post courtesy of Koolmoto ..
1 million JBII shares were sold & 1 million JBII shares were bought in a single hour. One year has passed since the SEC complaint's hat-trick of volume. We have drifted into this same key area of intense supply and demand. How should we be positioned in regards to JBII today? There are many risks and rewards associated with the stock and it is very difficult to decide who to listen to- the bulls or the bears? One extremely useful piece of DD many forget to consider in detail is the market's reaction to news. We all know that share price is dependent on news and we can all tell the good news from the bad. To be a truly successful speculator, it is crucial to study the market's contrarian volume at specific price points when polarized news is released.
How serious can this SEC suit be and how can we take advantage of the current situation? Will JBII win, settle or be bankrupted into oblivion? Smart money is who I listen to when I can't know the answer. A stock's chart history is crucial for determining future events because we can see how smart money (professionals) have positioned themselves in the market. It is easy to see and here's why: Professionals trade in much larger volume compared to the rest of the market. A professional cannot simply at any time enter an enormous buy or sell order at the market and expect to get a quick and predictable price. In order to quickly fill extremely large buy and sell orders (especially in a thinly traded stock like JBII), polarized and misleading news is required. I'm not saying that JBII did nothing wrong, that the complaints of fraud are 100% false, and JBII should win the SEC case. I'm saying the SEC suit may not be as horrible as many think and given the amount of risk the case adds to being long JBII, there is still a price point where it is worth it to buy JBII shares and lots of them.
A free market determines on its own what is a fair price. Even in the face of terrible news, there is a price worth paying for a company's shares. On a bar chart: the volume, spread, and closing price in relation to the bars around it give us a great deal of information.
Study the chart below to see where professionals were selling into the trap up-move prior to the news of the SEC complaint (almost as if they knew it was coming). Then see how price was marked down quickly and massively in the last hour of January 4th, 2012. See the undeniable evidence that smart money stepped in and bought every share being sold by panicked sellers in the morning of January 5th, 2012. The amount of demand was so great that it quickly overcame the supply by an enormous amount, forcing the share price up, up, and away. Also note how on January 12th, 2012, when an "analyst" on Seeking Alpha posted about why JBII sounded like a "can of worms", price was once again rapidly marked down into an area of overwhelming demand.
1 million JBII shares were sold & 1 million JBII shares were bought in a single hour. One year has passed since the SEC complaint's hat-trick of volume. We have drifted into this same key area of intense supply and demand. How should we be positioned in regards to JBII today? There are many risks and rewards associated with the stock and it is very difficult to decide who to listen to- the bulls or the bears? One extremely useful piece of DD many forget to consider in detail is the market's reaction to news. We all know that share price is dependent on news and we can all tell the good news from the bad. To be a truly successful speculator, it is crucial to study the market's contrarian volume at specific price points when polarized news is released.
How serious can this SEC suit be and how can we take advantage of the current situation? Will JBII win, settle or be bankrupted into oblivion? Smart money is who I listen to when I can't know the answer. A stock's chart history is crucial for determining future events because we can see how smart money (professionals) have positioned themselves in the market. It is easy to see and here's why: Professionals trade in much larger volume compared to the rest of the market. A professional cannot simply at any time enter an enormous buy or sell order at the market and expect to get a quick and predictable price. In order to quickly fill extremely large buy and sell orders (especially in a thinly traded stock like JBII), polarized and misleading news is required. I'm not saying that JBII did nothing wrong, that the complaints of fraud are 100% false, and JBII should win the SEC case. I'm saying the SEC suit may not be as horrible as many think and given the amount of risk the case adds to being long JBII, there is still a price point where it is worth it to buy JBII shares and lots of them.
A free market determines on its own what is a fair price. Even in the face of terrible news, there is a price worth paying for a company's shares. On a bar chart: the volume, spread, and closing price in relation to the bars around it give us a great deal of information.
Study the chart below to see where professionals were selling into the trap up-move prior to the news of the SEC complaint (almost as if they knew it was coming). Then see how price was marked down quickly and massively in the last hour of January 4th, 2012. See the undeniable evidence that smart money stepped in and bought every share being sold by panicked sellers in the morning of January 5th, 2012. The amount of demand was so great that it quickly overcame the supply by an enormous amount, forcing the share price up, up, and away. Also note how on January 12th, 2012, when an "analyst" on Seeking Alpha posted about why JBII sounded like a "can of worms", price was once again rapidly marked down into an area of overwhelming demand.
