Since late April-Early May and all the way through this summer, penny stocks have been a tough buy. The sellers have been out in force. I have speculated that the lack of money flow coincided with the precipitous fall of the Euro, meaning dollar denominated penny stocks became more expensive for foreign investors. Since early June the Euro has mounted a come back and we are seeing the money flow trickle back into the market.
Now the penny stock market is notoriously slow in the summer, but this summer seemed especially slow... until now. It seems more stocks are catching a bid, and we are getting some significant gains being posted by many issues on a daily basis.
Big gains not only create cash, but also draw in more interested parties trying to get in on the next 7,000% gain. One example today was DMGM. The stock opened at $.003 a share and hit a high of $.225 before closing at $.14. A $300 share purchase at the low could have been sold for $22,500 at the high.
A recent trend we've been seeing in this market is a term I have recently coined the "Dump and Run". EMLL, SBRH, SREH, MSOA, just to name a few that have dumped their stock down to the low $.000's and seen thier stock rise as bottom fishers and momentum traders drive the share price higher.
Today ITCJ was the most recent "Dump and Run". It was alerted in my premium subscriber chat room at $.001 and went on to hit $.007 with amazing money volume. Obviously these "dump and run's" are not long term holds. They are short term momentum trades that can make you a bundle of cash in a very short amount of time.
I think once we get in the middle of next week, the market will start to kick into gear. This last half of 2010 should be very exciting.
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