Penny Stocks

Does the World Cup give Penny Stocks the Boot?

Typically in America many sports fan are not only skeptical of the World Cup, but of soccer in general. However, in Europe and most of the world it’s a blue chip sport. To some it’s the only sport. Consequently, dominating foreign news headlines and European interest. But it’s over on Sunday. What’s the next hot news cycle in Europe? I’d say the European bank stress test results which are due out in roughly two weeks. The US markets have gone through this once and these tests provided a lot of uncertainty to our markets.

Now does this filter down from the FTSE and NYSE to the OTCBB? It could for one reason. That reason is called liquidity. Summer volume is typically low already and the pending stress test results will most likely get lots of play on CNBC, FOX Business News, etc. Now what that means to the retail investor who plays penny stocks is simple. In times of uncertainty, he usually buys less if at all. Penny stock traders may be able to take advantage of this uncertainty on the other hand. Investors could be waiting for companies that were once hot penny stocks to wash out to a cheap level if the stress tests wreck the market. On the other hand, the results of these banks could already be factored in and we could see a flat market.

Unemployment rates in Portugal, Ireland and Spain are already at or near historic highs. The news may be already baked into the cake. So be ready as always. If we do see a sharp correction some quality penny stocks could dip and give you an opportunity to profit in a fast trade based on somebody else’s weakness. So have your penny stock list locked and loaded and always be ready to pull the trigger if it makes sense.

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