Tuesday Wrap: Acceleration Burns

People are starting to notice this…

In the history of the StockTwits Trending Bar, we've never seen so many sub-$10 stocks consistently trending. #RedFlag $SPY

— Sean McLaughlin (@chicagosean) Mar. 11 at 08:22 AM

 

At one point or another this week, the following sub-$10 tickers (and recently former sub $10s) have trended on StockTwits: $PLUG $BLDP $FCEL $LJPC $CDTI $SNTA $ONVO $OPTT $RXII $NWBO $BONA $SNMX $JIVE $AKS $SSH $ZNGA $GLUU. The now 5 year old bull market is beginning to flash signs that experienced market professionals often point to as a harbinger of character change that presages possibly significant market tops. People piling into low market cap stocks are often one of several signs of a top. Tends to show money has nowhere else to go? While it is impossible to accurately pick THE top, these types of signs trigger a heightened need to pay close attention to your risk levels.

@chicagosean Of the 14 trending tickers (current to 1030ET) 7 are <$10. Average March month-to-date performance for all 14: +48% $SPY

— andrewunknown (@andrewunknown) Mar. 11 at 08:43 AM

 

While congrats are certainly in order for long investors riding these epic waves (and maybe sold a little today?!), messages like this one above from @andrewunknown tend to raise the neck hairs of professional money managers. When stocks start moving in seemingly insane spurts, the sustainability of these moves and their impact on the larger market indexes comes into question.

And then there’s this…

LOL — some analyst on CNBC just now said we can play this bull run for 2-3 more years "pretty much on auto-pilot." $SPX

— marz bonfire (@MarzBonfire) Mar. 10 at 01:07 PM

 

…more cringing.

To be sure, there was no StockTwits.com at previous recent major market tops in 1999 and 2007, so perhaps these observations are anecdotal at best? But make no mistake, the attention being paid to the more speculative corner of the markets is a recent phenomenon on StockTwits and one that bears monitoring.

Consider this:- $PLUG is down 40% on the day, but still up 40% for the month, and up over 300% YTD. http://stks.co/t05Q8

— Jon Boorman, CMT (@JBoorman) Mar. 11 at 01:39 PM

And if this afternoon’s hard reversals in $PLUG (down 40%!!) $FCEL and $BLDP don’t have your attention, I’ve got a speculative biotech stock that is seeking FDA approval for a boredom cure to sell you :)

Trade ‘em well!
~ Sean McLaughlin (@chicagosean)


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