MSOS Déjà Vu… Until It Wasn’t

 Well, it’s like déjà vu all over again. MSOS opened and sold off immediately, just like yesterday and the day before. Above is a 2-minute chart of MSOS with the SPY in the lower pane for comparison. I’m using a 2-minute chart here because I want to show more detail, but honestly you’d see the same thing on a 5- or even a 10-minute chart, the message doesn’t change.

At the open, both MSOS and the SPY sold off into point A. Nothing surprising there. Then the SPY managed a small bounce before rolling over again and making new lows at point B. That’s where things got interesting. Instead of following the market lower, MSOS held up. Not only did it refuse to make a new low, it actually put in a higher low and began curling higher, threatening to take out minor resistance.

That’s relative strength, folks (on a small scale) and it’s something we simply haven’t seen out of MSOS over the past week. That divergence was enough to get me long for a day trade. I wasn’t expecting fireworks, and I didn’t get them. MSOS only rallied about a dime from my entry, so nothing great, but I’ll take it. In a tape like this, even small signs of strength are worth paying attention to.

Zooming out to the daily chart on the right, the bigger picture if getting a bit oversold. This marks the fourth consecutive lower high, so the intermediate trend is clearly still down. That said, today’s candle left a noticeable bottoming tail after flushing below the $4 level and then reclaiming it.  We also came very close to filling the downside gap, which often matters when you’re looking for at least a short-term bounce.

I’m not about to declare this the bottom, more like a bottom. If we can take out today’s high around 4.24, I’ll look to get long for a tradable bounce. My core position remains intact; this would simply be a separate short-term trade.

For now, I’m watching and letting the market show its hand. Let’s see how things unfold.

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TLRY… are you kidding me?

 

This felt like a straight up replay of yesterday, only worse. Above is a 5-minute chart of TLRY, with MSOS in the lower pane for comparison, and from the opening bell the tone was already familiar. At point A, TLRY opens and immediately sells off hard. No hesitation, no attempt to find its footing, just straight down, almost identical to what we saw yesterday. Right away I’m on alert, because when a stock can’t even hold the open in a supposedly bullish environment, that’s information.

Then around noon ET the headline hits. The news sends MSOS ripping higher, pushing to a new intraday high at point B. This is where I’m watching very closely. If TLRY is healthy, if it’s truly participating, this is the moment it should respond. Did it make a new high? No. Instead, it stalled and rolled over, printing a lower high. Instantly my focus shifts from optimism to defense. Relative weakness. In my head I’m hearing, “Danger Will Robinson.”

About an hour later, MSOS does it again. Another push to a fresh high, another opportunity for TLRY to confirm. And once again, TLRY fails. Another lower high. At that point there’s no ambiguity. I’ve seen this movie too many times before, and I know exactly how it ends if support gives way. When the ETF is making higher highs and the individual stock can’t keep up, sellers are in control whether I like it or not.

Here’s the part that stings. I’m long TLRY. I’ve been holding shares since last summer, and emotionally that matters more than it should. But being long doesn’t give me a free pass to ignore what’s right in front of me. So I do what I know I’m supposed to do. I place a sell stop on one-third of my position, right below support. This isn’t me flipping bearish on the whole thesis, it’s me respecting risk.

Not long after, TLRY breaks the low, triggers my sell stop, and from there both TLRY and MSOS sink into the close, finishing basically at their lows. Confirmation, unfortunately, came fast.

What frustrates me the most is that about 90% of my trading is based on pure technical signals. I live in volume. I rely heavily on relative strength, cycles, and clean support and resistance levels. Fundamentals are great to have as a backdrop, but technical analysis is what actually drives my decision making. And yet here I am, getting emotionally tangled up in the rescheduling narrative and letting that override signals that have been flashing sell for days.

The result is that I’ve given back a significant chunk of the profits I built up after buying these stocks last summer. Even though I’m still slightly positive overall, it feels like I’ve lost a ton of money. That’s the psychological trap, giving back gains hurts just as much, sometimes more, than taking an outright loss.

The chart didn’t lie. I just didn’t want to listen.

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The Gap Is Filled, but the Frustration Remains

 

Well, we finally got it over with, TLRY filled its gap at 8.43. Being long this stock, that’s obviously not something I was hoping to see, but at the same time I’m glad the market dealt with it now instead of dragging it out. Open gaps have a way of acting like magnets, and once they’re filled, at least that question mark is removed.

On the left above is a 5-minute chart of TLRY. The stock opened flat and then quickly sold off, tagging the gap fill around 8.40. After that initial move lower, TLRY pretty much went nowhere for the rest of the session. We saw a lot of sideways action, very little momentum, and the stock ultimately closed right near its low. That kind of price action tells me there’s still no real urgency on the buy side, at least in the short term.

If you shift over to the daily chart on the right, you can clearly see the gap that was filled today. From a pure technical standpoint, this is actually an area where you could see a bounce or even the start of a rally. Gap fills often mark logical inflection points. The problem, as usual with this sector, is the lack of a catalyst. Right now, no news is bearish news, and that’s exactly why we continue to see the entire cannabis sector drifting lower in what feels like a slow, painful bleed.

We’re down to just three more trading days left in the month of January, and it would be great to finally hear something concrete regarding the finalization of rescheduling. That’s the overhang everyone is waiting on, and until we get clarity, it’s hard to see aggressive buying step in.

That said, I want to be clear about my mindset. I’m in this trade for a longer-term move. I still believe the fundamentals favor a bull market in the cannabis sector, and I’m willing to sit through short-term noise to be positioned for that. In the near term, though, I’ll be the first to admit this has been extremely frustrating.

For now, all we can do is stay patient, manage risk, and see what tomorrow brings.

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When the Leader Stops Leading: A Key Level I’m Watching in Silver

 

As we all know, gold and silver have been enjoying an explosive rally for quite some time now, and without question silver has been the leader of the move. When a trend is strong, I always want to be aligned with the strongest name, and silver has fit that bill perfectly. That said, I’m now starting to see signs that this rally may be getting a little tired. I want to be very clear here, I’m not calling a top. What I am seeing is the potential for a pullback, and that distinction matters.

Above is a 60-minute chart of silver futures, and in the lower pane is gold. Right now, gold is pushing to a new swing high, but silver is not confirming that strength. Instead, silver is making a lower high. That’s classic non-confirmation, and when the leader stops leading, it’s always worth paying attention. This is potentially bearish, and I emphasize potentially because, as of now, there are still no actual sell signals.

When I zoom out to the daily chart of silver, another important detail stands out. We recently saw a very heavy volume day, yet price has been unable to move above that day’s high. Heavy volume often marks an inflection point, either strong continuation or the start of distribution. The fact that silver is stalling below that high tells me buyers may be losing some urgency.

So here’s how I’m planning to play it. I’m not interested in guessing. If silver turns lower and takes out the low of that heavy volume day, I will look to short. That level comes in at 101.70, and a break below it would be my confirmation that sellers are taking control, at least in the short term.

On the flip side, if silver regains its strength and rallies to make a new high alongside gold, then all bets are off. In that scenario, I have zero interest in shorting silver. It’s very possible that silver resolves higher, which is exactly why patience is critical here.

For now, I’m letting price tell the story. No anticipation, no prediction, just waiting for confirmation. Let’s see what happens.

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Rare Earth Stocks Show First Signs of Relative Weakness

 

Today was a very interesting day for the rare earth stocks, mainly because it marked the first real bout of relative weakness we’ve seen in weeks. After a strong run higher, I think it’s important to walk through today’s action and talk about what it may be signaling going forward.

On the left above, I’m looking at a 5-minute chart of REMX, the ETF that tracks the rare earth space. In the lower pane is the SPY for comparison. Right from the open, at point A, we got our first clue that something was different. The SPY rallied straight out of the gate, yet REMX was selling off. When the broad market is pushing higher and a leading group can’t participate, that immediately gets my attention. That divergence is often the earliest sign that sellers are becoming more active.

At point B, the relative weakness became much more obvious. While the SPY was making new highs, REMX was only able to put in a much lower high. That’s a textbook example of relative weakness. It shows that buyers are no longer willing to chase price in this group, even as the overall market remains supportive.

Once short-term support was broken, selling picked up and continued pretty much into the close. There was no meaningful attempt to reclaim those levels, which tells me this move wasn’t just random noise.

Looking at the daily chart of REMX on the right, volume really stands out. Turnover was heavy, suggesting this was more than just light profit-taking. At the same time, the group was a bit overextended after its recent advance, so a pullback here shouldn’t come as a surprise. Strong trends often need time to reset.

Several individual names in the space felt the pressure today, including CRML, METC, TMC, and MP. In the longer term, I still think these stocks look constructive. Today’s action doesn’t change the bigger picture for me, but it does suggest that near-term, it’s probably pullback time.

If we do see continued weakness, I’ll be looking at that pullback as a potential opportunity rather than a reason to abandon the trade. I’ll be watching for support to form and for relative strength to reappear, with the goal of getting long again in the days ahead.

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