RCC Holdings Corp fka RCCH

[frogdreaming]

For those of you unfamiliar with the 'accumulation' metric who might think that a positive accumulation is a good thing, let me explain.

Accumulation is a measure of whether there is buying pressure or selling pressure on a stock based on the difference between the number of shares sold and the number of shares bought during a particular interval. If there are more shares bought by investors from MMs than there are shares sold by investors, then there is a positive accumulation. Inversely if there are more shares being sold by investors to MMs than there are shares being bought then the accumulation indicator is negative. In the normal behavior of 'normal' stock the accumulation indicator will move in cycles based on the performance of the company and the interest of investors and can be used as a gauge of potential performance.

Unfortunately there are conditions that can affect the accumulation measurement in ways that completely destroy its viability. RCCH is one of those examples. If a stock price declines to the point that there is no bid then regardless of investor sentiment there can be no selling of shares by disgruntled shareholders to the MMs. So even though they might wish to sell, they cannot. If the only possible transaction available to shareholders is a buy shares from the MMs then regardless of how little buying occurs, there will be a positive accumulation number. In fact it will approach infinity based on there being zero shares in the denominator of the equation.

As your elementary school math teacher explained to you years ago it is impossible to divide by zero because the answer is nonsensical. That is what is occurring here. Whenever there is no bid the accumulation index skyrockets. Only those who are trying to sell you something (RCCH shares) will try to convince you that such behavior is positive.