Bigger Picture

Good morning! Happy New Year! The stock market is imploding!

The last two days of 2015 declined in a not-small way. Now 2016’s first day is being greeted by a record-sized decline already underway overnight.

Where does that put the market? Well, basis the S&P 500, the drop has now retraced all the way back down to its two-week old lows. That’s how much cushion the “Santa Claus” rally had provided.

The drop’s trigger is purportedly China crashing. An emotional reaction is deserved. Meanwhile, closures among Middle Eastern embassies are clarifying the division between Iran and Saudi Arabia, which probably doesn’t help.

The rule for today is that exiting the weekend with extreme sentiment is often a sentiment extreme. That’s not to justify buying the first tick, only to monitor whether the first hour has made things worse, or better.

We’ll take special interest in any January Effect candidates that end the day in positive territory. But let me know in the comments section of any other stocks of interest.

[Note: I publish “The Universe” every weekend, updating my support and resistance calculations for Marijuana sector stocks. It is not a projection, but a handy reference… Non-Marijuana stocks are covered elsewhere during the week.]

Happy New Year! The moment of truth is upon us. To what degree were some Cannabis sector stocks pushed down or held back into year-end due to tax loss selling?

Those pressures are done. So, stock patterns matching the January Effect characteristics should start rising, if only because demand has less supply that it must absorb. Stocks that don’t rise this week are suspect.

The optimal January Effect candidate already bottomed into or out of Thanksgiving. Perhaps it blipped-down momentarily to a fresh low during December, but it’s already firming. Nevertheless, following are five new candidates to start the year:

CANN above .65 could rally 50%, but expanding volume is a must… CANV volume is already expanding into a 65% bounce last week, and above .29 could double from there… CARA needs to follow-through immediately on year-end strength to prove its corrective phase has ended… MINE has been sneaking higher since Thanksgiving’s low, and is vulnerable to suddenly surging on expanding volume… RMHB basically doubled since noon Wednesday and volume is attractive, so almost any follow-through could double again.