Bigger Picture

Island Reversal? Monday”s gap up had extended higher through the morning, only to be retraced back to the open”s gap up. Today”s gap down is indicated to retrace all of yesterday”s gap up. This sequence would form an Island Reversal pattern if the gap down isn”t recovered through the open.

Rallying through the open would destroy the Island pattern. And it would turn a bearish setup bullish. Compare any market index”s opening price to its price 15 and 30 minutes later to determine whether this morning”s action intends to trend up, or down — today”s pattern shouldn”t be flat.

I”ll add post-open observations to this thread in the Activity Feed. Join me there!

Today”s Livedesk reviewed the market”s bigger picture, and three “canaries in the coal mine” that could keep flapping their wings until the market”s corrective bounce is ending. Those are:
TSLA — Must close above 263 to extend its rally, and avoid closing under 257.50.
PCLN — Closing above 1330 would next target 1375, so long as 1300 holds.
NFLX — Resistance at 458 will have held if its reaction down closes under 443.50.

MJ sector stocks, in order of their review, were:
SPRWD, BRDT, MDJN, ERBB, TAUG, TRTC, VAPE, AGTK, GWPH, EAPH, SING, CNAB

View the recording at the link below, and let me know in this thread on the Activity Feed of any other stock charts needing review.
http://new.livestream.com/accounts/7617211/events/2865745

Let”s look at momentum stocks during this morning”s Livedesk. High-profile issues like TSLA, PCLN and NFLX would have us believe they are canaries in the coal mine and everything is fine. For them, it is. But perhaps the gas wasn”t going to reach them until they got a little higher.

We”ll start Livedesk with an overview of the broader market”s bigger picture, and then touch on highlights in the MJ sector. Bring your chart analysis requests, too!

10:45 ET at
http://marketfy.com/product/marijuana-stock-technical-trade-alerts/livedesk/

Friday”s rally has extended higher overnight, to indicate this morning”s open will gap up. That”s half the battle, with the other half being to extend higher after the open. It can be more bullish not to extend higher overnight, especially when the only news is the lack thereof. So, regardless of the opening print, watch the first half-hour for actual direction.

I”ll add post-open observations to this thread in the Activity Feed. Look for a reminder to join me in Livedesk at 10:45 ET.

I opened last week”s issue of The Universe with a single word, the first word that came to mind when reviewing the trend percentages. “Brutal”. Consider this week”s issue “Son of Brutal — The Bloodline Extends“.

Four-week trending percentages changed very little, but there was very little room for them to change. Uptrends had sunk already into single-digit percentages, and that only deteriorated further. The percentage of MJ stocks trending down during the past four weeks increased. While I do not record the number of stocks that fell to support or that broke support, I can report that this number was fewer than in previous weeks. But that”s all based on my subjective analysis, so I hesitate to consider that as the trend slowing.

We review the sector almost every day during Livdesk, so the readings shouldn”t be surprising. But, of the bigger picture support and resistance levels identified below, it is interesting which two stocks are the most noteworthy. One has finally fallen back to long-term support, while the other is breaking its medium-term support.

MDBX — I”ve had a $12 target since launching this service, and MDBX was then trading at $. I loved this stock when it was last at this price… a year ago. My target then was $60, and it went to $100. There has been no accumulative pattern during the decline, and there still isn”t. But support is support, and a “dead cat bounce” should be anticipated at some point.

TAUG — While MDBX”s profile is almost as high as the flagship GWPH, at the opposite end of the spectrum is TAUG. Being much lesser-known didn”t prevent an impressive rally two months ago. But any higher-profile that earned it has yet to prove that it attracted deeper sponsorship. Narrow ranging around .034-.038 ended the week by breaking lower, and that pattern is an opportunity for someone. The break must be rejected almost immediately to avoid gaining traction for undoing the balance of its two-month gain. Rejecting it by snapping back early this week would make this pattern our most bullish. It is meanwhile the most vulnerable.

The broader market is as much a symptom as it is a cause of the sector”s continued weakness. Speculative gains requires attracting speculators instead of driving them away. The MJ sector is somewhat of a canary in the coalmine, in that regard, so its improvement could be a barometer of the broader market”s future.

Enjoy!