Blog : How to Play These Frantic Markets

by Peter Leeds on February 9th, 2016

Frantic is the perfect word for the current stock market.  Think about it - when someone is frantic they charge course; scramble; act before thinking; suddenly reverse direction; adjust strategies; come to decisions instantly.

In fact, the trading methods people are employing right now in blue chip stocks, penny stocks, bonds, and even real estate, show no signs of thought, relaxation, wisdom, or strategy.  Much like people scrambling back and forth across a swaying raft, the vessel continually gets closer to capsizing... until it eventually does.

Unfortunately, the stock markets have gotten too frantic.  Investors are searching for 2 things at once:  bargains and safety (which just so happen to be polar opposites, like fire and water, or sunshine and shade, or bonds and penny stocks).  

Even today, the DJIA and the NASDAQ opened trading down...

...then turned positive...

...then fell back into negative territory...

...then climbed again into positive territory...

...then fell again...

That's just what has happened so far today since the markets opened, it's only been 2 hours and fifteen minutes!

Well, we are used to that degree of misdirection and volatility among penny stocks, but certainly this has been a new level of market activity for blue chip and conventional investors.

This type of trading activity has unfortunately become much more commonplace, as people continue to get more frantic.  They seem to be looking in every direction for leadership, strategies, and answers, but aren't able to figure out what to focus upon.

Overall market volatility has been increasingly significantly, when compared to previous years, and decades.  In fact, this includes not only stocks and penny stocks, but commodities, precious metals, and even bonds.  

Typically, increasing volatility can mean one of two things:  a market top, or a market bottom.  In the current environment, perhaps there may be a bottom being indicated... if it were not for the approaching global recession.

Everything from speculative penny stocks, to long term bonds, to oil prices, to corn have all been taking a beating.  All of this may imply we are sitting at a market top (or close to it) right now.  

Many of the lagging indicators which are going to demonstrate that we are in a recession right now, have yet to be officially released.  They will be in the coming months, and people will only then be able to look back, and say, "turns out we were in a recession back then!"

I have theories and opinions about how all of this will play out, in terms of real estate, precious metals, bonds, penny stocks, large cap stocks, and more.  However, I am first and foremost the penny stock guy, and along with my penny stock analysis team we focus on the most speculative, volatile portion of the markets.

All of the considerations mentioned above are why our latest penny stock selection was chosen:

- in an industry immune to recession
- very healthy balance sheet (especially for a penny stock)
- improving business metrics (across all departments)
- massive $70 million backlog of waiting orders

It will be penny stocks like that (which we profiled a few hours ago to subscribers) which will come out on top, regardless of how frantic the markets become.  In the meantime, the worst thing any investor can do in a frantic market is to become frantic themselves.  

Instead, do nothing.  

Let the frantic people take their frantic actions, while you prepare to take advantage of the hundreds of excellent opportunities (mainly in high-quality penny stocks) which most people are completely missing.  Notice all the frantic actions all around you, then pounce on specific penny stocks and equities while everyone else is distracted, and afraid, and changing direction, and yes... frantic.