What's Otto on about today?

Otto typically makes reccies on a Sunday that see the stock skyrocket 20% on the Monday morning. Mostly this happens when he's recommending a highly illiquid stock to his subscribers.

Think about it: if he's only got retail like me following him, let's say 300 of them, and they're each taking a starter position (oh, let's say just a 2% position) in, let's say, a $100,000 account (cos that's the least money you can trade for reasonable fees at somewhere like Investorline, and anyone with more money than that is probably not crazy enough to put it all into junior miners and frickin' explorecos), that's still $600,000 trying to move into the stock. If only 10% of those people are dumb enough to put in 9:30AM buy orders with no limit, that's still $60K worth of bids at 9:30AM.

For a stock that only does $20K-$100K of trade in a day, like most of his highly-illiquid reccies (including last week's), that $60K pile-in is pure market-distorting action right there. So the price goes up 20%.

In some cases you can buy the stock 2 weeks later at the price it was before Otto reccied it.

I don't encourage him to lecture his readers, but I do write him emails asking him to mock the guys who (say) buy COP at 90 cents on the Monday morning, right about the time that I buy it a few weeks later at 70.

Now, I don't want to shame him for life, in front of the very people he regularly -er- highlights on his blog, by referring to the stock he recommended as a buy this weekend... but, let's just say that yes, I bought in at $3.15 today, so what.

In this case, though, he reccied a stock that does $2M/day in trade on the TSX. His followers couldn't have distorted that stock's price by piling in on a Monday morning - its regular volume swamps that out. Plus a lot of his readers are Americans who probably bought the crosslisted shares on the US exchanges, so they were swamped out even more.

Plus, just take a look at the chart - with certain names edited out to protect the insolent, of course:


When this was trading at $3.15 and up at the start of the day, the chart probably would have looked good. Standard MACD was probably about to trigger up, at that price. 8 and 60 seem to be the relevant intervals for RSI and CCI; both look good. And hey, it had crossed over its EMA(14) (in this case I use 14 cos the stock is so noisy and fakes out a lot). Plus, the other miners of this metal were moving up today, the metal itself was strongly up, $HUI was up and close to a breakthrough point... all the stars seemed to be aligned at 10AM.

So, yeah! I personally bought some at $3.15 this morning! Shame on me, Otto! Looked good at the time. Now, that was only a tiny starter position, just to keep track of it and have a foot in the door in case it exploded up to your target in one day. :-)

I doubled down with an equal serving at $3.01, which out of luck happened to be the bottom tick, yay me. I could double down again to $2.80 or so without being worried, as to me $2.60 looks like a good stop loss point and that'd be about my max position size. And since you call this an X% win in Y months (where X is some huge profit that you shouldn't rightly be able to make in Y months unless there was no god), and essentially told everyone to dump another, more reputable company, that mines the same metal, in order to buy this one, well... of course people will pile in.

Cos they trust you and stuff.

I'm sure it will all work out well.

Let's just hope that certain people don't find out about this reccy....