synthetic biology in oncology is unproven, 2) close association with Intrexon — the ties with Intrexon can be viewed as a double edged sword; on the positive; outstanding technology, capabilities and know-how, but on the negative the technology is unproven and Intrexon is a heavily shorted stock which spills over to ZIOPHARM, and 3) pipeline risk — IL-12 has previously failed in clinical trials due to ―cytokine storms‖ and toxicity, hence is a high risk candidate, Additionally the proposed pipeline is very broad, increasing the chance of clinical failure.

The primary risks surrounding ZIOPHARM’s stock outside clinical failure relate to 1) platform and business risk—company valuation is tied to the success of Intrexon’s technology in developing oncology drugs, 2) partnership risk — reliance upon and very close ties to Intrexon, and 3) pipeline breadth risk — synthetic biology will be used to produce a wide variety of effector molecules. Consequently ZIOPHARM’s R&D efforts may be thinly spread over too large a domain.

Company Overview

ZIOPHARM Oncology is a biopharmaceutical company that uses gene expression and genetic control technologies (synthetic biology) to develop treatments for cancer. To date using this synthetic biology platform ZIOPHARM has completed a Phase I study in melanoma (with DC-RTS-IL-12) and Ad-RTS-IL-12 is currently in two Phase II studies (in melanoma and breast cancer), with additional DNA constructs targeting key cancer pathways to come.

The company uses Intrexon’s RheoSwitch technology to turn on and off gene expression at the site of the tumor to treat cancer. Intrexon’s synthetic biology platform is an inducible gene-delivery system that allows the controlled expression of therapeutic proteins.

The company has one synthetic biology drug in two Phase II trials; Ad-RTS-IL-12 in melanoma and breast cancer, and expects to begin testing in glioblastoma in 1H14. The lead candidate Ad-RTS-IL-12 is comprised of the genetic components to direct production of IL-12, a potent, naturally occurring anti-cancer protein, under the control of a second molecule (veledimex) based on the Intrexon’s RheoSwitch technology.

We expect additional data from a Phase II melanoma study in 1H14 (initial data was presented in December 2013) and from a Phase II breast cancer trial in 2H14 (initial data December 2013 as well). ZIOPHARM also has a portfolio of small molecule drug candidates which are no longer a strategic focus of the company and planned to be out-licensed.

ZIOPHARM Oncology was founded in 2004 and went public through a reverse merger with EasyWeb in 2005. As of mid-1Q14 ZIOPHARM had 43 employees. Most recently, ZIOPHARM raised $55mm in October 2013.

ZIOPHARM Oncology’s pipeline is currently comprised of one molecule in clinical testing, Ad-RTS-IL-12. We expect several new molecules to enter the clinic in 2014 (Exhibit 1).

  •  Ad-RTS-IL-12 is currently in Phase II testing in melanoma and breast cancer and expected to begin trials in glioblastoma multiforme in 1H14. Ad-RTS- IL-12 is composed of a gene delivery system that produces IL-12 inside the tumor, and a second ―switch molecule‖, veledimex, that can modulate the amount and timing of IL-12 production.
  •  Multigenic, immune therapy candidates- We expect ZIOPHARM to bring several multigenic, immune therapy candidates into clinical testing for various cancer settings beginning in 2014, based on the Intrexon technology.

 Small molecule programs- We expect ZIOPHARM to attempt to out-license its three legacy small molecule programs- palifosfamide, darinaparsin, and indibulin.

Exhibit 1. ZIOPHARM Oncology’s Pipeline

Candidate Description Status Disease Type Partner


Cell signal targeting Multigenic platforms

Immunotherapy programs Palifosfamide



IL-12 (adenoviral vector) + veledimex switch

na na


small molecule active metabolite of ifosfamide

organic arsenic

Oral tubulin binding agent

Phase I/II Phase II

Phase I

Pre-clinical Pre-clinical

Pre-clinical Phase III

Phase II

Phase I/II

Melanoma Breast Cancer

Glioblastoma Multiforme

na na

Small cell lung cancer

Peripheral T-cell lymphoma

Breast Cancer

Intrexon Intrexon


Intrexon Intrexon

Looking to outlicense

Licensing agreement w/ Solasia for Asia/Pac territory; Seeking to license territories not covered by Solasia

Seeking to outlicense

Source: Company reports and Mizuho Securities USA,

Bull Case

The bull case for ZIOPHARM Oncology is three fold: 1) application of synthetic biology to oncology, 2) a series of 2014 catalysts, and 3) multiple IND filings.

Application of synthetic biology to oncology — ZIOPHARM has acquired broad and exclusive use of Intrexon’s technology in the realm of cancer biology, which we view as probably the best and earliest demonstration of synthetic biology.

A series of 2014 catalysts —The most relevant to our thesis are additional Phase II data for Ad-RTS-IL-12 in melanoma in 1H14 and in breast cancer in 2H14. Phase III MATISSE interim data for ZIOPHARM’s legacy compound palifosfamide in small cell lung cancer should read out in 1H14, with potential out-licensing of the compound. In addition for 2014, we are likely to see three clinical trial initiations for Ad-RTS-IL-12 in 1H14; glioblastoma (Phase I/II), melanoma (Phase II combo), and breast cancer (Phase II combo), plus multiple IND’s likely to be filed in 2H14, along.

with preclinical data from the undisclosed multigenic and immunotherapy programs. Interim glioblastoma results could be ready in 2H14 as well.

IND filings — ZIOPHARM has up to eight NDA’s to be filed over the next 2 years – and notably multiple IND’s are likely to be filed in 2H14. IND filing in part will act as a proof of concept for Intrexon’s base technology and ZIOPHARM’s ability to develop and execute on preclinical candidates.

Bear Case

Beyond typically commercialization and regulatory risks, the bear case for ZIOPHARM relates to 1) unproven platform and approach, 2) close association with Intrexon, and 3) pipeline risk.

Unproven platform and approach — the use of synthetic biology in oncology is unproven, with no commercially approved agents using this platform.

Close association with Intrexon — the ties with Intrexon can be viewed as a double edged sword; on the positive; outstanding technology, capabilities and know-how, on the negative the technology is unproven, and Intrexon is a heavily shorted stock which spills over to ZIOPHARM.

Pipeline risk — IL-12 has previously failed in clinical trials due to ―cytokine storms‖, hence IL-12 is a high risk candidate, plus the proposed pipeline is very broad, increasing the chance of clinical failure.

Positive Catalysts

Positive catalysts for the stock relate to a series of clinical trial milestones, including, 1) Phase II data for Ad-RTS-IL-12 in melanoma in 1H14, 2) Phase II data for Ad- RTS-IL-12 in breast cancer in 2H14, and 3) Phase III data MATISSE interim data for legacy compound palifosfamide in 1H14, potentially enabling the out-licensing of the drug (Exhibit 2).

Ad-RTS-IL-12 in melanoma — We expect additional Phase II data for Ad-RTS-IL- 12 in melanoma in 1H14, although we view this as a high risk high reward trial. The benefit is the additional data around the Ad-RTS-IL-12 vector; toxicity, side-effect profile, and on-off dynamics will help bolster the case for synthetic biology. Initial data was reported in December 2013.

Ad-RTS-IL-12 in breast — In addition to melanoma, we expect additional Phase II data for Ad-RTS-IL-12 in breast cancer in 2H14. Initial data was reported in December 2013 as well.

MATISSE interim data for palifosfamide — We expect to see Phase III MATISSE interim data for the legacy compound palifosfamide in small cell lung cancer in 1H14. Importantly this could cement potential out-licensing of the compound.

In addition for 2014, we are likely to see three clinical trial initiations for Ad-RTS- IL-12 in 1H14; glioblastoma (Phase I/II), melanoma (Phase II combo), and breast cancer (Phase II combo), plus multiple IND’s are likely to be filed in 2H14 (Exhibit 2).

Exhibit 2. Catalysts and Milestones

Candidate Disease Trial / Milestone Time



Breast cancer

Glioblastoma multiforme Melanoma
Breast cancer


P2 data- Additional (longer-term)

P2 data- Additional (Mono and combo w/ palifosfamide

Initiate P1/2 study Initiate P2 combo study Initiate P2 combo study

Submit INDs

Announce new partnerships

P3 data- MATISSE interim analysis (OS)

P2 data and outlicense US, Europe rights P1/2 data and outlicense

1H 2014

2H 2014

1H 2014 1H 2014 1H 2014

2H 2014


1H 2014

2014 2014

Preclinical programs


Darinaparsin Indibulin

Small cell lung cancer

Peripheral T-cell lymphoma Breast cancer

Source: Company reports and Mizuho Securities USA,


The primary risks surrounding ZIOPHARM’s stock outside clinical failure relate to 1) platform and business risk, 2) partnership risk, and 3) pipeline breadth risk.

March 19, 2014 Mizuho Securities USA Inc. 6

ZIOPHARM Oncology, Inc.

Platform and business risk — Excluding legacy drugs that are potentially being out-licensed, most notably a Phase III drug, the entire company valuation is tied to the success of Intrexon’s technology in developing oncology drugs.

Partnership risk — Intrexon’s novel synthetic biology platform is controversial at the scientific, clinical and investor level. Consequently, with Intrexon being ZIOPHARM’s primary partner, ZIOPHARM has partnership risk by virtue of their reliance upon and very close ties to Intrexon. Intexon is alsoZIOPHARM’s top shareholder.

Pipeline breadth risk — Synthetic biology will be used to produce a wide variety of effector molecules, and ZIOPHARM’s R&D efforts may become too thinly spread over a large domain.

ZIOPHARM’s product candidates use a synthetic biology platform. There are multiple concerns around synthetic biology; safety, ethical, scientific basis, clinical benefit and potential for increasing regulation in the future.


ZIOPHARM entered into a partnership (an Exclusive Channel Partner Agreement) with Intrexon in January 2011, to use Intrexon’s genetic engineering technology (in vivo expression of proteins; currently Ad-RTS-IL-12 + veledimex and DC-RTS-IL- 12 + veledimex) for the treatment of cancer. In return ZIOPHARM will pay Intrexon on a quarterly basis 50% of net profits derived in that quarter from the sale of ZIOPHARM products, or 50% of revenues for out-licensed products.

ZIOPHARM paid Intrexon an upfront technology access fee of 3.6mm shares and received another 3.6mm shares upon dosing of the first patient in a Phase II trial in Ocotober 2012. Intrexon also purchased an additional 2.4mm shares upon execution of the ECC, and agreed to purchase up to an additional $50.0mm of ZIOPHARM common stock in the future. Approximately $19mm remains under this commitment- the latest being a $10mm purchase in October 2013 (2.9mm shares) Intrexon owns approximately 17% of ZIOPHARM’s shares outstanding. Intrexon’s CEO Randal J. Kirk serves on the ZIOPHARM Board of Directors, and is also Senior Managing Director of Third Security, which owns 18% of ZIOPHARM.

The agreement grants ZIOPHARM worldwide license to use patents and other intellectual property of Intrexon in connection with DNA administered to humans for the expression of anti-cancer effectors for the purpose of treatment or prophylaxis of cancer. ZIOPHARM is responsible for development, commercialization and certain aspects of manufacturing. Intrexon is responsible for the costs of establishing manufacturing capabilities and facilities for the bulk manufacture of products, platform improvements and costs of filing, prosecution and maintenance of Intrexon’s patents.

Intellectual property licensed from Intrexon covering Ad-RTS-IL-12 + veledimex and DC-RTS-IL-12 + veledimex includes 32 issued U.S. patents (start expiring in 2018 until 2030, with the largest number of expirations 9 in 2022), with 42 pending U.S. patent applications, 305 issued foreign patents in Europe, Canada, Japan, Australia and ten other countries, and 202 pending .

Synthetic Biology

ZIOPHARM’s development strategy is based on access to Intrexon’s synthetic biology platform in the cancer biology arena. Intrexon’s synthetic biology outlook emanates from the belief that we are at a tipping point as genomic and cellular engineering moves away from the labor intensive, hit-or-miss approach of individual artisans, to an industrialized process, much like electrical engineering moved from switches to semiconductors. Synthetic biology for the first few decades was the ad- hoc exploration and tinkering with DNA and cellular components. Synthetic biologists believe we are potentially at the point where biology can be used to construct new genes, proteins, cells and even organisms that can be used in a range of applications in health, food, energy and the environment. Synthetic biology has the goal of constructing biological tools (such as effector genes that produce antibodies that can kill cancer cells) and processes (switching molecules off and on at the site of a tumor) from discrete molecular parts.

ZIOPHARM/Intrexon’s synthetic biology platform uses an inducible gene-delivery system that allows for the controlled delivery of therapeutic proteins to treat cancer.

The first example of this regulated controlled delivery is achieved by producing IL- 12, a potent, naturally occurring anti-cancer protein, under the control of Intrexon’s proprietary biological ―switch‖- termed the RheoSwitch Therapeutic System (RTS)- to turn on and off the therapeutic protein expression at the tumor site.

ZIOPHARM’s initial synthetic biology platform drug candidate is Ad-RTS-IL-12 plus veledimex (the switching agent). A second system that uses dendritic cells versus adenovirus vectors, known as DC-RTS-IL-12, was developed but will not be advanced as Ad-RTS takes the lead (Exhibit 3).

ZIOPHARM has also shown in preclinical studies the simultaneous expression of multiple effectors (drugs) from the same piece of DNA (or construct), and express multiple genes in the same construct in stem cells (mesenchymal stem cells, or MSCs).

Exhibit 3. Ad-RTS-IL-12 Technology

Source: ZIOPHARM Oncology

Synthetic Biology Pipeline

ZIOPHARM is pursuing several synthetic biology approaches, including gene delivery with human MSCs, functional single chain (Fc) fusion proteins and multi- gene constructs, under their channel agreement with Intrexon. ZIOPHARM is also seeking to out-license their small molecule programs to further support their synthetic biology efforts.


Currently, ZIOPHARM has focused their development efforts on Ad-RTS-IL-12, but in 2Q12, ZIOPHARM completed the enrollment of a Phase I dose escalation study of DC-RTS-IL-12, an intratumoral injection of modified dendritic cells that were used to produce IL-12 at the tumor site, to demonstrate in vivo expression of IL-12 and the

March 19, 2014

Mizuho Securities USA Inc. 9

ZIOPHARM Oncology, Inc.

safety profile. At this time, there are no actively enrolling studies using DC-RTS- IL- 12.

Ad-RTS-IL-12 + Veledimex

Ad-RTS-IL-12 + veledimex is currently in two Phase II studies; metastatic melanoma and unresectable recurrent or metastatic breast cancer. A third trial, in glioblastoma multiforme, is expected to begin in 1H14.

Ad-RTS-IL-12 + veledimex is ZIOPHARM’s lead drug candidate, using Intrexon’s gene delivery system to produce IL-12. Unlike the dendritic cells used in DC-RTS, Ad-RTS uses and adenovirus vector to carry the genetic components that guide production of Interleukin-12 at the tumor. Interleukin-12 (IL-12) is a potent immunostimulatory cytokine which recruits and activates the immune system; recruiting and activating dendritic cells which prime T-cells that can kill tumor cells. IL-12 is a potent anti-cancer protein. By varying the amount of activating compound (veledimex) IL-12 gene expression can be modulated to reduce systemic toxicity and increase efficacy through high intratumoral expression.

Ad-RTS-IL-12 in Melanoma

In December 2013, ZIOPHARM presented data from an ongoing Phase I/II study of Ad-RTS-IL-12 in stage III/IV melanoma The primary objective was to evaluate the safety and tolerability of intratumoral injections of Ad-RTS-IL-12 in combination with the veledimex switch, with secondary objectives of dose selection for combo studies. 11 of 16 evaluable patients demonstrated a response of stable disease or better on a per lesion basis. The most common severe adverse events were pyrexia, hypotension, mental status changes, and cytokine release syndrome. Four of seven patients with adverse events had veledimex dosing stopped during cycle 1. Three had adverse events during subsequent cycles, and stopped veledimex dosing at that time. All adverse events were reversed after discontinuation of veledimex, demonstrating the ―on‖ and ―off‖ control.

Ad-RTS-IL-12 in Breast Cancer

In March 2013, ZIOPHARM initiated a randomized, open label Phase II clinical study of Ad-RTS-IL-12 + veledimex alone or in combination with palifosfamide to treat metastatic breast cancer. Part one of the study is a safety assessment, and part two assesses efficacy. The primary endpoint is progression-free survival at 16 weeks, with secondary end points of objective response rate, duration of response and assessment of tumor biomarkers.

In May 2013, ZIOPHARM provided a preclinical and Phase I clinical update. Controlled expression of IL-12 could limit the systemic toxicity while providing clinical activity. Further details were provided at ASCO 2013 — IL-12 mRNA could be switched on and completely switched off with the addition and removal of veledimex, and tumor invading lymphocytes (TILs) could be observed in the tumor microenvironment.

At the San Antonio Breast Cancer in December 2013, ZIOPHARM announced preliminary results from the ongoing Phase II study of Ad-RTS-IL-12 + veledimex with and without palifosfamide in patients with unresectable recurrent or metastatic breast cancer. Of the six monotherapy patients the most common severe adverse events (SAEs) were neutropenia, AST elevation and pyrexia, all reversed following discontinuation of veledimex. Preliminary monotherapy PFS rates were reported for two patients, with one subject progressing at 12 weeks and a second at 16 weeks. Recruitment for the Phase II clinical trial is ongoing to refine the dose, schedule and optimal combination regimen.

Glioblastoma Multiforme

ZIOPHARM is beyond proof of concept, already showing the controlled local expression of IL-12 in brain cancer (glioma, AACR-NCI-EORTC in October 2013), with a dose-dependent increase in survival the mouse models. In December 2013, the Recombinant DNA Advisory Committee (RAC) approved the Phase I study of Ad- RTS-IL-12, with recurrent or progressive high grade gliomas, which is expected to start 1H14.

Glioblastoma is the most frequent malignant glioma (brain cancer), an aggressive form of cancer, with a poor prognosis and requiring an aggressive treatment regime. Approximately 18,000 glioblastoma’s are diagnosed each year in the U.S. Glioblastoma patients have a median overall survival, or OS, of 11-17 months. The standard of care is surgical resection, followed by radiotherapy and concomitant adjuvant temozolomide.

Earlier-Stage Programs

ZIOPHARM’s early stage synthetic biology programs give us insight into the direction of the synthetic biology pipeline – the expression of multiple drugs or immunotherapies from one construct, , and the use of Fc fusion proteins- simplified versions of full-length monoclonal antibodies, which are generally not effectively expressed as in-vivo constructs. In mice, ZIOPHARM has shown the ability to express three distinct immune effectors from a single DNA construct (AARC-NCI- EORTC 2013). These results are particularly relevant for combo trials of multiple targeted molecules.

Small Molecule Programs – ZIOPHARM is actively out-licensing its legacy small molecule programs to focus on synthetic biology.

Palifosfamide (ZIO-201) – Palifosfamide (also known as isophosphoramide mustard) was licensed from DEKK-Tec, Inc in 2004. Remaining potential milestone payments by ZIOPHARM amount to $4.0 million and single digit percentage royalty payments on the sales of the drug. Of the five palifosfamide patents, the first start expiring in 2020, and extend to 2031. Palifosfamide is a proprietary small molecule drug that is an active metabolite of the pro-drug ifosfamide. In March 2013, ZIOPHARM announced that the Phase III study, PICASSO 3 (palifosfamide in combination with doxorubicin in patients with soft tissue sarcoma), did not meet its primary endpoint of progression-free survival, and terminated their development program in metastatic soft tissue sarcoma (European Cancer Congress 2013).

Small-Cell Lung Cancer & palifosfamide – Based upon the redefined company strategy and failure of PICASSO 3 trial, enrollment for MATISSE (a small cell lung cancer trial with palifosfamide) was suspended with 188 patients enrolled. Interim survival data for MATISSE is expected in 2H14. ZIOPHARM is seeking to out- license palifosfamide.

Darinaparsin (ZIO-101) – ZIOPHARM is seeking to out-license the remaining geographies for Darinaparsin. Darinaparsin (organic arsenic) is an anti-mitochondrial compound. Phase I and 2 testing is complete. This molecule was licensed from the University of Texas M. D. Anderson Cancer Center and the Texas A&M University System. ZIOPHARM may be required to make additional milestone payments of $4.5 million, and single digit percentage royalty payments on sales. Phase I in the IV form was tested in solid tumors and hematological cancers. Phase II was in advanced myeloma, primary liver cancer and in certain other hematological cancers. A Phase I trial with the oral version of the drug in solid tumors has completed enrollment. The drug has Orphan Drug Designation for the treatment of peripheral T-cell lymphoma (PTCL) in the U.S. and Europe.

The Asian and Pacific territory is out-licensed to Solasia. ZIOPHARM is entitled to receive additional payments of up to $32.5 million in development-based milestones and up to $53.5 million in sales-based milestones, and a double digit royalty upon net sales. Clinical studies are currently ongoing with Solasia. Of the 8 US-issued darinaparsin patents, the first start expires in 2023 and the last in 2029.

Indibulin (ZIO-301) – ZIOPHARM is seeking to out-license indibulin on a global basis. Indibulin was licensed from Baxter in November 2006. Remaining milestone payments could amount to approximately $8.0 million plus royalties on net sales of the product. Indibulin is a novel, small molecule inhibitor of tubulin polymerization. Of the 7 Indibulin patents, 3 expire in 2017 and 4 expire in 2019. ZIO-301 is a tubulin inhibitors. No neurotoxicity was seen in preclinical and Phase I data due to a differentiated pharmacology, binding to a unique site on tubulin and is active in multi-drug-resistant (MDR-1, MRP-1) and taxane-resistant tumors. Phase I testing in late stage metastatic breast cancer has demonstrated safety and tolerability.

Cancer — Melanoma

Approximately 77,000 new cases of melanoma will be diagnosed in the U.S. in 2014 and 100,000 in Europe. Early stage melanoma is often treated successfully with surgery alone. Adjuvant therapy with interferon is used if the melanoma was found in lymph nodes, as well as radiation, IL-2 and chemotherapy. Interferon and IL-2 boost the immune system to try and shrink the tumors, a strategy similar ZIOPHARM’s Ad-RTS-IL-12. However, they are often highly toxic.

March 19, 2014

Mizuho Securities USA Inc. 12

ZIOPHARM Oncology, Inc.

Advanced melanoma has traditionally been very hard to treat, with many potential drugs failing or showing little benefit. Recently however, there have been several new drugs that have been successful in this setting and several more in development that have high expectations. Immunotherapy has been a significant strategy for emerging treatments (Exhibit 4). These new therapies generally target the BRAF or PD-1 genes and proteins. BMS’s YERVOY was the first new melanoma drug approved in 13 years in 2011 and had worldwide sales of $960mm in 2013.

Exhibit 4. Recent and Potential Melanoma Therapies

Company Drug

BMS YERVOY (ipilimumab) Roche ZELBORAF

GSK Mekinist + Tafinlar

Merck lambrolizumab (MK-3475)

BMS nivolumab Roche MPDL3280A


CTLA-4 inhibitor BRAF V600E

MEK + BRAF V600E or K

anti PD-1

anti PD-1 anti PD-1


1st approved drug in 13 years

approved with BRAF V600E companiond diagnostic

FDA approved combo in January 2014 as accelerated approval

Expect FDA submission mid-2014 for 2nd line following YERVOY

Phase III Phase II

Source: FDA, company reports, Mizuho Securities USA

Cancer — Breast Cancer

Approximately 230,000 new cases of invasive breast cancer will occur in 2014. Breast cancer can be stratified broadly by the presence of hormone receptors on the tumor cell. If hormone receptors are present, then the tumor is sensitive to female hormones (estrogen and progesterone), which can drive the growth of the cancer. Estrogen receptor (ER) positive tumors are sensitive to estrogen. Progesterone receptor (PR) positive tumors are sensitive to progesterone. Treatments that block these hormones, such as the estrogen receptor antagonist tamoxifen, and aromatase inhibitors that block the production of estrogen, can stop or slow the growth of ER+ tumors. Hormone receptor (HR) negative tumors lack hormone receptors, and are not effected by hormone therapies.

Another way to characterize breast cancer is by the presence or absence of multiple copies of the ErbB2 (HER2) gene or overexpression of its protein. ErbB2 is a cell surface receptor in the epidermal growth factor receptor (EGFR) family of tyrosine kinases. HER2 is involved in numerous signaling pathways, especially cell growth and cell proliferation—hence the role in cancer. ErbB2 is the target of Roche’s highly successful trastuzumab (Herceptin) breast cancer drug, which had sales of approximately $7bn in 2013.

Recent Breast Cancer Data

From the San Antonio 2013 conference, ZIOPHARM presented data in metastatic breast cancer showing 1) the RTS technology allows controlled expression of IL-12, allowing for controlled dosing and scheduling (Exhibit 5), 2) the IL-12 construct in humans is biologically active as judged by on mechanism and toxicity profile, and 3) side effects are reversible, by turning gene expression off.

Exhibit 5. Ad-RTS-IL12 Dose Response Curve

Source: ZIOPHARM Oncology – SABCS 2013 poster

These results were similar to findings in melanoma, in that 1) Il-12 expression was tightly controlled, demonstrating an on/off cycle as judged by tumor mRNA (Exhibit 6), and 2) toxicity appeared limited and controllable; Grade 3 in 10-20% of patients (AST elevation, hypotension, leukopenia Pyrexia) and importantly reversed on discontinuation of veledimex.

Exhibit 6: IL-12 On/Off switching

Source: ZIOPHARM Oncology – Melanoma Bridge 2013 Meeting

At the Trimolecular Conference in October 2013, ZIOPHARM, in conjunction with Intrexon, showed a series of interesting preclinical results that provides insight into the future direction of the pipeline; 1) three different immune effector molecules- IL- 12, IFNalpha, and CTLA-4- could be expressed in-vivo (in skeletal muscle cells) using a preclinical mouse model, 2) single chain variable Fc fusion proteins, such as trastuzumab (Herceptin) could be generated in-vivo with high affinity and specificity in-vitro, as well as dual expression of trastuzumab and cetuximab, and 3) the same three immunomodulators (IFN-alpha, IL-12, CTLA4) could be expressed in human mesenchymal stem cells, to be used as an expression system for localized tumor- targeted delivery of single or multiple effectors for cancer immunotherapy.

Overall, these results suggest 1) the use of MSC as a delivery “bioreactor” for some settings, 2) mono and combo expression of oncology therapeutics, and 3) the expression of Fc fusion proteins as a therapeutic to replace injectable drugs.

March 19, 2014

Mizuho Securities USA Inc. 15

ZIOPHARM Oncology, Inc.

Management & Board

According to information from the company:

CEO — Jonathan Lewis, M.D., Ph.D is the Chief Executive Officer and a Director. Dr. Lewis was previously Professor of Surgery and Medicine at Memorial Sloan- Kettering Cancer Center, and has helped develop several oncology drugs.

CMO — Francois Lebel, M.D., Clinical Development and Medical Operations, has extensive drug and device development experience, holding senior leadership roles as Vice President, Research & Development at Baxter International and Global Head of Medical and Scientific Affairs at MedImmune. He has lead the development of 8 NDA/BLA’s in various therapeutic areas and also has held roles at Chiron (Novartis), Warner- Lambert (Pfizer) and Burroughs Wellcome (GSK).

Notable Board Members

Murray Brennan, M.D. (Lead Director), is the emeritus chairman of Memorial Sloan- Kettering Cancer Center’s Department of Surgery and previously served as chairman since 1985. One of the most famous surgeons, has lectured and acted as a visiting professor throughout the world and authored over 800 scientific papers. He is the recipient of numerous honors and medals for his leadership of surgery and oncology worldwide.

Randal J. Kirk, currently serves as the chief executive officer and chairman of the board of Intrexon, CEO of Third Security, an investment management firm, prior experience; founded and chairman of New River Pharmaceuticals (acquired by Shire Plc), and on the board of Halozyme Therapeutics, Inc. and Clinical Data, prior boards Scios, Inc (acquired by Johnson & Johnson

Timothy McInerney, Partner, Riverbank Capital Securities Inc, specializing in financing for the biotech and specialty pharmaceutical industry. Prior to that, McInerney was a managing director of Paramount BioCapital, and as a research analyst focusing on the biotechnology industry at Ladenburg, Thalman & Co.

Michael Weiser, M.D., Ph.D, Partner, Actin Biomed, a healthcare investment firm advancing the discovery and development of novel treatments for unmet medical needs. Prior to Actin, Dr. Weiser was the director of research at Paramount BioCapital where he was responsible for the scientific, medical and financial evaluation of biomedical technologies and pharmaceutical products Dr. Weiser currently serves on the board of directors of Chelsea Therapeutics International, Emisphere Technologies, Inc., and several privately held companies.

P&L, and Market Model

ZIOPHARM Oncology is currently “pre-revenue‖. The focus for earnings releases is on clinical trial updates, updated timelines, and cash burn. Earnings performance is largely irrelevant. Following the failure to meet clinical end points in the PICASSO 3 pivotal trial in March 2013, ZIOPHARM cut costs including a workforce reduction plan, but has subsequently added headcount in part to support the collaboration with Intrexon.

As of end of year 2013, ZIOPHARM had approximately $68.2 million of cash and cash equivalents, which management believes is sufficient to fund operations into 2Q15.

Revenue – ZIOPHARM’s current revenue consists of collaboration revenue with Solasia Pharma K.K. (started March 7, 2011)- $5.0 million in R&D funding recognized over 75 months (the estimated period of performance).

R&D – For the year ended December 31, 2013, ZIOPHARMA’s clinical projects included two Phase III projects for palifosfamide which will fall off going forward.

Exhibit 7: Market Model — U.S. Melanoma


US Melanoma Patients


Progress to 2nd line or later

Progress to 2nd line or later

% Progress to 2nd line or later


Patients on IL-12

% penetration, IL-12

Cos t drug/month


Length of Therapy, months Revenue/Patient

IL-12 Revenue, Progress to 2nd line or later

Source: Mizuho Securities USA,

2012 2013 2014


72,121 1%

43,273 60%


10,201 $

2016 2017 2018 2019

72,842 73,571 74,306 75,049 1% 1% 1% 1%

43,705 44,142 44,584 45,030 60% 60% 60% 60%

– – 2,229 9,006

0%0%5 %

10,303 $ 10,406 $ 10,510 $ 10,615

2020 2021

75,800 76,558 1% 1%

45,480 45,935 60% 60%

15,918 22,967

35% 50%

10,721 $ 10,829

2022 2023

77,324 78,097 1% 1%

46,394 46,858 60% 60%

30,156 37,486

65% 80%

10,937 $ 11,046


42,000 60%


70,700 71,407 1% 1%

42,420 42,844 60% 60%

– –

0% 0%

10,000 $ 10,100




1% 1% 1% 1% 1% 1% 1% 1% 1% 1% 1%


6 6

6 6 6 6 6 6 6 6 $ 62,436 $ 63,061 $ 63,691 $ 64,328 $ 64,971 $ 65,621 $ 66,277

$ – $ 140,574 $ 573,599 $1,023,975 $1,492,224 $1,978,882 $2,484,502

US Net revenues, IL-12 $ – $ 119,488 $ 487,559 $ 870,378 $1,268,390 $1,682,050 $2,111,827

Our US melanoma market model (Exhibit 7) assumes US peak revenues of approximately $2.1bn for Ad-RTS-IL-12 by 2023 in the second line setting for melanoma. ZIOPHARM’s split of the profit share is expected to be approximately $600mm in 2023. Other assumptions include 6 years to ramp to 80% penetration, at a cost of approximately $10,000 per month for 6 months of treatment. We could see upside from faster ramp, and upside to pricing versus recently approved targeted drugs. For Asia and Europe, we make similar assumptions with the key differences being a slower ramp in Europe and only a subset of European and Asian (ex-Japan) patients will represent an addressable market due to pricing concerns.


We use a combination of metrics to value ZIOPHARM, the most appropriate are DCF and discounted P/E analysis.

We view ZIOPHARM as a pure-play on synthetic biology, with multiple catalysts. ZIOPHARM’s peers are small cap biotech companies that are 1) focused on oncology, 2) with a targeted molecular therapeutic pipeline, and 3) focused upon biomarkers to de-risk drug development. This group of peer includes OncoMed, Verastem, Merrimack Pharmaceuticals, TESARO Inc and Clovis Oncology (Exhibit 8).

Exhibit 8: Comp Table of Cancer Biotech Companies

Molecular Oncology – Small Cap 2013 2014 2013 2014

Revenue Estimates EPS Estimates Valuation, 2017E Consensus Drugs by Phase and Diagnostics Company Ticker Rating Price Mrkt Cap 2015 2016 2017 2015 2016 2017 P/S P/E PT Upside Cash Debt PIII PII PI CDX

Chemocentryx, Inc.
OncoGenex Pharmaceuticals, Inc.
Clovis Oncology, Inc.
Puma Biotechnology, Inc.
Endocyte, Inc.
TESARO,Inc. MerrimackPharmaceuticals,Inc. MACK Newlink Genetics Corporation NLNK Synta Pharmaceuticals Corp. SNTA OncoMedPharmaceuticals,Inc. OMED Verastem,Inc. VSTM ZIOPHARMOncology,Inc. ZIOP



$8.09 $12.64 $85.60

$120.63 $14.33 $37.04


$29.41 $4.76 $36.19 $12.60 $4.76




3,633 518 1,332 573 819 407 1,010 325 479

5 88 16 160 61 158 275 42 138

2 90 172 337 115 355 398 273 244 263 104 175

(1.17) 0.65 (4.62) (2.16) (1.33) (3.63) (0.90) (2.05) (1.23) (0.19) (1.77) (0.32)

(1.43) (1.20) 174.5x – 3.69 3.18 2.1x 4.0x

(4.86) (2.95) – –

$9 $24 $ 101 $ 139 $ 21 $ 51 $ 10 $ 40 $ 14 $ 47 $ 22 $ 3

7% 150 0 90% 40 0 18% 323 – 16% 84 – 44% 0 0 37% 130 – 81% 155 0 35% 62 7

191% 91 0

1 1 0
1 1 0
0 0 2 2 1 1 0 0 1 0 1 2 2 0 1 1 1 2 3 2 1 2 2 0 1 1 0 0 0 3 2 0 1 1 2 1


3 54



114 –


(1.36) (0.65) (2.31) 0.07 0.05 (1.11) 0.11 (1.53) (0.07)

1.48 10.8x 81.3x

25 37 27


1.32 0.53 2.29 0.24 1.80 0.08 0.86

4.5x 34.3x

3.8x 28.1x 1.4x 10.5x 3.0x 12.8x 1.7x NA 3.8x 20.1x 3.1x – 2.7x 5.5x


80 23 1

28% 129 – 76% 100 – -47% 68

0 1 2 1 0

3.7x – 1111

Source: FactSet and Mizuho Securities USA, Estimates and price targets represent consensus numbers.

We believe ZIOPHARM shares appear attractively valued by a combination of DCF and discounted P/E analysis, including NOL’s of $197 million that could build to over $600 million by 2018. Based upon a blended average of our DCF and discounted P/E valuation, which include risk-adjusted revenues, we derive a price target of $11 per share (see below), or approximately 100% upside potential from the current stock price.

Posted by: Dakota and filed under News, Stock Market Opinion

Every now and then I come across something that garners a very High Risk-Reward scenario in the stock market – and if and when that opportunity becomes available I basically try to go “All-In” with it – One company that I have been following very closely over the past year is this one – ZIOP – what I like is finding a small company (ZIOP currently has a $320 million dollar market cap) that has tons of short and near term catalysts while giving me technical indicators on price movement – well after pulling back from a recent high of $5.50 a share in the beginning of April and hitting a low this past Friday of $2.87 the stock rallied nicely throughout the rest of Friday closing above the previous days high of 3.22 –

Here below is my most recent post from one of the biotech forums I participate in:

ZIOP just made a very bullish technical indicator making an outside reversal on the daily chart – $3.23

ZIOP made a very key technical reversal on Friday — as we all know ZIOP has corrected quite a bit since hitting that 5.50 last month – since that time ZIOP as been falling ever since trying to repair itself technically – ZIOP got caught with all the other small bio’s losing about 40% of value from recent highs – as we have recently tested the low 3 area over the last week we finally made a reversal pattern in the down trend on Friday – this is when a stock makes a new low from the previous day (Thursday) – made lower low on Friday morning – then rallies and closes over the previous close and more importantly the high of the day on Thursday — ZIOP did this buy closing at 3.23 on Friday – these technical reversals are not 100% but they have a very high percentage of being valid and I rather have a high percentage than not when trading/investing —

There are also some key fundamental things that are happening soon in the next few weeks to few months that could also bring ziop back up to the mid 5 to 6 area — phase 2 data – asco abstracts and big pharma partnership — with these catalysts and technicals improving we should now see much higher price appreciation starting next week —

My 2014 targets on ZIOP are $8-$10 a share by the end of 2014 and $17-$20 plus in 2015 — and depending on how things go in the next 3-5-10 years this has the potential of being a once in a generation type stock and hit $100-$200 a share in that long term timeline — with 100 mill shares outstanding a $10 – $20 billion dollar market cap is not unheard of in this sector over a 10-20 year time period –

Also – one other thing that has been putting pressure on ziop

After the end of the upcoming week all the cheap shares under that 1.50-1.70 area that traded last year when ziop fell out of bed will have become long term cap gains and profit taking from is over-

Posted by: Dakota and filed under News, Sports, Stock Market Opinion

Sports thoughts  – NFL Superbook Contest Update… and look out below for the stock market!

Still trying to get my head around the thought of Robinson Cano making more than $20 mill a year…I mean he is good and all but how much better is he than Pedroia who settled in on the $16 mill area – But really…$28 mill is what he wants?

Why are there reports out there that Stephen Drew might be back at SS with the Red Sox??? Didn’t we trade away a lifetime gold glove winner with Iglesias to make room for XB? The Sox are now free rolling after winning the World Series – lets see a full year with Middlebrooks at 3b and XB at short!

Has Rondo been traded yet??? Please trade him and Jeff Green…I really want a 3 year rebuilding project so we could end up with a Durant-Westbrook -Harden scenario for the future – this way its not just 1 championship but a string of them –

Still cant figure out why the 23 year old founder of Snapchat turned down $3 billion dollars for his company from Facebook…this will go down as one of the worst executive decisions of this decade – even if he gets a few more billion next year there are two many risk factors that could easily make this worth a lot less!

As for the Stock Market... well lets just say that the FED induced bubble is about to pop! – Major indexes – Dow-16k – Nasdaq 4000 – SP500 – 1800 – should all have major corrections from these levels – could be as early as this final month of 2013 – if not 2014 will be a disaster year in the stock market –

Finally – I’m still hanging into contention for the NFL Super Book contest – 1034 entries with a prize pool of $1.55 million – $550k going for first place – I got as high as 25th place after week 11 but after a 1-3-1 in week 12 I fell back to 60th -with 5 weeks left I need to reel off a few 4-1 weeks to make the money!

Posted by: Dakota and filed under News

I’ll keep this short and sweet today – going into week 7 I stand tied in 39th place with a few other entries out of the 1034 that ponied up $1500 and a shot at winning $550k for 1st or grabbing some of the $1.5 million dollar prize pool.  My overall record is 17-11-2 for a total of 18 points.

Here are the 5 picks against the spread I’m going with:

Jets + 4 over NE

Skins – 1 over Bears

Tenn + 4 over SF

Colts + 6.5 over Denver

Minn + 3.5 over Giants

The leader in the contest has 21.5 pts with an overall record of 21-8-1 (70%)

In past years the winner in the contest finishes usually around  65-66%

Posted by: Dakota and filed under News, Sports

After 6 weeks I stand at 17-11-2 (18 pts) in 39th place out of 1034 entries

Well I can’t complain about going 4-1 ATS for the 2nd straight week – this two week stretch moved me all the way up to 39th place in the contest.  Total prize pool is over $1.5 million dollars with $550k paying 1st place – the top 30 will get paid at seasons end.

Here are some tidbits from week 6 –

19 entries went 5-0

125 went 4-1

292 went 3-2

326 went 2-3

221 went 1-4

46 went 0-5

Another overall tough week with the majority of entries having a below .500 week –

The leader in the contest has 21.5 pts with an overall record of 21-8-1 (70%)

In past years the winner in the contest finishes usually around  65-66%

Posted by: Dakota and filed under News, Sports

After I went 4-1 ATS last week I’m back in the hunt for 1st place of $500k

As we move deeper into this NFL season the games get tougher as the odds makers get sharper.  After last weeks picks came through in the Las Vegas Hilton Contest the 4 wins put me now in 97th place out of 1034 entries. The card this week has me riding my coat tails on some teams that you might want to stay clear of.

After 5 weeks of picking 5 games against the spread each week I stand at 13-10-2 for total of 14 points – the leader in the contest has 18.5 (18-6-1) – of the 1034 entries the average point total is 11 (11-14) or a success rate if 44% – So I feel really good about my 13-10-2 record so far.

With that being said here goes my 5 picks for this week!

Tampa + 1.5 over Eagles

Panthers + 2.5 over Vikings

Rams + 7.5 over Texans

Steelers + 2.5 over Jets

Patriots – 2.5 over Saints

Despite me breaking the Gronkowski news that he would definitely be out this week (2 hours ahead of ESPN) I still went with the Patriots at home over the Saints.

Here below is the link to the contest – they have the weekly standings (I’m listed as and they post everyone’s selections Saturday late afternoon.

As always you can follow me on twitter @dakotablog

Posted by: Dakota and filed under News, Sports

Gronkowski Held Out Again – Targeting Return Against Miami Oct 27th

My inside sources have Gronkowski not playing this week against the Saints and a small chance he could play some limited action against the JETS if activated.  Even the JETS game is unlikely but my sources have indicated that its almost 100% that he will make his return when the Patriots play the Miami Dolphins in 2 weeks at Gillette on Oct 27th.

Posted by: Dakota and filed under Sports

Atlanta over the Patriots is the top choice of the 1034 entries in the contest – 390 of the handicappers picked Atlanta laying the 2.5 and 129 are on the Patriots.  On a percentage basis of the two sides picks that was the 2nd biggest difference 75% to 25%.  The biggest split was on Pitt 82% over Min at 18%.  The 2nd biggest one was on New Orleans over Miami 78% to 22%.

My 5 picks again are mostly against the grain as this week I am going with Jax, TB, Giants, Detroit and Miami.  Detroit is the only one of my selections that is picked more than the other team but its 205 to 202 so pretty much 50/50.

Also of note – the leader in the contest after 3 weeks is “All YOU CAN EAT” with record of 12-2-1 for a total of 12.5 points!  I stand tied in 45th place at 8-5-2 for a total of 8.5 points.  This week the leader is going with StL, Houston, Det, Tenn and Miami.  Thus we both have Detroit and Miami this week!

Once again 1034 entries have to pick 5 games each week against the spread – their selections below:

SF -3 120
STL +3 48
PIT -2.5 248
MIN +2.5 56
BAL -3 178
BUF +3 131
CIN -4.5 155
CLE +4.5 208
IND -7.5 233
JAX +7.5 97
SEA -2.5 225
HOU +2.5 267
TB -2.5 84
ARI +2.5 149
DET -3 205
CHI +3 202
KC -4 232
NYG +4 169
TEN -3.5 138
NYJ +3.5 222
DAL -2.5 130
SD +2.5 227
WAS -3 132
OAK +3 60
DEN -10.5 161
PHI +10.5 125
ATL -2.5 390
NE +2.5 129
NO -6.5 341
MIA +6.5 98
Posted by: Dakota and filed under News

After 3 weeks I’m In Solid Position Out Of The 1034 Entries!

Week 3 is now in the books and for the masses in the contest it was a brutal week with the top 3 selections all-losing.  I ended up picking up ground going 3-1-1 against the spread, which puts me tied in 45th place – for the season I’m now at 8-5-2 for a total of 9 points in the contest.  The leader has 12.5 points and then there is a small group with 11 points – either way there are 44 out of 1034 that have more points than I do.  Don’t forget the top 30 at the end of week 17 will get paid with about $550k going to the winner!

Here are my week 4 picks:

Jags + 7.5 over Indy

T.B. -2.5 over Arizona

Detroit – 3 over Chicago

Giants + 4 over KC

Miami + 6.5 over New Orleans

There you have it – hopefully I can get at least 3 or more wins out of that group and stay in the hunt!

Here below is the link to the contest – they have the weekly standings (I’m listed as and they post everyone’s selections Saturday late afternoon.

As always you can follow me on twitter @dakotablog

Posted by: Dakota and filed under News

Amazingly 13 of the 16 games this week they are betting on the underdog!

The below is based upon 1034 entries that pick 5 games against the spread every week for the Las Vegas Hilton SuperBook Contest – each entry put up $1500 which put this years total prize pool at $1.5 million dollars – 1st place will get paid over $500k – top 30 places get paid.

My Picks for Week 3 are – Tenn, Miami, Jets, Cinn, and Wash

Looks like the heavy action is on Minn over Cleveland (455 selections of the 1034 entries), Giants over Carolina (399 selections), Green Bay over Cinn (355 selections)… amazingly 13 out of the 16 games this week the handicappers are on the underdog taking whatever points they can get.

PHI -3.5 47
KC +3.5 130
TEN -3 181
SD +3 183
MIN -5.5 455
CLE +5.5 41
NE -7 88
TB +7 157
HOU -2.5 137
BAL +2.5 171
DAL -4 111
STL +4 244
NO -7 137
ARI +7 104
WAS -2 154
DET +2 183
GB -2.5 355
CIN +2.5 84
CAR -1 73
NYG +1 399
MIA -2.5 170
ATL +2.5 220
SF -10 123
IND +10 128
SEA -19 70
JAX +19 140
NYJ -2.5 115
BUF +2.5 189
CHI -2.5 174
PIT +2.5 205
DEN -15 89
OAK +15 108
Posted by: Dakota and filed under News

This week will separate the men from the boys!

Last week in the Las Vegas Hilton Contest I went up against some of the IRON and came out on the short end going 2-3 against the spread.  I really don’t understand how Carolina blew it against the Bills giving up an 80-yard drive and a TD to put me in the loss column – pretty devastating if you ask me.  That one game would have put my point total in the contest at 6.5 and in 30th place out of 1000 entries…instead I am in 153rd place with 5.5 points after two weeks going 5-4-1.  Of the 1043 entries the average point total stands at 4.1.

Of note – only two entries have 8.5 points, as they are both 8-1-1 ATS, four entries stand at 8 points all at 8-2….. whats this mean? Well it means that Im still right in the thick of it going into week 3 and still have my sights on the $1.5 mill dollar prize pool with $550k going to first place!

Here are my picks this week:

Skins -2 over Detroit

Cinn +2.5 over G.B.

Jets -2.5 over Buffalo

Tenn -3 over S.D.

Miami -2.5 over Atlanta

Here below is the link to the contest – they have the weekly standings (I’m listed as and they post everyone’s selections Saturday late afternoon.

As always you can follow me on twitter @dakotablog

Posted by: Dakota and filed under News, Sports

After I Had a Solid Start in Week 1 (3-1-1 ats) This Week Could Separate the Men from the Boys!

As I mentioned last week I finally took the plunge and entered the Las Vegas Hilton NFL contest this year to match my handicapping skills against others around the country – this year they broke the number of entries which totaled 1034 players putting up $1500 dollars each making a prize pool of $1,551,000.  The top 30 places will get paid with about $550k going to 1st place! In the past the winner has predicted about 66% of its selections picking 5 games every week against the spread.  So in theory if you can somehow go 3-2 every week or 13-7 every 4 weeks then you have a shot on getting part of that prize pool!

Last week I ended up going 3-1-1 against the spread as my winners came from Denver -7.5 over Baltimore, Miami +1 over Cleveland, and Dallas -3.5 over Giants….my loss came from Pitt who just went the wrong way after Pouncey got hurt and was lost for the season…finally I pushed with Chicago -3 over Cinn thanks to a Sanu fumble with Cinn on the move late to increase their lead and a great touchdown catch by Brandon Marshall to put the Bears up 3 in the 4th quarter.

Week 1 results were kind of crazy with only 3 entries going 5-0 and on the flip side 57 entries went 0-5 – pretty remarkable if you ask me…. anyways my 3-1-1 record (1 point for each win and .5 for pushes) gives me 3.5 points which places me tied in the 45th spot out of the 1034.  8 entries did go 4-0-1, 33 went 4-1 and 35 players did what I did going 3-1-1 for 3.5 points – 52 players went 0-4-1.

This week’s card doesn’t look as easy in my eyes as last weeks did but nonetheless I still need to come up with 5 picks that I feel have a shot at covering the spread.  Here is what I’m going with:

Week 2 Selections

Carolina -3 over Buffalo

KC -3 over Dallas

TB + 3 over NO

Giants + 4.5 over Denver

Seattle – 3 over SF

Here below is the link to the contest – they have the weekly standings (I’m listed as and they post everyone’s selections Saturday late afternoon.

As always you can follow me on twitter @dakotablog

Posted by: Dakota and filed under News

$1 Million Dollar Prize Pool Up For Grabs!

So I decided to take the plunge finally and enter the Las Vegas Hilton Super Book Contest. The way it works is simple… you pony up $1500 and enter the name of your choice … then each week you pick 5 games against the spread..and much like a poker tournament they pool together all the money into a prize pool and payout the top 30 – 1st gets top prize (about 33% of the total pool).

I’ve been following this every year since I met one of my good friends that lives in Vegas who won this contest way back in 1994.  He finished that season with a 55-29-1 record against the spread, which was good enough for 1st place that paid him $100k…. needless to say he blew through that money as quick as you can say #yo-11.

Last year the total entries reached 750 paying out a 1st place prize of $450k (total money pool was $1.125 mill)

Each and every year the winner has a success rate between 66-68% against the spread… so if you think you can pick 2 out of 3 winners then this is the best investment of your life! – Don’t forget though you need to pick 5 games every week – not just 3.

This year they are expecting over 1000 entries and will be paying the top 30 spots with 1st place paying about $500k.

I’m going under the name — wait for it……. so this way if I do win this thing Ill get the credit deserved…or if I totally tank…. then you can all beat me up! LOL —

My week 1 picks are as follows:

Denver -7.5 over Baltimore

Pitt -7 over Tenn

Chicago -3 over Cinn

Miami +1 over Cleveland

Dallas -3.5 over Giants

There you have it!!! 5-0 please!!!!

Here is the link to the site:

As always you can follow me on twitter @dakotablog

Posted by: Dakota and filed under News, Sports

Sales problems forcing WEEI into ICU

It is no mystery that over the past few years Entercom has gotten more involved with money decisions at the Corp level.  Entercom is a publically traded company that owns and operates about 100 radio stations in the US.  Most of these stations are not in major markets.  Boston is right at the top of its list and any issues in one of its top markets is a major concern and is a “Needle Mover”.

Obviously increased competition mainly from 98.5 The Sports Hub and an up and coming 1510 NBC Sports Radio continue to impact ad sales thus causing Entercom to continue to cut major on air talent.  The goal for corp Entercom is simple – they are now positioning themselves for one of two things. A sale of WEEI to the Boston Red Sox or John Henry’s Boston Globe or they will continue to make major cuts and run the Boston market like most of their stations around the country.

Basically Entercom is trying to cut their way to prosperity for WEEI and that never works when that impacts the product on the air.

In Entercom’s recent public filing with the SEC its clear as day – Net revenues increased the most for our stations in the Kansas City and Indianapolis markets, offset by revenue decreases for our stations located in the Boston and Greensboro markets.”

Entercom has its eyes on making money and a growth strategy for its shareholders – thus they will continue to cut in markets where they are not profitable and have increased competition.  In June they moved into the San Francisco market – a major DMA with plenty of upside for growth.  I think the plan there is to replace or try to duplicate the success that WEEI previously had in Boston.

The writing is not only on the wall – the wall is made up of the writing! Every contract that has been expiring has been either re-written or not re-signed.  Today’s news of Jason Wolfe comes at no surprise as “Big Brother” is taking more control.

In the coming months and into 2014 there will be major money decisions on the rest of the on-air talent.  Its not only “Whose Next?” but “What’s Next?” for WEEI!

Posted by: Dakota and filed under News, Sports

If I was given the ability to be the GM of a major league team here is my line-up!

Jacoby Ellsbury CF

Starling Marte LF

Paul Goldschmidt 1B

Dave Ortiz DH

David Wright 3B

Alex Rios RF

Elvis Andrus SS

Jose Altuve 2B

Russell Martin C

Bench:  Coco Crisp, Jason Kipinis, Jonathon Lucroy

In this day of the reduction of PEDs in baseball we will revert back to a speed/defense type of lineup with power only coming from a few spots in the line up.  The above players would cost me about $50 million of my allocated payroll – but Crisp who is on my bench is making 7 mill of that so he could easily be on his way out! Also with all this speed my defense is excellent with a lot of the players already receiving gold gloves!

You can listen to me from time to time Co-Hosting the Bawstin Diehards Show on 1510 am NBC Sports Radio Boston!

Posted by: Dakota and filed under Sports

Who is to Blame?

Lets just start off by saying that any business – baseball, retail or anything else cannot overcome 30% of its spend getting a negative ROI (Return on Investment).  That’s right folks…. the red sox have 4 players on this years roster starting out with a negative return which makes up 30% of payroll. Carl Crawford (19.5 mill), Lackey (15 mill), Daiske (10 mill), and Jenks (6 mill) total over $50 million of a 2012 red sox payroll coming in between $160-$170 million.

The allocation of budgeted payroll in any business can ultimately dictate success or failure, good or bad business.

If you were starting a new team and wanted to slot where your most expensive players would be it’s pretty easy to understand what is the most important factor on winning.  For starting pitching it’s your top 3 in the rotation. In the bullpen its your closer and setup man.  As for positional players you don’t need to be a rocket scientist to know it should start up the middle…Ill rank the following – 1. SS …2. CF…3. Catcher and 4. 2B. If you look at this year’s payroll only Jacoby and Dustin (each $8 mill) fit into this model.  The red sox highest paid positional players are corner players…Agon, Crawford, Youk and Ill throw Ortiz into the mix cause he only DH’s.  Those four players, which of course do not play any positions up the middle account for $67 million dollars or 40% of total payroll and even more glaring is $67 of $90 million (74%) allocated to positional players.

To me this is just laughable!

I understand that in this day and age you pay for production and most production will come and is supposed to from your corners but more players up the middle now are also putting up big production numbers.

Again its about wasted spend which when you break this down is just god awful!

As for your two most important positions in the bullpen…. well we all know this… Our closer is in Philly and our set up man is the starting rotation.

Who is to blame? Is it the owner? Is it Lucchino? Was it Theo? Ben? — Well John Henry clearly stated that Larry Lucchino runs baseball operations….right? With that being said…. Theo and Terry are gone…they moved Ben up the ladder and Larry is still in charge.  So the question is …since Larry is the man at the top maybe its Lucchino that needs to go.  We will find out real quick who is running the mother ship if there is more conflict coming out of Fenway.  If it continues will John Henry pull the plug on his #1 sidekick?…. Only time will tell.

Posted by: Dakota and filed under News, Sports

Please don’t tell me that you cant take a look at what happens in the regular season because if anyone watched the Celtics this year could clearly see how Glen “Big Baby” Davis have fallen off a cliff of productivity!

How important is he to the Celts? Well consider this…. When Perk was here and healthy Doc Rivers would most always have Big Baby on the floor finishing not only regular season games but also championship playoff ones!

I really wish Doc just could have looked at what Baby has given us recently and realized that he’s got nothing in the tank to contribute to the Celtics.  By removing him completely from the rotation it would be …insert cliché here…”addition by subtraction”…

Here is one man’s vote to have a DNPCD (Did Not Play Coaches Decision) for the Big Baby’s stat line for the rest of this series!

Posted by: Dakota and filed under News, Sports

It is clearly evident that since the trade for Jeff Green that he is just not comfortable playing either the 2 or the 3 spot on the floor!  BIG Baby has been a BIG disappointment and not getting any production out of him is definitely hurting this team.

Its time for the Celtics to create a match-up problem for Miami….

Let’s roll out a starting line up of KG – Green – Pierce – Allen – Rondo

When we beat the Lakers to win the championship James Posey was on the floor as the “4” and the reason for Jeff Green being here (not including what would happen in the future) was to be this years James Posey.

This team can “man up” and go win another title or fall by the wayside to the Miami Heat!

Can we also change his number?  I really don’t like watching him with “Antoine’s 8” … It brings back to many bad memories….

Posted by: Dakota and filed under News

One Pick Before The Patriots Last 2nd Round Pick!

Not much more to say here than – Grrrrrrrrrrr.  Greg Little ended up going 59th overall to the Cleveland Browns one pick before the Patriots 3rd draft pick (60th overall) in the 2nd round.  There is no guarantee that even if he was still on the board the Pats would have taken him but…at least I would have had a chance of having my binky/man crush playing for my home town team.  The Pats ended up trading out of that pick and who knows if it was because of Little or the other wide receiver taken right before them (Torrey Smith – Maryland taken by the Ravens 58th).

Posted by: Dakota and filed under News, Sports

It is widely noted my man crush for the PATS to draft Greg Little the WR out of UNC….so after the first round went by the board and 3 wr’s taken (AJ Green – Julio Jones- Jon Baldwin) I see about 3-6 wide-outs drafted in the 2nd round .

The good news is …he wont be one of the next 3 or 4 taken in round 2 unless one of the teams love Little like I do…Thus if Im the PATS I can take him with the 28th pick (60th overall) in round 2 or their first pick in round 3 which is #10 (74th) – either way we have a great shot at getting a slot WR that with Brady throwing to him will haul in 50 plus catches a year and be great in the red zone!

Posted by: Dakota and filed under Sports

Little Will Be BIG If Drafted by the Patriots….

Don’t bother trying to see how he did in 2010…. he didn’t play…He was suspended for all of 2010 for having a relationship with an agent.  Who is Greg Little?   He’s a 6 foot 3 inch 225 pound RB looking receiver.  He’s not fast – (runs a 4.5 40) but this guy has unbelievable strength and ability to catch the ball in tight places from the slot position.

Some compare him to Boldin…a guy who many PATS fans wanted to make a free agent play for last year.  No alligator arms here – If I said to you “would you like a more athletic version of Wes Welker? Or a Stronger Deon Branch?” You would all say “Sign me up!”

The Best thing about Little is his “Value” and  the PATS could steel him either with their late 2nd  or 3rd round pick…Since he missed all of 2010 and has a history of immaturity (didn’t we all in college?) he wont be drafted in the 1st round this Thursday.  Thus the “Value” — perfect fit for the Brady offense and getting a 1st round talent after the 1st round.

Some of you might also say we don’t need another WR — well… the way we rely on the underneath stuff from our offense and with always a potential of injuries from running routes next to linebackers…. I say we could definitely need a Greg Little!

His 2009 stats were pretty dam good for college – 62 catches for 724 yards and 5 td’s…. he also runs that end-around play that the PATS have in the play book— like I said — perfect for this offense — and oh by the way – he has basketball like leaping ability to go with his size– 38 inch vertical jump – 10-10 broad jump and a 4.1 short shuttle…. Get to know his name cause if the PATS do draft him expect 50 plus catches every year and plenty of highlight leaping catches in traffic.

Posted by: Dakota and filed under Sports

Forget Crawford or Jacoby leading off….

Never in a season that I can remember has there been so much talk about where everyone should hit….most of this trouble is the fact that Francona just doesn’t come out and take a stand and say “this is my best line up to win games”…instead he’s moved this lineup around causing everyone under the sun to come up with their own opinion…well — for one… Jed Lowrie should be our everyday SS — Name me one thing that Scuturo does better than Lowrie?

Here is my Ultimate Sox Line-up

1. Jed Lowrie (Youk would be my 2nd choice)

2. Carl Crawford

3. Dustin Pedroia

4. Adrian Gonzalez

5. Kevin Youkilis

6. David Ortiz

7. J.D. Drew / Cameron

8. Salty / Varitek

9. Jacoby Ellsbury

I just cant live with either Ellsbury or Crawford leading off — both guys can run like a deer but they just don’t get on base high enough to warrant that top spot — both are .350 to .360 OPB guys — add in the fact that they both don’t hit lefties well just make either one of them not the best choice — we need a leadoff guy that gets on base above .380 and can do it against both lefty and righty pitchers!  You need consistency at the top of your line up….its not a flip flop position!

PS:  The Big O aka Glen Ordway ….will eat crow… he said that my lead off situation will never happen….He knows nothing about baseball!

Posted by: Dakota and filed under Bio, Sports

Quick cut of my morning radio show open on sporting news radio boston back in the fall of 2004

Dakota in the Morning intro 11-16-04

Posted by: Dakota and filed under Bio, Sports

Here is the radio show open from november 2004 when I hosted my morning show on sporting news radio boston 1510 am-

This open was a bunch of cuts from the previous days show that dwarfed into old school video game talk after a grande & max cut from the celtics game the night before —

Dakota in the Morning Video Game Show Open

Posted by: Dakota and filed under Stock Market Opinion

Today the stock market – most notably the DOW and SP500 index reached the top end of my target area. In my previous posts I had mentioned that there might be a move to the 11,700 area on the DOW before the real sell-off would begin. I am now expecting a drop in the market of 10-35% from this current level- this should take place anytime in the next 12-24 months.

Posted by: Dakota and filed under Sports

Sox Should Allocate Their Money On Lee

To me this is not even a question.  Yes, Carl Crawford is dynamic and would fit nicely into this lineup, so would Jayson Werth.  But I’m tired of the Sox wasting $8-$15 million a year on 1 or 2 free agents who end up not worth what we paid for.  There is risk to Crawford and Werth being able to live up to their contract.

If I said to you that I’m raising your ticket prices but I’m not sure how better the product on the field would be I don’t think you would be to happy with it.  On the other hand if I asked you that same question but told you that I could guarantee that 20% of the time our product would improve greatly and that 20% impact would raise the product on the other 80% I think we would all be fine with that.

Well, that’s what I’m talking about on the difference on signing Cliff Lee or taking a shot at one of the two mentioned above.  Cliff Lee is all that and then some.  A CY Young candidate every year and a shut down pitcher against our biggest rival the YANKEES!

Crawford or Werth could put up great numbers but come playoff time they could easily go 0-4 or 4-4 and that wouldn’t guarantee a win!  On the other hand – if Cliff Lee is on the mound and pitches lights out!  I’m pretty certain that would equate to a win!

As for a starting rotation – the signing would mean the end to Matsusaka.  This I’m totally OK with (been saying this for years).  Though he shows flashes of greatness he still cant get past 5 or 6 innings thus always taxing the bullpen and causes Tito to manage his bullpen differently during the other starting pitchers starts.  In addition, word out of NESN is that when Matsusaka starts ratings drop compared to the other 4 slots! – I’m kidding of course but maybe Tom Werner should track this! I would either move him to the bullpen (I really think he would be more effective for 1 or 2 innings- and yes he would have to change his routine- but this is a guy who likes to throw everyday anyway in between starts) or trade him to a national league team where he has been lights out when facing those teams.

  1. Cliff Lee
  2. Clay Buchholz
  3. John Lester
  4. John Lackey
  5. Josh Beckett

Please don’t argue with me on who should be 1-2-3 …It doesn’t really matter.

Once again- if the goal is trying to win a world series who gives you a better chance? Lee…. Crawford or Werth?

It’s a no brainer!  Theo… get it done!

Posted by: Dakota and filed under Stock Market Opinion

After Technicals Broke its uptrend in the past few weeks momentum is now to the downside

Celgene – which recently lost its upward momentum, should now continue to trade down and test lower support levels.

You can see on the chart below the break in the up trend line and then a bounce back up to test that rising support line which is now resistance.  With the overall market going through its correction that I have been calling over the past month – Celgene and many others will follow.  Celgene will confirm the reversal once it trades under the low of 59.05 – that is the day the share price closed an area gap then rallied before it met this recent resistance. You can also see in the chart the new downtrend support line that today stands in the low 58 area and that will continue lower each day –

Posted by: Dakota and filed under Sports

If you thought last years Patriots defense against the pass was terrible take another look…… This year it’s even worse!

So where does the blame game go?  I think it mostly rides on the lack of getting to the quarterback.  When doing a deep dive into the numbers I looked at the % the Pats would sack the QB per pass attempts.  Just looking at the total number of sacks is not a good comparison since some teams don’t have nearly the same amount of pass attempts to have a chance at a sack.

This year the pats have had 395 pass attempts against them registering a total of 18 sacks.  This equates to a sack/per attempt % of 4.5%.  The 2009 patriots who were porous as well had a respectable 6%.  A 1.5% decline might not seem much but that means that the Pats are 25% worse when comparing apple to apples from 2009-2010.  Last years super bowl teams NO and INDY which both played that “bend but don’t break defense” finished the year with NO at 6% and INDY at 5.8%.  The JETS defense came in at 6.3%.

Taking a look at some of the best teams in this category with playoff potential for this year are the following:

Oakland 9.7%

San Diego 9.6%

Giants 9.7%

Green Bay 8.1%

Pitt 7.7%

Philly 7.3%

Another telling stat is comparing last years 3rd down defense to this year.  In 2009 the pats opponents converted 37% of the time…this year it’s a staggering 51% of the time!  To put that in perspective the pats offense converts on 3rd down about 45% of the time for each of the last two years.

The above numbers basically tell us that no matter who the patriots are playing they make the opposing teams passing offense just as good if not better than our own Patriots offense!

This is not something come playoff time that will get the job done to win another Superbowl.  Hey…but look at the positive…. next year we have two first round picks that if only one of them can get to the QB the PATS can be the team of the decade for two decades in a row!

Posted by: Dakota and filed under Stock Market Opinion

Both Support Lines Broken –  Look For a Move Down to the 52-54 Area from Current 59.50 Share Price

Just wanted to follow up on my technical call with Celgene – as I mentioned previously (Nov 10th entry) it was trading above two key technical support levels and if violated would turn Celgene share price down to the lower end of recent support.  Celgene based purely on the technicals should trade down into the 52-54 area before finding support – this support area goes back to its trading channel that started in early 2009.  The fundamental story for Celgene is great but with the overall market turning down this will weigh on Celgene’s share price until support levels are reached on the major indexes.

The Ultimate support levels that Celgene could trade down to is the 40-46 area but for this to be met there would need to be a change in the fundamental story and/or that overall market correction of 30% that I definitely think is a real possibility.

Posted by: Dakota and filed under Stock Market Opinion

Technical Support Levels Broken & US Dollar Rally

Since my entry on this blog dated October 20th, one that talks about the potential of us testing 7500 on the DOW sometime in the next 12-24 months I’ve been keeping a close eye on the technical underpinnings to see just when this might happen.  In that post I talked about the risk/reward scenario from the 11,100 area and that we might have one more push to 11,400-11,700 before the meltdown begins.

Well since that blow off top we now traded down and have recently broke the technical uptrends that momentum players love.  Not only has the major indexes lost its upward momo but also the US Dollar has bottomed (see my post of the US Dollar Bottom – Island Reversal).

The dollar is now poised for a hard rally that will cause the equity market to fall – and based upon what I’m seeing this is going to be a very swift downward move as the dollar will move sharply higher – some might use the word “Violent” because the moves we will now see will be “Violent”.  Volatility will be back in the market during this move and the traders will be in and out of positions before days end to ensure they have “Cash In Hand”.  We will once again here the term “Throw the Baby Out With the Bath Water” on CNBC by all the talking heads.

Cash is now king again IMO and we are going to spend the next 2 years unwinding this latest fed induced credit bubble.  During this time we will finally see a bottom in housing – at least another 20% decline and the jobs market will finally gain about 150k each month – the 150k a month number is the new jobs we need to add each month just to keep us at 9.5% unemployment.

As for how far we can drop? – Well that all depends over what time period.  I am pretty certain on this first leg down we are looking at a 10% drop from this level with the back drop of trading down a lot further at any point in the next 12-16 months.  Just how low? Well about 30% before I would feel safe about the risk/reward scenario being on the long side!

Posted by: Dakota and filed under Stock Market Opinion

Recent Key Technical Uptrend Line Has Now Been Violated

The NASDAQ out of all the 3 major indexes has been the best performer during this most recent rally and yesterday’s action broke its sharp uptrend.  The DOW and SP500 are both sitting right above theirs and with the nasdaq taking the lead on the way up it will also lead on the way down.   The corrections in the market have begun and expect the other indexes to also break their up trends.

In the chart below you can see the uptrend line broken yesterday

Posted by: Dakota and filed under Stock Market Opinion

20%-35% Correction is in the Cards From Current $320 area

With my overall theme in the market as being to the down side from our recent levels and Cisco making huge news today with bad numbers causing its stock to have a huge drop ($23 billion in market share loss so far) its time to look at where Apple can go from here.

In late 2008 and early 2009 Apple’s stock price traded below $80 a share and I remember saying at the time that if there was one stock to buy that you wanted to be long it was apple!  My two biggest reasons was for one – Apple had $24 dollars a share in cash and with a stock price at a little more than 3 times its cash in the bank it was like buying apple for $55 dollars in my mind.  The second reason was the boom for apple products was still booming – I myself turned to all mac based products and after a few months of getting used to I came away loving everything I bought!

This is not a fundamental call because Apple is still a great company with plenty of growth ahead of it.  It’s just a call about the underlying technical’s that call for a correction in its stock price.  After the bottom of $79 a share it has made an unbelievable run to the $320 area and over the past few weeks has been consolidating at this level.  The rate of acceleration has slowed and the stock price is ready to break some of its recent uptrend lines.

If the $320 area is the top – which in the short term I believe it is then there is plenty of downside to come on a correction.  How far could the stock pull back?  Well- its difficult to put an exact number on it – but the area I think it will trade down to is between $200 and $250 a share or somewhere between a 20-35% drop.

Once again- I love Apple as a company but in the short term I think this correction is coming!

Posted by: Dakota and filed under Stock Market Opinion

Celgene  – which over the years has been one of my favorite bio tech stocks has recently broke above some key resistance points and now is sitting just above both trend lines.  You can see in the chart below where it currently sits in relation to the new support lines.  If the overall market doesn’t fall out of bed in the coming weeks then Celgene is poised to make a run at the $68 a share range.  If the market turns down from this level with Celgene sitting on support it could drag Celgene down with it.  The most recent long-term channel support is in the 52-54 area.  Keep an eye on 59.87….if it trades below it the technicals will turn down and a run to the 52-54 area is most likely.

Posted by: Dakota and filed under Stock Market Opinion

The US Dollar has confirmed that all important Island Reversal bottom that I had been talking about in my last few entries.  The bounce in the dollar has put a cap on the equity market and traders are just waiting now for the dollar to make one more push higher and break out above the recent high.  On the UUP (US Dollar Index Bullish Fund) the two recent highs have been 22.70 and 22.72….a move and close above these levels will/should turn the equity market down very sharply.  As of this writing the UUP is trading at 22.60 intraday.  We could easily see a 10% drop in the major averages once this event happens.  The big question is will it happen on this current dollar move or will it pull back again over the next week or two then make another run at it — either way it should happen!

Here below is a 3 month chart of the UUP- you can see 4 days ago the island bottom and the recent rally up from there.

Posted by: Dakota and filed under Sports

What team would have a better chance come playoff time?

Before the season started I was looking at some sleepers in the NFL and what team might make the biggest leap in improvement.  Well, since my hometown team held the Oakland Raiders #1 pick in the 2011 draft (Seymour Trade) I looked first at the Raiders.  Everyone I know going into this year thought that the pick would be a lock delivering the Pats a top 5 pick.  The thought of adding a weapon like Georgia’s WR – AJ Green or Alabama’s RB Mark Ingram was truly not a pipe dream.

I on the other hand thought with a new QB and the removal of the biggest waste of space (on the football field that is) JaMarcus Russell, it might have been the biggest “addition by subtraction” in sports I’ve ever seen.   I actually thought that at the end of week 9 the Raiders record would be just as good as the PATS.  I also thought that scanning the NFL season win totals before play began the 6.5 number that the Vegas odds makers put on Oakland could be a gift if they are as good as I think they can be. I also thought to myself – “If Oakland is going to surprise on the win total why not take them to win the division, the AFC and the Super Bowl”.  Ok, well call me crazy cause I have them for each leg just incase.

Now back to the “What team would have a better chance come playoff time?” question.  Other than the Head Coach and the QB I would rather have the other remaining players on the Oakland roster as a whole than the current PATS one.  Watching Hillis of Cleveland run wild yesterday gave me flash backs of the Baltimore playoff game last year with Ray Rice carving up our run defense.

The Pats are indeed a better team this year than most have thought or if not better has played a bit over their heads.  Oakland on the other hand if not for a missed chip shot field goal against Arizona would be looking even better with a 6-3 record going into the buy week.  If Jason Campbell can settle into that offense – I love the Mcfadden-Bush RB combo, TE Miller and receivers with speed to kill – then they truly do have a better chance than the PATS to go deeper into the playoffs!

Posted by: Dakota and filed under Stock Market Opinion

One of the strongest technical trading indicators that I have seen over the past 13 years of my eye on the markets is what we call an Island Reversal- this is when a stock or index makes a new high or low on either a gap up for new high or gap down for new low on one day then closes trading that day never closing the gap. Then on the following trading day it gaps in the other direction leaving behind an area gap of no trading thus making the previous days trading look like an island.

Well its not 100% confirmed yet that this morning an island reversal is in – we need to wait for how the us dollar closes trading and what type of follow through happens next week but all the early signs are there.  More importantly if this island reversal is confirmed then we should see quite a strong rally in the dollar causing trouble for us equities.

Here is a screen shot of the UUP (US dollar index bullish fund)- see the island of trading yesterday and the rally this morning

Posted by: Dakota and filed under Stock Market Opinion

Ok…so I just want to update everyone on my post from oct 20th calling for a drop, correction, pullback, or whatever you want to call it….This morning after rumors circulated of the extension of the Bush tax cuts by the Obama administration the market surged that one last time I thought it had left — the Dow and SP shot up and tested the 11,400 and 1219 area– at the same time our US dollar dropped to lows that it has tested in 2008 and 2009…..since this market surge over the past year has been pinned to the weak dollar the most likely scenario is that the dollar will now rebound thus causing money to move out of US Equities and commodities will retreat in price.

Some of you are maybe reading this saying that the dollar will continue to go lower and  throw my theory out the window —  well I will tell you this- if the US dollar does break below this 3 year support level it will start to have an inverse effect and cause the dollar and the market to crash and commodities to shoot so high it will kill any type of recovery we might see– all metals – oil and everything else we use to live will become so expensive all our money will be going just to survive as inflation will be so ramp-id that the FED will have to quickly raise interest rates that will cause  a market correction that will have investors running for the hills — housing has still been a problem and not close to bottoming and we need a blow off stage in housing to finally clean everything out.  We could have gone through this blow up stage before but the stimulas package and bank bailouts basically delayed the inevitable…..

Im preparing for a first move down in the dow index to the low 9000 area in the coming months with that huge potential of revisiting 7500 anytime in the next 12-24 months —  Its time to run for cover!

Posted by: Dakota and filed under Stock Market Opinion

Current risk-reward scenarios from this DOW 11,100 area favors the downside

Over the past few years after the market blew up (we can thank investment banks & hedge funds being leveraged at 40-1 and a credit bubble that was a once in a lifetime event) the current rise from market lows has mostly been driving by low interest rates and the treasury keeping a “weak-dollar policy” – they wont admit this but this is what they have been doing.

With the DOW now trading above 11k I don’t see much upside left – maybe one last push into the mid 11k area (11,300-11,700).  Going over the technical indicators we are in the final stages of this huge run.  If this run is truly over the big question now is “how far could we fall?”.   I believe we are in the midst of a two-decade long problem that began circa 1997.  I can easily see us maybe making another run at DOW 7500 – if that happens from current levels that would be about a 32% drop.

You might think that would be a bit extreme but since 1997 we have tested this 7500 area a few times- (1998, 2002, 2003, 2009) and since we are now trading near the top of this 11-11,500 range the probability of us retesting the 7500 area could very well be in the cards anytime in the next few years.  If a 32% drop from current levels is something you can’t fathom then even if I tighten the correction down to the 9000 area that would mean a 10-20% pullback.   Either way you look at it IMO there is only another 5% of upside left in the near term with downside ranging from 10-32%!