Origin House (fka ORHOF)

[CornellEngineer]

This is exactly what I was afraid of when I made my post before the opening bell on Monday and why I closed out several positions last week.

The term "market crash" is a bit vague and nebulous...kinda like "Indian summer" in weather or "stretch drive" in baseball. But it is frequently defined as when stocks drop 50% or more from some previous high. Many of the MJ stocks made intraday all-time highs last week or at least posted near-term highs. I took a quick look at a few pot stocks that are either the biggest ones out there or ones I have been swing trading the last 6 weeks and looked at how much they've fallen since they made those intraday highs (most of them on Oct 16th)...

Symbol: High / Today's Close = % Drop
CGC: 59.25 / 37.76 = -36%
AUR: 12.53 / 7.39 = -41%
CRON: 13.00 / 7.63 = -41%
HYYDF: 7.17 / 4.23 = -41%
OGRMF: 6.68 / 3.82 = -43%
APHQF: 16.19 / 11.27 = -30%
CNTTF: 11.97 / 7.73 = -35%
ORHOF: 7.00 / 5.14 = -27%

So we're not too far away from it being a sector-wide "crash" in my book. Another day or two like the last several and we're there.

I would not be at all surprised if by the time we finally pull out of this death spiral we're now in and mercifully bottom out that many of these pot stocks will end up right back where they started before the August 15th liftoff or pretty close to it.

At this point the only question in my mind is if the rate of descent will finally slow down a little and we then slowly grind down toward whatever bottom we're eventually headed for (with perhaps a few sucker rallies and head fakes thrown in for fun) or whether the freefall will continue for a few more days and we overshoot and get a dead cat bounce.

Short sellers made almost half a billion bucks the last 2 days alone and IMO there's probably more to be had before it's all over and we're back in a trading range again, wherever that ends up being. Hope I'm wrong about this hypothetical scenario of mine and we'll find out soon enough but in the meantime a tip of my cap to the bears.

"We who are about to die salute you!"