Ok, Big Read. No bias here. Hoping this helps someone. I’m not going to try and tackle all these what-if scenarios – I can identify only with those items that can be validated. Theories and assumptions are driven off emotions and imposed beliefs – I’d rather avoid those at all costs.
Note: The below 1 – 5 is reflected with a starting point of October 16th (unless otherwise identified with another starting date)
1. Nasdaq Composite was fighting to get out of bearish correction territory; today it’s back in correction with a major sell off.
2. Dow Jones Industrial had a major sell off and fighting to get out of bearish correction territory; today major sell off and ready to retest correction territory if the 23550 area doesn’t hold.
3. Mid-Caps 400: In correct as of October 10th and has remain in correction up until today. That’s huge.
4. Nasdaq 100: Major sell off leading up to October 16th; has been in correction (mostly) and is still there today with a huge sell off.
5. NYSE: ($ACB is part of this): Been rolling over since late September, sold off with major momentum in October, dead-cat bounce in November and sold off very-very hard today. Has been in a bearish correction since early October.
You can begin to see the theme here, right!?!
Not going to list all of them; however, you can see the pattern here! The markets are extremely weak. Yes. The markets have had their pops here-and-there and the talking heads (on CNBC) going crazy as if the market has fully rebounded, but IT HAS NOT!!! 80%-90% of the stocks in these markets (mentioned above) and the sectors that make them up are in bearish correction territory. TECH and APPLE are leading the way down. After-all, they are the one’s who helped lead the major rallies. BIG MONEY has been rotating out of Tech and into safety plans like Utilities, Consumer Staples and Read Estate. These are the areas in the market that are doing the best; however, don’t carry nearly the weight of the big techs. Especially with Apple falling, interest rate hike fears, strengthening dollar, and fear about oil productions.
Now to add another layer to the above, let’s keep in mind what has been happening with cannabis. WE ALL KNOW that TLRY had enormous runs due to the viscous buying, reduced number of shares available by brokers to short, and a very small float. Small floats and extreme buying lead to huge up-swings, but the same can be said about the selling and falling. Short sellers, at the time, we’re forced to buy-back their shares the same day of the position – causing additional buying momentum – at least until the Market Makers could get the pricing under control with the Options Markets – again, it caught the Market Makers by surprise and they weren’t about to miss out on any more gains. After-all, they make their money off the spreads and commissions.
OK… $ACB is sitting in bearish correction territory, while the others (including the ETF) are not. HOWEVER, they are within a thread of falling into this bearish area. LONG-TERM outlook is the cannabis stocks need to acquire more aggressive buying pressure to not only force short covering (because right now they do not see any threats) and to show the investment world that cannabis is not some pump-and-dump market sector. Too many investors are focused on all these press releases and holding onto every single article posted by various outlets. This is ALL NOISE…!!!! The noise is what causes investors and traders to become complacent, emotional, second guessing yourself, and falling into the psychology of imposing personal beliefs – when they should be taking profits and/or cutting losers short (not holding forever through all the cyclical swings).
Remember that this price action is bigger than just $ACB and the company cannot be blamed or accused every time stock goes down or doesn’t move fast enough. Need to look holistically at what is happening in the BIGGER PICTURE, then understanding how the indices are moving, or not moving. And cannabis movement as a group. In addition, understand how healthcare is acting, since cannabis stocks fall under that sector.
Cannabis must gain strength and bullish volume in-order to gain some ground. They must avoid being in bearish correction territory. Until these happened, cannabis is nothing more than a short-seller and day/swing trader paradise, which I don’t mind; however, many are not accustom to that environment or have enough in their accounts maintained to avoid the FINRA Day Trading Rules.
Don’t get lost in the small price swings. Take a step back and re-evaluate your position and outlook. If you’ve become complacent cut the loses to avoid driving yourself crazy. You CAN ALWAYS buy back. But you can also hold or even continue to average down (but keep in mind that adds additional money at risks). I really hope this was helpful to someone. Just stick to your trading plan; avoid the noise.
I'll be on the board here and there, but going to limit my interactions as it's taking up too much of my time from watching the markets.
Always have a trading plan in place. Avoid the noise on the boards and focus on protecting capital and following your trading plan.
