TLT: Consolidation, Relative Weakness, and Why the Odds Still Favor Lower Prices

 

Above is a monthly chart of TLT and below it a ratio chart of TLT versus the SPY, and there are a few important things I want to point out. On the TLT chart I’ve marked three major consolidation zones labeled A, B, and C. What’s interesting is that during each of these consolidation periods, the ratio line was trending lower. That tells us TLT was underperforming equities even while price was moving sideways. In each case, that relative weakness eventually resolved itself to the downside, and TLT went on to trade lower in the months that followed.

We’re seeing that same pattern develop again right now at point C. TLT has been consolidating for roughly two years, but during that entire period the ratio line has continued to trend lower. To me, this is a clear message that money is still leaving the bond market and flowing elsewhere. Sideways price action can fool a lot of people into thinking a bottom is forming, but when relative strength keeps deteriorating, it usually means the market is just pausing before the next leg lower. Based on this setup alone, lower prices in TLT would not surprise me.

The next chart I want to talk about is a monthly chart of the 30-year bond futures, with the Commitment of Traders data shown in the lower pane. The red line represents commercial traders, while the blue line represents small traders. Historically, commercials tend to be on the right side of major moves, while small traders often get positioned incorrectly at key turning points. Right now, the commercial traders’ short position is at levels that have coincided with notable bond market sell offs in the past. You can see similar readings in the summer of 2012 and again in 2016. In 2018 we saw another sell signal, although that move turned out to be more modest.

The key takeaway is that commercials are flashing a sell signal, not a buy signal. There’s been a lot of talk on social media about record short interest in TLT, and that lines up with what we’re seeing in the commercial positioning. At the same time, small traders are very long, and they have a history of being heavily long near market tops. I know many investors are hoping 2026 will finally be the year bonds stage a meaningful rally, but based on the evidence right now, the odds still favor another move lower.

For more analysis and market insights, visit my homepage 

TCNNF Emerges as a Cannabis Leader on Relative Strength and Record Volume

 

Above is a monthly chart of TCNNF and below that a ratio chart of TCNNF versus MSOS, and this is exactly the kind of setup I like to pay attention to when evaluating leadership within a sector. I don’t just want to know how a stock is performing against the S&P 500, I also want to see how it stacks up against its own industry. Comparing TCNNF directly to MSOS gives a much clearer picture of whether this name is attracting capital relative to its peers.

What really stands out to me here is the ratio line. TCNNF versus MSOS has pushed to an all-time high, which tells me that this stock is outperforming the broader cannabis ETF on a relative basis. That’s an important clue. In any sector, there are always leaders and laggards, and money tends to flow toward the names showing persistent relative strength. Right now, TCNNF is clearly acting like a leader.

Another notable development is volume. December’s monthly volume came in at an all time high, which is not something I ignore. When I see record volume occurring alongside relative strength, it often signals institutional participation or at least growing interest from larger market participants. Volume is the fuel behind price, and expanding volume at key moments can foreshadow meaningful moves ahead.

From a longer-term perspective, this combination of relative strength and volume expansion is exactly what I want to see when building a watchlist. It doesn’t guarantee higher prices in the short term, but it does suggest that TCNNF is being accumulated.

If you’re bullish on the cannabis space and looking for potential leaders rather than just exposure to the group as a whole, TCNNF is a stock that deserves a spot on your radar.

For more analysis and market insights, visit my homepage 

TLRY May Be Turning the Corner as Seasonality and Price Action Line Up

 

As many of you know, I’ve been stalking TLRY and the rest of the cannabis space for an opportunity to add to my position, and after Friday’s action I think TLRY may finally be starting to turn the corner. I’ve been patient with this group, waiting for price to tell me when the risk starts to shift back to the upside, and we may be getting that signal now.

If you look at the daily chart of TLRY on the left, you’ll see that price appears to be bouncing right off the gap I’ve outlined on the chart. That area has acted as a reference point for me, and seeing buyers step in there is encouraging. On Friday we also saw a slight expansion in volatility along with a modest uptick in volume. It wasn’t anything dramatic, but it was enough to suggest that selling pressure may be easing and buyers are beginning to show some interest.

Turning to the weekly chart on the right, there’s a pattern that continues to stand out. TLRY has a tendency to pull back for roughly two weeks before making its next push higher, and that rhythm seems to be playing out once again. Last week’s range contraction makes sense as well, especially with the holiday shortened trading week. Quiet weeks like that often set the stage for a more active move to follow.

What I’m watching closely now is how TLRY behaves this week. Ideally, I’d like to see the stock take out last week’s high at 9.85, and I’d want to see that happen with expanding range and increasing volume. That would go a long way toward confirming that momentum is shifting.

Seasonality is also worth keeping in mind. Historically, cannabis stocks tend to perform well during January and February, which adds another supportive layer to this setup. Now it’s simply a matter of staying patient and seeing how things unfold from here.

MSOS Setting Up for a Bigger Move After Weekly Inside Bar

 Above is a weekly chart of MSOS, and I want to focus on the inside week that has just formed. Inside bars have always caught my attention because they often show up right before an expansion in volatility. Markets don’t stay quiet forever, and periods of tight consolidation usually lead to a larger, more directional move. That’s exactly why I think this setup deserves our attention right now.

An inside week tells us that neither buyers nor sellers were able to take control. The range tightened, emotions cooled, and energy started to build beneath the surface. At some point, that compressed range gives way, and when it does, the move can be meaningful. In this case, the high of the candle just prior to the inside week comes in at 5.01. For me, that level matters. If we see MSOS trade 5.02 bid, I think that could be the spark that ignites the next move higher.

Adding to the bullish case is the seasonal backdrop. Historically, this time of year tends to be favorable for the cannabis space, and that bullish seasonal could assert itself at any moment. Seasonality alone isn’t enough to take a trade, but when it lines up with a technical pattern like this, it certainly adds weight to the argument.

Of course, nothing is guaranteed. There is always the risk that the broader market rolls over and pulls everything lower, possibly leading MSOS to attempt to fill the gap on the daily chart. That’s a scenario I’m keeping in the back of my mind. 

What really stands out to me is that this compression isn’t just happening on the weekly chart. We also have an inside day on the daily chart, which further reinforces the idea that a move is coming. When multiple timeframes line up like this, it often leads to action sooner rather than later.

Now it becomes a game of patience. I’m watching the range, I’m watching volume and relative strength, and I’m staying focused on that 5.01 level. Let’s see which side shows its hand first and where the volume takes us from here.

For more analysis and market insights, visit my homepage 

Why NFLX’s Relative Weakness Could Signal Lower Prices Ahead

 

About a month ago I posted about the potential weakness developing in NFLX, and since that time we’ve seen the stock move lower. Now, as I look at the charts again, I think there are fresh signs that this weakness may not be finished yet.

Above is a daily chart of NFLX, and below that is the SPY for comparison. One of the most important things I always look for is how a stock behaves relative to the broader market. From points A to B on the chart, the SPY pushed to a new high, signaling continued strength in the market. During that same period, however, NFLX was unable to make progress. Instead of confirming the market’s strength, the stock moved sideways, carving out a tight consolidation range.

That type of action is often an early warning sign. When the market is strong but a stock can’t participate, it usually means sellers are quietly distributing shares. Now we’re starting to see that consolidation resolve to the downside, with NFLX breaking lower in a way that closely resembles the relative weakness we saw back in early December.

From here, I think the risk remains to the downside. The next key area I’m watching is the psychological $90 level. If NFLX cracks below that level, I believe lower prices are likely in the days ahead, especially if the market begins to lose momentum as well.

This is another good reminder of why relative strength analysis can be so valuable. It often gives us clues about future price direction well before the move becomes obvious.

I’ll continue to monitor how NFLX behaves versus the SPY, as that relationship should tell us a lot about what comes next.

If you’d like to revisit my original analysis and see why NFLX first appeared on my radar, you can read my earlier post here.