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Penny stock volume as a percentage of Nasdaq volume became a very large
percentage (3.2%) back in the dotcom bubble peak in February of 2000, reflecting that a high level of speculative trading was taking place. In the next few years the Nasdaq 100 lost over 80% of its value! Recently such penny stock volume has risen to a record high of 4.5%! Will it be different this time?
So writes Chris Kimble (http://blog.kimblechartingsolutions.com) in edited excerpts from his original post* entitled Nasdaq 100 fell 80% last time this took place! Different this time?.
[The following article is presented by Lorimer Wilson, editor of www.munKNEE.com and may have been edited ([ ]), abridged (…) and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.]
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Is this the holy grail of indicators? No, but I do feel investors should be aware of this, especially when margin debt levels are at levels only seen one other time in history, which happened to be at the same time penny stock volume hit highs back in 2000!!!
[Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.]
*http://blog.kimblechartingsolutions.com/2013/06/nasdaq-100-fell-80-last-time-this-took-place-different-this-time/
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Everyone except those in PM’s are playing musical chairs with their paper money!
The music can’t go on forever so get ready for rapid increases in the values of real assets as compared to paper!
As the value of the US$ declines those will real assets and/or plenty of paper money will just be able to pay off their loans with wallpaper money!