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a 100K share order just went through at .0003...that's $30 worth of stock...who buys that? MM's yanking the price down? this is like watch grass grow...
-------------------- I teach in the middle of a cornfield-Do your own DD and don't base your investments on my opinions
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From I-HUB. Sorry for the length! Thought this article might be of interest and help us make more money. I'm new to penny stocks,so maybe this will help other newbies.Anyway, I found it interesting.
Weekly Thoughts: Learn How to Play the Game: Invest Wisely and Trade Smartly
The savvy long-term investors never chase stocks up. For the most part that is momentum players and daytraders where most of it or what follows is dumb money. Instead the long-term investors use a couple of simple strategies in order to position themselves. One is to find a stock no one immediately sees has huge potential and accumulate. Long-term investors are not interested in trading against the public mind or the dumb money. That's where the majority of the money can be made but even more can be made if the base of a stock is held extremely strong by investors. However the second is not to doubt the research which is the underlying basis for going long and holding.
More and more investors are winning the game nowadays despite all bashers that float through the Internet that has become part of the game. Floor traders of market makers often watch CNBC, news wires and bulletin boards in order to follow the market during trading session. OTC BB market makers (MMs) don't use fundamental and technical analysis. However, what they do realize is a lot of dumb money does use this newest nitch charting or TA (Technical Analysis) to run a stock either up or down. To the MMs this is like taking candy from a baby. Simply they will paint the tape and use whatever tactic to affect the charting bands. Thus the public and dumb money they will have eating out of their hands. Effectively the MMs can show a strong stock growing weak by manipulating the close price in order to generate selling volume, delaying trading time to manipulate trading activities, or even stalling the ask without honoring orders to hold a stock price.
MMs follow a simple code of business when making a market in a stock especially an OTC BB. That is the level that stocks will seek that yields the most volume. Now this is very important because they make money on the volume buying at the bid and selling at the ask. In other words, by making the market they are buying low and selling high. Now smart money adheres to that rule, so do all the market makers. They could careless whether the stock is at $83 or at $0.23. All they care about is the action thus being able to sell stock at the offer (The high) and buy stock at the bid (The low). To increase their profitability, they make the spread as great as possible on as many shares as they can especially if the volume falls off.
When they have mostly all "buy" orders, that's not the price that's going to yield the most volume. They need both buy and sells to get the maximum action. Remember, MMs play the volume. If the volume decreases and there are mostly Buys that become a one way volume, Buy volume. So what they do is let the stock run up to a price where it runs out of steam. They fill all the buy orders there that they can and then comes the pullback one way or another naturally or induced. During the pull back they can buy tons of shares and flip them to those averaging down or trying to catch the bounce. At some price, the stock will be relatively stable and yield the most volume. Now that is the average price you will see
The average price is the point where a stock seeks a level where MMs can profit on the most volume. So during the day that is the price that MMs and momentum/day traders want to see the stock at. Why? Because they know the public and dumb money was chasing the price thing up. Most of the time, the MMs love a flurry of Market Orders which is a dead sign of an artificial run or momentum. Merely it is money in the bank for them. Most get hung in a momentum or day trade or by the tactics of Market makers, who are in the business to screw the public every chance they get and the NASD is not going to do anything about it. They are merely making the market liquid is there reasoning.
The market makers have created an added complication to the OTCBB's chaos of the already volatile intra-day price movements created by dumb money, momentum and day-traders. MMs can not relate to long-term holders in the OTC BB. That makes absolutely no sense what so ever. They feel a large percentage of trades in the OTC BB market consist of short-term or day-trades, MMs merely view the barrage of buy and sell orders as relatively neutral to the market. How they figure it is when the average dumb money buys shares in a company, the MMs feel or rather know with some certainty it is very likely that dumb money will want to sell back those shares relatively quick on the slightest drop.
Now somewhat comfortable with this logic the MMs merely short sells into the buying and attempts to take the stock down in an effort to "shake out" the weak. Since it is tough to know for sure whether a move is the beginning of a trend, or a routine shake out, this type of deception works quite well for the MMs. What the long-termers do to a stock is surprise the MMs because instead of falling the shorting has no effect and the price goes up. Now that puts the MM at selling low through shorting and thus having to buy high in order to cover.
Boy, when this happens, the MMs are not very happy campers. The investors and traders are supposed to be doing that no them. Now it becomes time to pull out every trick and tactic in the book in order to attempt to get a Bear Raid at every dollar mark or percent from where the stock started. Could be a penny in smaller priced securities? What MMs do is give you a chance to make a small amount of money for your momentum and day trading style by shorting it at these levels and trying to get a bear raid each time. Each failure is compounding the MMs short position so they let it go to the next level. Now come more deliberate tactics MMs use to coerce Bear Raid or panic selling.
Once the MM is caught short and the strength of the buy is overpowering the MM will want to cover his short position. So the MMs call up one of his friendly MMs and says some like "the weather is sure rough today." The MM along with the other "friendly MM initiates a down tick about the same time. Now this can also be done with a certain amount of shares such as an infamous 100 shares flag. This down tick gives the illusion of weakness designed to hopefully begin the bear raid of selling. The fickle, fearful, day trader, momentum and short term begin to sell out allowing the MM to cover his short position at lower prices. They will move it down quickly to get it to a price of least financial damage. Problem they have is long-term investors in the OTC BB. They start accumulating and buying comes flying in when they take it too far thus the MMs took it to the point of volume again and not only investors the other MMs step in the make money on the spread.
Alas the poor MM does not get to cover. Now comes various tactics like stalling, boxing, or even locking the Bid and Ask for a while.
Of course, MMs aggressively deny any sort of collusion designed to fix quotes or spreads, but a recent SEC investigation tells another story.
MMs have a vast resource of tactics and it would take probably more than my lifetime to figure them all out.
So how do investors somehow manage to overcome the obvious deception in OTCBB arena? One answer is indirection trading style by going long which the MMs do not expect. In the war between investors and public companies on the OTC BB vs the MMs, if the MMs have all the advantages due to position or other factors, direct confrontation such as momentum or day trading hitting the stock is a definite death sentence.
However, an indirect approach tends to weaken the path of least resistance before slowly overcoming it. The most effective way is long-term investors slowly accumulating and holding thus drawing the MMs out of its defenses making them as naked as their short position. This is war so this slow accumulation and holding for the long term easily achieves the desired effect to force MMs to cover and knock off the tactics or bury themselves deeper.
The MMs when caught will especially use every trick and tactic in the book to get a Bear Raid thus playing on the individual fear of most people. The MMs feel they have information and position advantages over the investors as long as the holding of the stock is in weak hands or short term holders. Since they are OTC BB MMs who believe all OTCBB companies are not worth investing and management is ineffective regardless what is happening within the company. Furthermore, MMs know they are in the position to impose a great deal of influence in OTC BB stocks trading when it suits their needs.
This inherent power of position enables the MMs to move the markets at any time up or down. As a result, the only way to draw them out of their favorable position is going long. Now this does not mean just any company but to effectively nail the MMs, Longs must find the great company on the floor and accumulate long before the MM tactics and games begin.
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quote:Originally posted by ARTTEACHER: a 100K share order just went through at .0003...that's $30 worth of stock...who buys that? MM's yanking the price down? this is like watch grass grow...
quote:Originally posted by ARTTEACHER: a 100K share order just went through at .0003...that's $30 worth of stock...who buys that? MM's yanking the price down? this is like watch grass grow...
IMO that is good for us.
You know i sold 2.5 million of my 10 mil shares for .0003 ( a $250) loss, so I could put it in RSHN..and made my loss back and then some today...but I feel positive about this stock...the MM's gathered up a ton this week.. 1.2 BILLION shares were traded...They have loaded up, and are continue to load up, shaking people out who expected the run this week....soon IMO...a week or two..they will let it run..
-------------------- I teach in the middle of a cornfield-Do your own DD and don't base your investments on my opinions
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quote:Originally posted by jerseyboy70: From I-HUB. Sorry for the length! Thought this article might be of interest and help us make more money. I'm new to penny stocks,so maybe this will help other newbies.Anyway, I found it interesting.
Weekly Thoughts: Learn How to Play the Game: Invest Wisely and Trade Smartly
The savvy long-term investors never chase stocks up. For the most part that is momentum players and daytraders where most of it or what follows is dumb money....
thanks, jerseyboy-- sheds a lot of light on the process, imo-- good for ppl to know
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You're welcome podcaster. I'm not sure, but I'm thinking that small buy at .0003 may have been one of their signals to move up. JMHO.
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Dead volume today. I wonder if that means no one wanted to buy or no one wanted to sell. Hopefully the MM's are done collecting shares, and the rest of us are un-willing to sell. Once all the shares are locked in place, then we should see some upward movements. I'm expecting to see the start of a run next week.
-------------------- -------------- PHBT all the way
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A run at the start of next week is what I was thinking as well. Look at the volume in the last 12 days. The shares have been bought up at 3 and 4 or higher. Remember there are only 6.2 billion out where do you think this is going to go?
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quote:Originally posted by The Green Demon: A run at the start of next week is what I was thinking as well. Look at the volume in the last 12 days. The shares have been bought up at 3 and 4 or higher. Remember there are only 6.2 billion out where do you think this is going to go?
quote:Originally posted by The Green Demon: A run at the start of next week is what I was thinking as well. Look at the volume in the last 12 days. The shares have been bought up at 3 and 4 or higher. Remember there are only 6.2 billion out where do you think this is going to go?
Just looking at the chart..RSI is headed up, and really there isn't anywhere left to go but up...a month ago this was .0035....MM's will let this one go this week after loading up the other day, next week they will be chasing RSHN and GZFX....this will be there money maker IMO...
-------------------- I teach in the middle of a cornfield-Do your own DD and don't base your investments on my opinions
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Im having a real hard time trying to find any good info about this one. Not trying to get yall to do my dd for me, but has anyone been able to find anything new about this one? Anything would be appreciated!
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this morning there were 0 selling at 4 and now 6. This is strange but by my count only about 3-4 hundred million shares to sell at these levels.
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no idea. where is the best place to find news on PHBT? scottrade has NO news for this at all. i dont see anything on yahoo finance. and the phbt website hasn't been updated since december 2004. is pinksheets the best place? what do you all use?
-------------------- -------------- PHBT all the way
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Well, I e-mailed the company again. No reply yet. Also called the company, but had to leave a message on Doxey's voicemail. I asked the company to keep us informed more. I also called Fl Dept of Commerce for information about the inquires for distribution contracts as noted on the March 21 alert. I couldn't find out anything today. The alert also implied a marketing campaign was imminent. I'm trying to figure out a way to at least find out if that is true. Any suggestions? I really hope that everything checks out. If so, we're on the right track for sure!
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