MJ: Mary Jane’s Last Dance, Global Stocks +$50 Trillion Since Pandemic, Microcap And Penny Stocks, UBER Earnings

Tesla (TSLA), GameStop (GME), Bitcoin (BITCOMP) and now Marijuana Stocks ETF (MJ). We’ve experienced a succession of mini-bubbles that I’ve never seen before. The current one is the rage for marijuana stocks which can be seen in the performance of the sector’s main ETF, MJ, which holds popular marijuana stocks like Tilray (TLRY – 20.44% of the ETF), Aphia (APHA – 14.40%), Canopy Growth Corporation (CGC – 7.07%) and GW Pharmaceuticals (GWPH – 6.13%).

Its creators cleverly chose the ticker MJ which stands for Mary Jane which is slang for marijuana. Well Mary Jane has been smoking this week up 42% Monday, Tuesday and Wednesday, including 15% Wednesday on almost 7x three month average volume. When the chart goes parabolic it’s usually time to sell so I’d expect a nasty shakeout sometime soon. Short term technician and trading wizard Scott Redler, who has played the move in marijuana stocks, thinks “it’s time for a pause”.

Marijuana stocks aren’t the only sector of the market investors are speculating in. In general, the smaller the stock, the riskier and investors have moved into microcaps and penny stocks. The iShares Microcap ETF (IWC) is +165% since March 19, 2020 and is now an insane 54.61% above its 200 DMA.

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William K. 2 weeks ago Member's comment

Quite an interesting analysis indeed. Thanks for the insights. But unless I do not understand the numbers it seems odd to equate a decrease in profits to a loss. That has been a puzzle for a while. Certainly some things do not generate as much profit as they had in the past, or as some optimist predicted, but a lower profit does not equate to a loss as I see it. Certainly it could be a failure to meet predictions, but not an actual loss.