RE: WHAT IS MOVING THIS STOCK???Picked this up on the stelco board....might very well apply here...Mooney
Do you ever wonder about these small cap stocks that post a tiny bit of volume and then just climb and climb? One minute the stock is trading for C$1.33 and with very little volume runs to C$2.50. Amazing? Not at all. It is the jitney game at work. This practice is SO pervasive in the small cap market that I thought you should know about it. Otherwise, you'll get trapped in the jitney game and lose a bundle. There are many depths to it and variations on it.
One has to look to the Oxford English Dictionary (unabridged) to clearly understand this word. "Jitney" was coined by The Nation, a US magazine, on November 28, 1914, referring to the Ford motorbuses, which began competing that autumn with the horsedrawn streetcars in New York City. That reporter drew this term from the slang use, referring to the five-cent piece it then cost for a bus ride. They were called "Jitney buses." It was used derogatorily toward those buses and has since been used with the idea that something is cheaply and poorly made. (There is also a racial underlying tone to this word, as it once referredto the American black, who was regionally called "a jit." Jitney evolved from jit, again used to denigrate another race.)
When I find a difficulty in locating an appropriate dictionary definition of a word, it is because that word, and especially the practice, is supposed to remain a secret, cult-like, to a few. The masses aren't supposed to know about the activity which that word defines. For instance, try finding a definition for the word, spiff. Not easy, huh? You'll come up with "to polish up" or "to spruce up" or something like that. But, did you know that "spiff" means an unreported "kickback" or "payoff" to a salesman, especially a telemarketer, in addition to their normal commission. It's usually a reward sales managers pay their salespeople after they hook a certain number of suckers to buy the company's product or service.
Jitney is the game brokers and traders play among each other, especially in the western Canadian stock exchanges. But it is not limited to just Vancouver and Alberta. It is used throughout the entire small cap stock market. My first contact with this word was when I overheard a broker saying, "We can jitney that stock over to a few other brokers I know, at other houses, and that way no one will know who sold it."
Cute, huh?
That is how the brokerage community and insiders often work. Hand in hand. There are even some brokerage firms, start-ups, which are known as "jitney houses." Their principals and brokers are quite eager to run business through their houses and rack up commissions on buying and selling of stock. There are even certain brokers who fool their own houses and rack up enormous commissions by running their stock purchases and disposals, around in circles, via a series of offshore trading accounts, which they own. An enormous amount of volume can be created in this way, without anyone really understanding what is going on.
Far more brokers are involved in the jitneying process than you can imagine. It is quietly and secretly done amongst themselves. It is frequently done every day. One of the deceptions is that it creates an appearance that there is activity in the stock. It is not uncommon for an insider to buy and sell 500 to 2000 shares of stock every day or every week, just to show activity. Some do this on Fridays, just so their companies name won't appear in the "Inactive" section of the newspapers. Whenever you see a stock that has been trading very low volume, it means that no one is really buying and selling stock in this company, but that someone is trying to make it look like activity is afoot. It is only an illusion.
That illusion is created simply to suck you in. Just like hype and promotion, which create a whirlwind of trading volume and a price rise, is designed to suck you into the stock, the jitney game weaves its magic on a less dramatic and surreptitious level. The results are the same when the stock is going up. Please realize there is a difference between a stock which insiders buy and sell, on a small scale, just to show "life," as opposed to a stock which is being jitneyed about, from house to house, with gap-ups.
The gap-up, during the jitney process, can usually be accomplished with 20,000 to 50,000 shares traded every day. The unscrupulous insider just places buy orders, on an inactive stock, through various houses, paying more and more for his own stock with each new buy order. Very few, if any, sell orders come into the market. Now, this has to be done with the tacit cooperation of the professional traders or they would fight his buy orders and stamp out any potential upward movement.
As soon as the stock makes its "run" to a higher level, and real investors come into the market, what do you think the insider does? He sells what he just bought. If it is done very well, the insider will issue a news release, pumping up the stock to an even higher level. Then, he unloads his entire recent purchase into the strength of the trading volume. If he is very, very good, he jitneys his stock way up, does a massive promo push, and then dumps a huge load of his paper into the market.
Thought you'd love this essay. Funny that the term, jitney, also refers to small, cheap boats that move cargo across small water crossings. The shoe fits again in referring to the type of people who play this game. Watch the jitney game in operation sometime. Look back over some of the stocks you've bought -- the ones that popped up a bit, just before a promo push. Darn if it wasn't the jitney game being played by a master.
COPYRIGHT (c) 1995 by George Chelekis. ALL RIGHTS RESERVED.