This has been an interesting week in the markets. We saw gold go through $1330 and test the $1350 level. It pulled back yesterday and so now a lot of people are calling for a big correction, but people were saying that when gold got to $1300 last month too.
I talked about what I think is happening with gold in an interview I did with Jim Goddard you can listen to here:
Now since the end of September the top performing sectors in the market have mostly been defensive sectors, but one speculative sector has done well to become the true momentum play for daytraders.
And I’m talking about the dope stock sector.
Dope stocks now make up over 20% of the top 100 most popular stocks to own by Robinhood Account holders.
For over a year Apple was the most popular stock to own there.
Now Apple has slipped to third place and
Most of the dope stocks are lining up to make another move soon.
Take a look at instance for CGC.
CGC has been consolidating between $40 and $50 long enough to cause its 20-day Bollinger Bands to come together. The BB width indicator is now below 20.
This suggests that a sizable move will begin in CGC once it closes above $50 or below $42.50.
Of course the last time this happened the move led to a breakdown November dump, but at the time the market was selling off. Now the S&P 500 is floating around its 200-day moving averages and likely to keep doing that for the next several weeks.
So a close above $50 on CGC would likely generate a rally to new highs and happen in March.
And most dope stocks are lined up like this.
With the “FANG” stocks now lagging the market
I told Goddard I think they can make a nice move in March, but I really have no opinion on what would happen after that.
Momentum plays like CGC are fun for people and with the market rally since December people are very hungry to play them, but you can get surer long-term gains with something that has come out of a stage one base recently with my Two Fold Formula.
In fact I bought a small cap mining stock this week in such a position that Power Investor members know all about.
And it’s inching up.