Signs of Speculation With a 4 Billion Share Penny Stock Trading Frenzy
Sure, the Nasdaq traded 15 billion shares. But the action was concentrated in the Semis, as expected, and a penny stock, not expected.
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Nasdaq traded nearly 15 billion shares of stock on Tuesday. Typically, if Nasdaq trades that much stock, and it’s a down day, I would expect to see the QQQs trade well over 90 million shares. Yet that’s not what happened. The QQQs traded about 50 million shares.
Let me remind you that a few weeks ago, when Nasdaq had that early June swoon, the QQQs had back-to-back days with over 90 million shares traded. But on Tuesday, all the action (aside from the semis) was in the penny stock that traded—wait for it—four billion, yes with a B—shares of stock. So if you think there was any panic, please think again. We haven’t seen this much speculation in penny stocks since October.
Was there selling in the semis? Oh yes. Was there panic as there was a few weeks ago? Not that I saw. And the chart of the SOX? As much as I hate these kinds of charts (too much up, not enough basing) the SOX did not even get to the uptrend line that has been in place since late April. It did not make a lower low either. I suppose it is possible Micron will cause the chart to change when its earnings are reported late Wednesday.
The QQQs are similar to the S&P in that they are trading exactly where they were on May 6th. That means we’ve had seven weeks of volatility with nothing to show for it. But back on May 6th Nasdaq had 562 stocks making new highs. Tuesday, there were 150.
Back on May 6th, Nasdaq had 122 stocks making new lows. Tuesday, there were 279 stocks making new lows. So, under the surface, we’re seeing a reduction in stocks making new highs and an increase in those making new lows. Not exactly the healthiest market.
Now let’s turn to the Dollar. Outside of the currency folks, there was very little fussing over the buck’s move this week. That’s a breakout. I am embarrassed to admit that I have been bullish on the dollar for nearly two years (July 2025). If that doesn’t show you how long it can take to form a proper base, I don’t know what does!
There is a bit of resistance at 102 from that spike high in May of 2025. Now comes the bad news. The DSI on the buck is 82. I imagine if it can make it to 102, that DSI will be at least at 85, and I suspect even the stock folks will be chattering up the move in the Dollar Index.
I will end by noting the DSI on oil is still 17, and I am still looking for an oversold bounce there. The DSI for gold is back to 13. In this area, I would nibble. At 360 on GLD (where all that support is), I would expect that DSI to be 10 or even single digits. Probably the same time the DXY’s DSI gets to/over 85!
