I expect there may be a little morning last "hurrah" trading action before we head into the weekend, so we should see volume, less than normal, but the liquidity should still be there if you want to create or reduce a position size. Post-lunch, I suspect we'll get some whips, but light volume should create a drier type of day.
While I expect three-day weekends in 2020 to act similar to three-day weekends of most other years, we may indeed experience a "this time it's different" summer. Summer trading is known for its dog days. Slow, meandering action with a few big stock stories, but the overall volume and index action leave something to be desired. But I find myself asking - "How many traders who travel and escape for the summer will be doing it this year?"
My guess is we'll see a lot less travel and a lot more action on the market. Of course, algorithms don't take vacations, but there's usually a wizard behind the curtain. And there's no guarantee this will be the case as nothing with the market is ever guaranteed, one should be aware of the potential that the summer may have a similar look as to what we've seen over the past month. No, that doesn't mean we'll move straight up over the summer, but we'll get plenty of virus, China, stimulus, and unemployment chatter.
Speaking of China, sometimes it is better to be lucky than good. Straight eights across the board as the last two days since I stepped aside have been painful in the group. Stepping away for now doesn't equal stepping away forever. There will come price points when the risk versus reward skews back in favor of risk. Many names are 10% to 20% below their highs of the past few days.
Almost on queue with the China dump came the cannabis run thanks to an article alluding to the possibility of CBD helping in the fight against coronavirus. The headline read cannabis, but the details centered around CBD. Then again, we had Amarin (AMRN) announce Thursday after the bell it was looking into using its concentrated fish oil as a Covid-19 treatment. Unfortunately, Covid-19 has become the new thing to pop your stock like adding a blockchain component was to your business a few years back.
On the cannabis side, I'd likely stick with the names I have comfort: Village Farms (VFF) , Canopy Growth (CGC) , Cresco Labs (CRLBF) on the own side, and Tilray (TLRY) plus Aurora Cannabis (ACB) on the trading side. The latter two names have become the momentum plays both higher and lower with plenty of trading volume and liquidity. That's where I would start my search in the group.
Nothing wrong with playing it tight to the vest today and watching the action or even stepping away from the desk and getting some sun. I hope everyone has a happy and safe Memorial Day weekend.
