OTCPK:ASLRF - Post by User
Comment by
blacky2on Sep 20, 2007 5:37pm
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RE: Volume Average
RE: Volume AverageHere's an explanation from Jim Sinclair's mailbag from his website- jsmineset.com
Dear Jim,
Can you tell me the impact of the new short selling rules that remove the necessity of shorts having to sell on a transaction that is above the last sale or a sale the same as the last rising tic?
Yours,
Dr. Bob
Dear Dr. Bob,
The following has always been true in commodities: A short seller can enter a market for a single share late in the day and simply hit all the bids that are out there to paint the shares as being weak. Stockholders, most certainly in the precious metal shares, need to get used to it.
There is also a risk in that as they get depreciating prices a precious metals company's stock will reflect positive market interest as gold moves higher.
Your answer is all that the removal of the restrictions on short selling means is more volatility in common shares. This will certainly be the case in gold, mimicking the wildness of gold itself. It's just more casino-type action but stockholders need to know this so they can interpret properly the late day action or the action of persistent short sellers.
Sincerely,
Jim Sinclair