Bigger Picture

CORRECTION: Today”s Livestox will be delayed until noon ET… Sorry for the confusion. I”ll repeat the announcement before then. Meanwhile, continue posting requests in the thread below.

This morning”s Livestox starts at 11:00am ET.
Login info: (iPads and Tablets use the accompanying teleconference info to get audio.)
https://roddavid10.mitel-nhwc.com/join/pcxsrhm

optional teleconference instructions (required for iPad and tablets):
1-605-562-0020
Meeting ID 976-912-682 #
Other requirements can be found here:
http://marketfy.com/product/stock-technical-trade-alerts/blog/1143/view/60141/

There”s a lot of action. It”s almost a repeat of January 2014, as the marijuana sector puts in double-digit gains while the broader market deteriorates further below recent highs. But it”s a little different this time, in that the NJ sector”s gains come from being full of laggards, and a lot of their selling pressure motivation just expired on 12/31.

We”ll review those and other stocks of interest — including your instant chart analysis requests — during this morning”s Livestox.

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.]

Links to || Last week”s Universe || Prior week”s Universe || Previous week”s Universe ||

Happy New Year! At least, for this sector, happy start to the new year. Only 2 issues required calculating new lower supports due to closing under their previous supports. Several other supports were being tested, but holding. And 5 issues required new resistances for having closed above theirs. 

Meanwhile, the number of 4-week rolling uptrends returned to 9. It had dropped to 6, from 9. And two of those recoveries were borderline, being spikes up — one being a sub-penny. 

So, the breadth isn”t quite there to justify calling it accumulation. But the timing does seem to confirm our expectations that the relentlessly persistent (persistently relentless?) declines may have become driven by 2014 tax loss selling.

As a reminder, be careful getting too enamored too quickly by sudden surges. And be clear-minded on what constitutes a downtrend, in which the vast majority of this sector remain. We”ll look at examples during Monday”s Livestox.

This sector won”t have another “rising tide that lifts all ships.” Nor would we want that, because January”s laggards will have to explain their legitimacy a little better.

An interesting start to the new year. The broader market extended its decline to levels that could be the lower-end of a trading range. That would allow (if not actually foreshadow) rotation into the laggards as I described in this morning”s blog post. Indeed, there were quite a few double-digit pops among Marijuana stocks (E.G. GBLX, CBIS, NRTI, GRNH, HEMP, ENRT) that weren”t otherwise in motion before today. Those area examples, and not picks, but nonetheless potentially representative of pent-up buying pressure. The question is whether today”s surges already expended it all. Enjoy the weekend!

Will there be a January Effect this year, or not? Usually, selling pressures begin diminishing among lagging stocks around Thanksgiving. That is displayed in the form of firming prices, which then attracts actual buying pressure before Christmas.

Often, when laggards have been lagging relentlessly into Autumn, the anticipation for a Thanksgiving bottom can trigger a Halloween rally. Coming so much earlier allows time for another low, and another year-ending rally.

Rarely is there no discernible rally before New Year”s Eve, which was the case last year (i.e. 2014). A likely culprit may have been the extended rally that continued benefiting its leadership. In other words, who needs to bottom-fish the laggards when the leadership is still so strong?

Well, we”ll soon see.

Perhaps the ongoing rally has been produced by little more than quarter-end portfolio window dressing. That influence is as done as year-end tax loss selling pressures. Wednesday”s year-ending tumble might have been the early warning of rotation that can finally benefit lagging stocks — before the broader market can reverse its trend down, its choppy ranging allows lagging stocks to start outperforming.

That”s the template which we”ll be comparing to actual price action. Relentlessly beaten-down stocks. This weekend I”ll broaden the list of January Effect candidates based on today”s performances coming out of the gate. I”ll also be introducing general stock picks, including a short-sale focus that could become very handy soon.

Today is only the year”s first session, and I already see signs of low participation. Try not to force a trade — there will be plenty of opportunity.