The Importance of Month End in the Penny market World

Month end in the penny world is important to watch. It shows all the sins of the month and exposes deals that are in trouble, credit or marginwise to keen observers. It is a tool for interpreting and listening to the market talking.
Month end is when all the bills must be paid, same as in your household or business. Quite often stock is bought without proper funding in hopes of ‘flipping’ [selling it in a quick turnaround] it and profiting from impending news or perhaps momentum.
This ‘on the cuff’ stock you will see sometimes trade in a block in an arranged type trade to a friend of the owner, followed by an identical trade 3 days later back to the selling house. This indicates unseen weakness that will have to be dealt with at a future date.

Similarily, when there is a spike in volume and price month after month on the 31st it tells a regrettable story of stock or debit ‘kiting’. It is a sure sign of market implosion. It takes a little practice to spot it. When I was a trader , we would see these trades and sell short the stock during the next month as we knew the reckoning day was coming.
Likewise, stocks whose price spike at month end to meet a margin requirement minimum{say $2) will run up to show on brokerage firms books a value of two bucks so that they dont technically fall in default of the loan outstanding or industry regulations. If you have a stock like this..you should sell this at $1.99 at month end and forget about it. Its only a matter of time before the shorters will nail it to the cross

I know its a lot to nunderstand for the beginners, and I hope the explanation is clear.If not think about it. Its like artificially inflating the price for purposes of qualifying for a loan, or ‘margin’ as it is known in the securities industry. I will try to find an example in the market…..questions are always welcome
royrogers