Today, some of the better class microcaps with strong IP showed...

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    Today, some of the better class microcaps with strong IP showed resilience to push higher despite lingering concerns about the market direction and whether this rebound is just a relief rally after the large falls we had the previous weeks.

    And the market today was able to discern the good from the bad. One of my calls in my earlier post was to get rid of Dog Stocks ASAP as they would most likely be clobbered in a downturn, and clobbered they were as you can see in the Table below. Since the commencement of the down cycle from 31 July, several of these Dog stocks lost between 9% to 57%, with no recovery in sight. It does appear that with prevailing weaker sentiments, money is beginning to shift away from disenchanted stocks to the better microcaps. The only reason these stocks never went lower was because those holding them were holding onto hope and they were also supported by speculative money in search of short term trading gains - the latter is now gone and more of the former jumping ship as well.

    More weakness is likely to continue for these stocks simply on growing concerns over their ability to continue running a deficit operation as they have not been able to demonstrate sufficient business traction to lift them out of the woods and time is running short as both credit and capital raising would be less difficult to procure ( without a higher cost) in a more challenging environment. It is a race to the bottom that you do not have to subject yourself to.

    Column 1 Column 2 Column 3 Column 4
    0 SINCE THE DOWNTURN BEGAN 31 July 19 20 Aug 19 Chg%
    1 FGO   $   0.007   $    0.003 -57.1%
    2 YOJ   $   0.099   $    0.071 -28.3%
    3 9SP   $   0.030   $    0.023 -23.3%
    4 LVH   $   0.345   $    0.270 -21.7%
    5 FZO   $   0.210   $    0.170 -19.0%
    6 NUH   $   0.041   $    0.034 -17.1%
    7 BRN   $   0.053   $    0.044 -17.0%
    8 EDE   $   0.058   $    0.052 -10.3%
    9 BUD   $   0.044   $    0.040 -9.1%
    10 FBR   $   0.081   $    0.074 -8.6%
 
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