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Retreating Tide of Speculation


You could have given me something a little stronger than Rolaids...


In April, I went over some statistics regarding the surge in speculative trading we were seeing at the time.

By March of this year, volume in penny stocks had surpassed that of both the NYSE and Nasdaq combined, and because of that I noted that Hoofy might want to have some Rolaids handy for the summer.

The decline we've seen in many high-beta sectors since then has relieved much of the interest traders were exhibiting towards these lottery tickets - over the past few months, volume in low-priced stocks has dropped some 80%.

Despite the large contraction in speculative volume, it's still not at a point that would suggest traders have given up on them. If we saw another drop of 30% or so in volume, I'd be more inclined to think that way, but this is at least a welcome sign that the fervor of the spring has collapsed to a large degree.

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