Saturday, June 10, 2017

Are we all going to pot? [CBDS]

I've never posted about any marijuana stock plays before either in the legacy blog or in the subscriber's blog before so this is a first.  If you want to ask me about market valuations, fundamentals, growth prospects and the like then you are wasting your time because I don't smoke pot and I don't know jack $hit about the pot growing and distribution industry.

But I do believe that the chart knows. In my experience the chart knows everything.  In the chart we see the aggregation of thousands of minds, some who believe in the future of this "industry", others who think it will be a total disaster that can be shut down by the federal drug authoritarians at any time.  But what nobody can argue is the history of the price action.  Cannibis Sativa shares were, back in March of 2016, 28 cents per share.  Then they skyrocketed up to $9.50 into early 2017.  That's a 34 bagger price movement.  34x.

OK, so you missed that.  So did I.   So did a lot of people.  But I have been watching it since the peak because the price action peaked in a very special way.  It moved up in 5 waves.  In my own internal notes shown below, on 3/31 with the shares still trading above $6, I modeled another big drop in the price of these shares per the red line.  Since then we have gotten essentially that although pushed out a bit in time from the model.

In Elliott wave parlance, the shares have pulled back to the wave two 38.2 fib of the EW peak of wave one peak in the $8.25 range.  The move to the $9.50 high was wave B of a 3-3-5 expanded flat correction which is now over or nearly so as wave 2 has likely bottomed.  The first confirmation that the model is correct will be the break back up into the falling wedge and the next confirmation that wave 3 is taking off would be a break out of the top rail along with the green 200 DMA that nearly corresponds with it now.

I am telling you this before any upward momentum has begun in order to show you the predictive nature of Elliott wave analysis - a capability which is completely beyond the ability of any other fundamental or technical analysis.  In fact, if you look at the insider trading for this company, the CEO has been selling shares like crazy.  Do you know why?  I'll tell it.  He doesn't know how herds travel any better than anyone else.  He's getting something now just in case bad things happen later on.  He knows that there are threats out there which he cannot control, including the federal drug authorities shutting him down.

But the wave count is telling us that not only is that NOT the likely thing to happen but rather that something just the opposite is the most likely outcome.   The vast collective mind of the herd is geographically diverse and thus has sensors all over the place that allow it to see and react to things that you and I cannot perceive; it is a consciousness unto itself and a form of artificial intelligence.  It grows in supportive environments and contracts during adversity just like any other living thing. But we can glean insight into what the herd is likely thinking simply by running the past behavior of the herd through the Elliott wave filter.

I know this sounds crazy; like something out of a new wave kumbaya B.S. pulp fiction rag.  Trust me, I know.  When I first read about it before the dot bomb crash I was thinking yeah right.  But then when so many of the models I was reading came true, the open minded engineer in me could not just pooh-pooh it easily.  Purposely ignoring observed facts simply because they do not align with the current herd think, I have known for a long time, is for sheeple, not independent and observant thinkers.  Where would we be if great observation minds like Galileo and Copernicus (to whom we owe Gresham's Law no less) had allowed their own thinking to be controlled by the herd?  The more I studied, the more truth I discovered.  With thousands of hours of Elliott wave analysis under my belt I have come to the point where I can produce some amazing results.  At the same time, I fully understand that all models are odds based, even those of the big government and corporate organizations. No cowboy, no matter how much experience he has in the field can always predict exactly what the herd will do next.

Fortunately, when gambling you don't have to win every hand and in fact nobody can do so.  All you have to do is have the odds on your side.  So sit back and let's see what happens with CBDS.  My model says it will triple in a year or less and I am writing this at a time when everyone else is obviously running away from the shares.  But I am ignoring their ignorant fear and I like my odds.

Disclaimer: All stocks are essentially and intrinsically worthless in real terms.  Never gamble at an casino be it based in Vegas, Macau, or Wall St. with more than you can afford to lose.  CBDS is obviously a risky little shit stock which can BK at some point for a plethora of reasons.  Of course that is why it is so volatile and that is why those who believe they can model future market behavior would trade it.  Good luck in all your market endeavors.

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