Bigger Picture

I”m starting to see a little nibbling here and there. Nothing yet that is much more than anecdotal, if that, let alone evidence of a bottom. It might not last, but a low would be substantial.

Recall that two weeks ago today on April 15 was carnage. And not just for the marijuana sector, which had been sinking for weeks. The broader market finally reversed down hard, losing 4% in just over a week.

4%? Lightweight.

Broader markets and the marijuana sector hit lows into and out of that day. My publishing that night for the next session was very much based on the potential for that to have begun forming a bottom. In fact, many components of the sector rallied from there and have yet to retest that day”s lows. 

Not for lack of trying. Many that rallied have retraced quite a bit, some entirely.

As warned then, the rising tide wouldn”t lift all boats. Some issues have extended down to lower lows, and some only today are probing prior lows that were barely threatened two weeks ago. Are these signs of another big downleg coming? Perhaps. Often, however, this is simply the inverse of an extended rally whose leadership is rotating into the laggards — the downside “leadership” may be overdone.

I”m producing a lists of Bottom Fishers and Falling Knives with their extreme price potentials to be ready for any initial follow-through tomorrow. The goal is to catch the rubber band before it has snapped back.

If this isn”t just a retest of the prior low, then things might not get much worse near-term. But the stock-picking would still be key.

Livedesk at 11:00 ET:
http://marketfy.com/product/marijuana-stock-technical-trade-alerts/livedesk/1129/
or follow the link on site”s left sidebar.
New subscribers, “Livedesk” is a chat/video combination during which we review charts of today”s price action. See you there…

Welcome to Open”s Interest for Tue Apr 29 2014
What a day Monday. What a wild and varied day. GWPH was granted fast track and still fell relentlessly from its opening opening tick. Our first “Rocket Launch” pick SPLI surged. We kicked out a stock that had long worn out its welcome. And the broader market came back from a big intraday sell-off.

ATTBF and EDXC were weaker, but within their range. ENRT has probed sub-30, so we”ll be looking at Tuesday”s open for any strength to justify holding it any longer. Monitoring GWPH for re-entering short.

Pullback Limit
(breakouts and bounces that have retraced 61.8%…
these situations are often make, or break)
CBIS .095 pullback target, .914 stop, .155-.16 target

Bottom Fish
(basing after extended decline — not really a “trade”)
(breakdown unconfirmed a 2nd day — only buy strength)
CBGI .06 resistance, .045 stop, .094-.125 target
VAPE monitoring

Third-day Surge
(2-day surge to fresh highs at risk of peaking — don”t chase higher)
none

Not a Charm
(third test of retested low — lower lows coming?)
ZDPY Probing fresh lows, 2.75 target, 6.20 stop

Falling Knife
(trying to catch the reaction to a steep drop — ouch)
PHOT .135-.175 pullback target, .33-.37, .175-.19 stop

Rocket Launch
(sudden explosive interest that gained traction)
none

Livedesk. Be there, 12:30pm ET, pass it on…
http://marketfy.com/product/marijuana-stock-technical-trade-alerts/livedesk/1129/
or follow the link on site”s left sidebar.

GWPH — FDA has fast tracked Sativex for treating cancer pain. Great news for the company, not for our short. We shorted it from a range whose internal resistance is 70.55-71.50. The stock opened pre-market at 70.50, rose to 72.30, and has since pulled back as low as 69.29.

Opening under 68.95 would suggest this type of news was discounted already by last week”s rally, and that its knee-jerk reaction up will melt away intraday. Opening above 69.50 might still be at risk, but I would rather not be exposed to another updraft intraday that could prove to be much more substantial.

Check this post”s comments thread into and out of the open for my updated observation. And a Trade Alert will be sent automatically if I cover.

SECTOR — Today”s news on GW is probably more significant for the rest of the sector. It broadens what I noted last week, that Morgan Stanley”s opinion on GW reinforces the investment sector”s interest in the industry. FDA has just reinforced the industry”s legitimacy, to the degree that its actions can do that. The sector”s April 15 low is looking increasingly better.