Recently, we have seen so many stocks blast off to the upside for no apparent reason. Gamestop Corp (GME) has been the latest popular stock to surge to levels that are unthinkable. In fact, the stock traded as high as $365.00 a share in the premarket this morning. There are many other equities that have surged recently on no apparent real fundamental news news. Earlier this month, a stock by the name of Signal Advance Inc (SIGL) surged from $0.58 a share on January 7th, 2020 to $70.85 a share on January 11th, 2020. Supposedly, this was on the back of a tweet by Elon Musk who never actually mentioned the stock. The retail crowd has gone wild and when this happens it is a sign of froth.
From my experience, when I have seen this in the past it is often a sign that the markets are headed for trouble. I call these recent market moves in GME, SIGL, AMC, PLUG and many others a dash for trash. Unfortunately, this story does not end well. In the past, these stocks and many others will return to levels where they traded before soaring and they will usually bring many other stocks down with them. Beware of the markets when stocks go wild!
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