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Zero volume on spec stocks - Has everyone given up?

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prawn_86

prawn_86

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Hi all,

Just an observation of late, and was wondering if anyone has noticed the same.

I have a watchlist of 25 stocks that could be called spec. In the last couple weeks anywhere between 3 - 10 of them do not trade in a day, and they're not in halts. Some are normally illiquid, but up till a month ago they all used to have at least a few trades in a day at a minimum.

Obviously specs are not in favour but i guess you could take this one of two ways:
1. No one is willing to buy anymore and it will be a long lonely road till any recovery in the micro cap sector.

2. All the fear and panic selling is finished (hence the zero volumes) and it may be a good time to buy.


Any VSA techies out there care to enlighten as to what no, or miniscule volume generally means? (Im aware VSA is best for highly liquid stocks)

Discuss....
 
Any VSA techies out there care to enlighten as to what no, or miniscule volume generally means? (Im aware VSA is best for highly liquid stocks)
Click to expand...

No interest plain and simple.
 
i reckon it might be something like money flows into large cap stocks first like banks and bhp etc., then when they have stabilised and there's less profit to be had it flows into mid caps, then finally down into the speccies. maybe its just a psychology thing, everyone is nervous and large caps are safer so money goes there first, this atrtacts more money until it reaches value so the overflow filters down with a lot of perceived risk mitigated by the stability of the large caps.

i noticed specs get hammered hard and fast over the recent corrections and they are very slow to recover, and with the market the way it is you'd have to be brave to be venturing in there.
 
So pretty much what i thought. Although its weird that there is zero volume for so many stocks

tech/a said:
No interest plain and simple.
Click to expand...

Now the question is when will it pick up and how do you use volume as an indicator if there has been no volume for a while. IE - do you still do it based on historical volume or use %'s or what
 
prawn_86 said:
So pretty much what i thought. Although its weird that there is zero volume for so many stocks



Now the question is when will it pick up and how do you use volume as an indicator if there has been no volume for a while. IE - do you still do it based on historical volume or use %'s or what
Click to expand...

History repeats...repeatedly... dare I say it.. :) why nott :D like bad prawns... :D
Cheers
.........Sauri
 
prawn_86 said:
Is that meant to mean something? Have you been drinking? :p:
Click to expand...

it means nought... as I don't drink anymore.. or for dat matter any less neither.. but tanks for accepting my warped humour.. :D

Watch out for roaming barbies
................Kauri

PS...
without liquidity nothing works... at least in my limited experience.. slainte.. bottoms up.. an cheers..
 
I think its from no interest in the speccies from a seasonal low volume, plus RISK AVERSION, tight credit, and higher bank interest.

Basically it is a sign of the times.

Cheers,


CanOz
 
prawn_86 said:
So pretty much what i thought. Although its weird that there is zero volume for so many stocks.

Now the question is when will it pick up and how do you use volume as an indicator if there has been no volume for a while. IE - do you still do it based on historical volume or use %'s or what
Click to expand...

That 'when' will be never for a lot of the poor quality spec stocks - many will dissappear from the boards in one way or another - those with quality assets and no cash will get bought out for a song by peers with more cash - those with poor assets and poor prospects will bump along until they spend their cash and suspend themselves while they ponder their next moves. Some will re-emerge recapitalised and with a new direction and a fresh band of enthusiastic shareholders, others won't. The existing shareholders will have been diluted to oblivion through capital raisings or in the ones that go under altogether will end up with nothing.

The ones that will survive with existing shareholders intact to reap the rewards will have a strong cash position , exceptional assets and good management. The first to recover will be those that are generating an income now or are likely to start to generate an income soon - when cash is king investors are attracted to stocks that pay good and growing dividends.

The pattern tends to flow along the lines that dissarray describes.

Very low liquidity doesn't necessarily imply that the stock is a dud but its a fair indication, as even in a flat market the better quality junior stocks will still have trading and accumulation occurring. Rather than volume I'd be focusing on their fundamentals - cash levels, asset quality, management and near term cashflow prospects (and capex between current situation and cashflow - i.e. do a proper conservative NPV on the assets).

There is often the opportunity in a bear market, due to mispricing, to swap from poor quality to better quality without giving away too much on price.
 
Now the question is when will it pick up and how do you use volume as an indicator if there has been no volume for a while. IE - do you still do it based on historical volume or use %'s or what
Click to expand...

Although Kauri's humor is questionable his observation is supported by me at least.

If you sat in a car with no gas would you expect to get somewhere?

Most buy smalls because they seem cheap.
You can buy 20000 at 10C or 50 at $40.

But a 5% move in either is a 5% move.
One you can analyse the other----well you can gamble.
 
:) personally been using these distinct lack of vols in the little pond to my advantage , been picking up 2 uglies that make a quid at silly prices provided by severe gapping and lack of depths :) gawd bless these lil park and wait spots for patient traders happy to sit and wait a while . but as far as general trading of the dreadfuls , nah leave it till the fresh bushy eyed punters come back to reinvent them again .
 
tech/a said:
Although Kauri's humor is questionable his observation is supported by me at least.

If you sat in a car with no gas would you expect to get somewhere?

Most buy smalls because they seem cheap.
You can buy 20000 at 10C or 50 at $40.

But a 5% move in either is a 5% move.
One you can analyse the other----well you can gamble.
Click to expand...

I'm glad it is only my humoUr that is questionable... however your general approbation is .. well~~~ what the heel.. bottoms up..
Slainte
..........Kauri
 
tech/a said:
Although Kauri's humor is questionable his observation is supported by me at least.

If you sat in a car with no gas would you expect to get somewhere?

Most buy smalls because they seem cheap.
You can buy 20000 at 10C or 50 at $40.

But a 5% move in either is a 5% move.
One you can analyse the other----well you can gamble.
Click to expand...


Take that...rewind it back...
10 cents to 10.5 cents = 5%
$40 to $42 = 5%

Which seems more attractive now?
 
Re: Zero volume on spec stocks - Has everyone given up?

Nope... I've been picking a few desperate sellers off... but it takes a few days for some of them to come to me. :cool:
 
JTLP said:
Take that...rewind it back...
10 cents to 10.5 cents = 5%
$40 to $42 = 5%

Which seems more attractive now?
Click to expand...

10 cents to 9.5 cents = -5%
$40 to $38 = -5%

Which seems more dangerous to your capital now?
 
I think there's a few factors with the specs.

1. There aren't many buyers in the market, people are scared.
2. Punters have been moving to cash, people are scared.
3. A slight switch to financials over commods, people may be silly.
4. Punters are more risk averse, people can sometimes be smart.
5. With low liquidity specs are harder to sell out of, people can sometimes be patient.
6. Some specs have exceptional long term potential so people don't want to sell, and they are sometimes smart.
7. When caught in the headlights, some people freeze.
8. Buy and Hopers are scared to turn their computers on to see how much they've lost, and have no ability to trade.
9. I am in Quito working out of Cafe's and have limited time to create volume.
10. Punters are too drunk from having resorted to the bottle, and can't find the buy button.
 
JTLP said:
Take that...rewind it back...
10 cents to 10.5 cents = 5%
$40 to $42 = 5%

Which seems more attractive now?
Click to expand...

One way to look at it.How about this way.

1 tick down from 10.5c = 4.76 % loss.

1 tick down from 4.00 dollars is 0.00025%. and I am hopeless at maths.:)

In this market which would you want to hold ?
 
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