Posted On: 12/31/2014 1:02:03 PM
Post# of 9964
My personal hypothesis about what causes the "January Effect" is the result of investors selling stocks during December as a tax loss strategy with respect to a write off. In doing so, they can't purchase the same, or similar, stock back for 30 days. If they did so, the write off will be disallowed by the IRS as it is consider a wash sale.
The Market Makers know this and step the penny stocks pps's down, especially in the last quarter of the year, then load their inventories with the oversold/undervalued stocks. In January, they stop naked shorting the stocks and let them run, selling their accumulated inventories to new investors and those that can now buy them back outside the 30 day wash sale rule...
The Market Makers let the stocks run during the first quarter of the year, and then start pulling back on the reins by naked shorting, and profiting the rest of the year on the short side. Of course their defamation puppets are all over message boards fueling uncertainty, fear, leading to selloffs.
Then, before the end of the year, the process starts all over again...
Just my humble opinion based on observation, and having a sixth sense...
Chewy
The Market Makers know this and step the penny stocks pps's down, especially in the last quarter of the year, then load their inventories with the oversold/undervalued stocks. In January, they stop naked shorting the stocks and let them run, selling their accumulated inventories to new investors and those that can now buy them back outside the 30 day wash sale rule...
The Market Makers let the stocks run during the first quarter of the year, and then start pulling back on the reins by naked shorting, and profiting the rest of the year on the short side. Of course their defamation puppets are all over message boards fueling uncertainty, fear, leading to selloffs.
Then, before the end of the year, the process starts all over again...
Just my humble opinion based on observation, and having a sixth sense...
Chewy
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