It had to end at some point

Dear L.,

after all this incredible bull market had to end. + 0.5% on the S&P500 every day was just not sustainable. Does last week´s price action mean that we have already witnessed the market top of this cycle? I don´t know. We may very well come back. However, it seems as if volatility will remain for some time to come and since complacency is gone for now the fuel for the crazy small-cap stocks seems to be gone too – for the moment.

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Given last week´s furious price swings, most of the stocks on my watchlist did only one thing, they went down.

RCAR was the one stock which did follow the anticipated move. After giving back the previous weeks´ gains within the morning it bounced back. However, as so often predicting that this move would happen does not bring along the ability to take advantage of the foreseen move. I in fact was watching RCAR when it started tanking and missed my entry at $5.6 even though level 2 did indicate a reversal.

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In the meantime, OLMM has been continuing to steady creep upwards, still without significant liquidity. Given appropriate market conditions this move could last for a few more weeks before the crash will happen.

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My other two watches, TITXF and IWSY did not do much last week. At least IWSY still looks interesting given its chart and the anticipated breakout at $2.2.

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That´s pretty much everything I have in terms of watches for next week. Let´s see whether next week will bring us back to normalization or whether the “bear market” (whuuuuu) is about to start.

Best,

Nils

Next Try

Dear L.,

Well, last week did not turn out as expected. The market sold off most of the week and with it the OTC market sold off too. There was one very nice play on Monday though. ARFXF broke out and followed the anticipated plan exactly. It broke out at around 46 cents. After coming back to this breakout level it spiked and entered a consolidation phase between 48 cents and 50 cents before going to almost 59 cents at the end of the day.

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However, the overnight hold did not work out in this case. Instead of gapping up it sold of sharply in the first minutes of the day, which is another reason for not holding the whole position overnight but rather to take some profit earlier.

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This is pretty much the only stock from last week´s watchlist which did something worth mentioning.

Let´s have a look at the week to come.

The first stock on my list is RCAR which has been grinding upwards very steadily for the past few weeks. Even though it has “only” advanced by about 25% and is not yet super-extended, I think that the steadiness of this development eventually will lead to a crash. In this case I would be looking to dip buy RCAR.

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Another stock in the same category is OLMM belonging to a company which “does not have any significant operations” but still does have a market cap of more than 60 million USD. Admittedly, the upgrind has been short, rather small and liquidity is not there yet. But it looks like a possible crash candidate for the weeks to come. Then, it would be a dip buy opportunity.

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Let´s go to breakout candidates. IWSY just trades below resistance at $2.25 and is expected to break out next week. What I do not like about this stock is that it usually is not very volatile and breakouts are not confirmed by big up-moves. Thus, I would play this with a small position size and maybe hold it longer.

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Furthermore, TITXF hovers just under past resistance of around 38 cents. The prospects of this stock however strongly depends on the appearance of increased liquidity. Let´s hope so.

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Well, that´s pretty much it for next week´s watchlist.

Best,

Nils