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Turnaroud Tuesday: Did Canna Finally Bottom?

November 12, 2024

Mish's Daily

By Mish Schneider

This story came out today about Trump’s potential policy on cannabis.

The statement by Chris Christie:

When I was asked about the election, I talked about 3 commonalities among both candidates.

Bitcoin-maybe the market perceived Trump as more bullish, but I saw bitcoin rising as the normal 6-month delay after a halving which reduces supply.
Onshoring-yet to be seen how Trump approaches this besides deportation and tariffs, but both parties have desired more production within the US.
Cannabis-I believe both parties realize that with 41 states legalizing medical cannabis at least, it is inevitable to not only reschedule it, but also start making some real money in the industry.

Therefore, I am not too surprised to see Chris Christie’s statement.

MSOS rose over 14% in today’s session.

Interestingly, the price action was inside the trading range of Monday.

So, while MSOS bounced, did it actually bottom?

My absolute favorite trade is when I am keen on an industry or trend, and I have a chance to buy it after a huge crash a lot cheaper.

Druckenmiller said he likes to start investing when he sees a trend 12-24 months before it happens.

That’s me too.

So, if MSOS bottomed today here is what I will look for:

Strong volume-yes, both Monday on the way down and Tuesday on the way up, volume was huge
A new low then an inside day followed by a close the third day higher than the day a new low was made. We do not know this yet
A mean reversion in momentum and/or leadership- we saw one in leadership (see chart) but not in momentum.

If we can get all things to line up, Wednesday takes out Monday’s high, momentum goes to a mean reversion and the volume patterns continue to come higher than average..

A gift.

Nonetheless, always have a plan.

Educational purposes only, not official trading advice.

For more detailed trading information about our blended models, tools, and trader education courses, contact Rob Quinn, our Chief Strategy Consultant, to learn more.
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Coming Up:

November 14 NYSE TV

November 14 WealthWise with Jordan Kimmel

November 15 Maggie Lake

November 18 BNN Bloomberg

November 21 BFM Radio Malaysia

November 22 Financial Sense with Jim Pupluva

December 5-7, 2024 Money Show Master Class