The Dow Jones down another 240 points today, which comfirms the 400 point intraday drop a couple weeks ago was no fluke. I think a bear market about to set in. Normally, it would be good for penny stocks, but with the proliferation of hedge funds, I think a bear market on the big boards will cause (even more) havoc on the pennies as the hedge funds will come over here with greater urgency and short the hell/pipe finance the hell out of the penny market.
I thought that the penny market was just in the doldrums during this past Summer. Now I've come to the realization that the penny market has fundamentally changed, due largely (of course, not solely) to the following reasons: (1) pipe financiers getting more and more active with penny stocks; (2) hedge funds shorting penny stocks; and (3) new traders just coming into the penny stock market, fueled by the growing ease and familiarity with online trading, who are either playing with scared money or who simply don't know how to trade or who don't know how to specifically trade penny stocks.
The penny market is now characterized by an ever greater "musical chairs" mentality among penny stock traders, newbie and seasoned alike, as everyone wants to be the first one to sell, which in and of itself leads to a panic sell-off. No stock this year has had a huge multi-day, multi-bagger, high-volume run, ala USXP, HISC, QBID, etc. The ones that have had monster runs, such as HMGP, have been relatively low volume and is being controlled a relatively small group of traders. Generally, no one is willing to wait even a few days to allow a stock to have a monster move. Thus, it becomes a self-fulfilling prophecy.
ALL JUST IMO!
AI
