SPYs

S&P 500 Short-term – As expected, the SPYs found support around $270 and ran into resistance around $280. There is resistance around the $280 level because it was resistance in June and support in July. It was also resistance in February and March. There is support around the $270 level because it was support in May and June. The low trade on October 11th was at $270.36. These levels will probably continue to be support and resistance in the short-term.

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S&P 500  – After breaking the $286 level the SPYs saw some aggressive selling.  The first level of support in the selloff was right around the $280 level.  This level is now resistance because it was resistance in February, March, and June.  It was also support in July and August.  There is support around the $270 level because this level was support in May and June.  There will probably continue to be resistance around $280 and support around $270 in the short-term.

Weird action in the financial and materials sector...

There has been some strange action in the financial and materials sectors over the past few weeks. Since September 18th, the day the SPYs made an all-time high, both sectors have been in a free-fall. They also traded up and became overbought in the days just before. I’m not sure what happened here. My guess is that there were some hedge funds that were underweight these sectors and some kind of program kicked in when it seemed the SPYs were about to make new highs.

The S&P 500 could be breaking its recent uptrend...

The S&P 500 could be breaking its uptrend. I would not be surprised if we see a top here because sentiment seems way too bullish. Remember, trend lines aren’t mysterious or magical. They are simply graphical representations of the forces of supply and demand. The fact that the uptrend line is breaking means that the forces of supply may be overcoming the forces of demand…or at least equalizing with them.

Short-term, I would look for support around the $286 level in the SPYs. This was the recent low and resistance in August. It is an important level because it was the all-time high in January.

Cannabis Markets are at an interesting inflection point...

As we head towards October 17th…the day that cannabis becomes totally legal in Canada the main ETFs and some equities are running to resistance around the same levels that they did at the end of last year into January. It will be interesting to see if they sell off again. The difference now is that the industry has become much more legitimized in the last eight months. Recent news includes Coca-cola and Altria exploring opportunities, Goldmine Sachs and BOA Merrill advising on the Constellation Brands Canopy Growth deal, and big-time fund managers like Leon Cooperman investing in the sector.

HMLSF- The Horizons Marijuana Life Sciences ETF is testing resistance around the $20 level. This is the same level where it found resistance in January.

MJ - The ETFMG Alternative Investment Harvest ETF is testing resistance around the $40 level. This is the same level where it found resistance in January.

ACB - Aurora Cannabis is getting close to the $14 level. This is where it found resistance in January. This is the largest stock in the sector with a $15.15 bill market cap.

CRON - Cronos Group is trading right around the $11.50 level. This is right where the top was in January.