#NEW, Pumping and Dumping (sentiment trading) and the Bear Market.

Evening folks. Well NEW has started trading again, as expected (as per my suggestion prior trading), it opened down 70% ish. This was not unexpected.

I don’t have too much to say on NEW, if you are looking for a short term sell out then .12 or .13 would be my target. If you want to hold for news then you might well get .3 or even (if its pumped enough .4) on CPR or asset buying news.

The current price looks to be the low point. I can’t see much reason to sell at this level, so I haven’t sold a share yet.

I still hope to update NEW investors on possible response and action, but that’s currently in the investigation process and might well be 3-8 weeks away.

With NEW we still have the unknown, as to whether or not Cornhill sold its shares to the market makers, or lent them the shares. This should be known by the end of Wednesday this week. We also saw incredible low volumes of selling on Friday. This was by far the surprise of Friday. I expected sell volumes to be maybe 2 or 3 times higher…..We also saw the bid being pushed up on occasion, again unusual given the circumstances.

If we look wider, we get nearly 5 year lows for many commodities, coupled with an expensive capital raising outlook. We have the mining majors cutting back and some chronic over supply.

We have lots of uncertainty, re Greece, Iran etc.

To top it all we have the change in pension funds which is seeing record money flowing out of SIPP pensions (many of which have been invested in AIM or small to mid cap stocks).

I know a few peeps are just waking up to this, but I’ve been all too aware for 6 months or so now and have continued to keep t least 50% in cash.

All this has helped to wash away the mud covering many of the more prominent private investors, particular those that earn a living as a full time job. They have suffered.

They also have no sympathy from me.

Underneath this scramble for the left over meaty scraps, we’ve seen investors turn on investors which has, unearthed the rather immoral happenings.

Pump and dumps are very easy to identify, simply look at the history of posters for the last 12 months. Are they still invested in the same stock?, after they stopped pumping the stock did it dramatically crash?.

The last 2-3 years has seen the emergence of “sentiment trading”…..A true sentiment trader will buy in to a stock and sell when they see sentiment disappearing….Its a widely held investment strategy and works.

However when this is applied to small cap, low liquidity stock and the sentiment trader then tries to influence the market through news, ramping (multi posts about “research”, frequent tweets etc) and this is done purely for short term trading gain. Then it’s not sentiment trading, but is in fact pumping and dumping.

It is made worse when folk sell whilst filling social media with this “sentiment based research”.

So where does that leave investors. Well as with MXO, if your looking to invest because of news then there is plenty of opportunity post news. If your looking to invest prior news and sell on news, then be honest with yourself and others about what your doing.

Keep a big pile of cash.

If others are urging you to buy, then assume it’s because they want you to push the share price up so that they can sell.

Maybe put aside a small amount to take a few risks with (but be prepared to lose it all).

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