Weakness continued on this light trading day, especially in the final hour of trading. The not-so-manic market activity was felt by traders. While Columbus Day is not a major or market holiday, it is still an excuse for a long weekend for many. Fewer market participants results in lighter than usual liquidity. When market participation is thin, prices are more susceptible to larger swings.
Unfortunately, the cannabis markets reflected this action and MJIC Marijuana Index and Benzinga 420 Marijuana Index added to recent underperformance versus small and micro caps, with declines of 1.26% and 2.5% respectively.
Daily Positive – Keep an eye on the Russell Micro Cap Index. This index was positive today versus almost every other equity index, which were in the red.
Daily Negative – Several OTC PINK cannabis companies were weak today. OTC PINK are typically companies with limited financial information, no regular filing and no auditing. Easy rule of thumb here: friends don’t let friends buy pink sheet stocks.
Thoughts to ponder regarding the cannabis market: Why aren’t the companies with real revenues and audited financials holding up against other companies with questionable underlying businesses or other supporting factors?