lowtrade

[lowtrade]

mfbeale & ALL educational post!! SLJB example of penny PR story play.

NO problem, ask if you don't understand!!!

OK a little on gaps. KNOWN as EMOTION GAPS !

Gaps are a change in the stocks PPs (price per share) from the day before's closing price and the next days open. They can be filled later with price spikes, you don't need a solid body candle to fill a gap in price.

You see gaps both above (a price retreat on bad news) and below (a price run on good news). History shows 95% of all gaps fill (the share price reached the starting point of the gap above & below).

So if the price gapped up from 10 cents to 15 cents, you can expect the PPs to reach the lower 10 cents again, or vise versa for a gap below. It will rise to the high point of the gap.

Gaps are caused by retail traders mind set emotions on news. They fill because the emotion goes away and reality causes the PPs to return to the norm before. Then find a new actual value for the stock from there. People have time to think, NOT react! LOL

This is the herd mentality. Greed/Fear, emotions & human herding traits, drive the price to where logic says it shouldn't be!

Hope this helps!
My rule #1 - NEVER chase a running stock!!!

PS: rigth now and last Friday SLJB's management has been PRing to the herd mentailiy! With follow up fluff PRs to stop retraces. @ news releases in the same day is unheard of !!!!!

-------------------------
07/31/2006 13:16 Sulja Bros. Building Supplies Releases Fin...
07/31/2006 14:35 Sulja Bros. (SLJB) to Release Positive Fin...

08/02/2006 11:51 Sulja Bros. Building Supplies Increases Ma...
08/02/2006 14:40 Sulja Bros. Building Supplies Releases Rev...

Both days timed exactly the day after the retrace start. The herd is being sucked in. They only have so many fluff PRs sitting on their desk and the retrace "will" come. The problem is most inexperienced retail penny traders are already hooked on the story and hold ALL the way down the retrace, or dive. Believing the company is NOT trying to sell stock to fund their new attemp at success, but the price is increasing because that success will be attained.

Problem with that is very very few succeed! Fact is most penny climbs with several runs, last no more the 3 months !!!