I’m sure many investors are still “High” on marijuana stocks but I think reality may be setting in for those that didn’t expect pot stocks to crash. I knew they would crash as as this new industry turn into a mania instantly. This ETF is showing the way and today HMMJ has created another spike to the downside. A correction may come but this market decline is far from over. I think the industry also has it shares of crooks as they just love to take advantage of the emotion. Many big companies have also crashed and the only people that made any money are the ones that participated in any of the IPOs. I will never turn bullish on this sector until all the ETFs and stocks have been crushed, and even then there is no guarantee they will go anywhere.
The wave count is more like a diagonal which is normal for anything commodities related but they are a bit smoother set of waves. Sure, the price has come down to the point where the Gold/HMMJ ratio is at about 80:1. The most expensive Gold/HMMJ ratio at one point was 49:1 in September 2018.
The dirt cheap ratio was 150:1 so we have a long way to go before this ETF turns real cheap. It may never return to the 150:1 ratio but we may catch it if it keeps heading into a ratio price brick wall.
I don’t have the time or don’t want to spend the time, tracking this ratio as I have a data base of over 28 ratios I’m already tracking. I updated most of them today while US markets were closed.
The potential start of a 5 wave run in Minor degree would match the stock markets wave count as well. I doubt that this will finish this year as it could stretch into early spring 2019.
I think many companies will disappear as margins are going to be razor thin with huge start-up costs involved as well. Then the biggest con of all is that there is a shortage of pot! Yeah right! The dispensaries in Vancouver never shut down. They’ve had their licenses for a few years already and never missed a beat waiting for the rest of Canada to wake up.
If the legal markets can’t supply inventory just yet, then the black market will always come to the rescue.