Nasdaq 100 fell 80% last time this took place! Different this time?

by Chris Kimble

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Penny stock volume as a percentage of Nasdaq volume became a very large percentage back in Feb of 2000, reflecting that a high level of speculative trading was taking place. In the next few years the Nasdaq 100 lost over 80% of its value!

Recently Penny stock volume as a percentage of Nasdaq volume took a very sharp increase, surpassing the highest level ever, which took back in 2000 at the Dot.com highs!

Is this the holy grail of indicators?  No!

I do feel investors should be aware of this, especially when Margin debt levels are at levels only seen one other time in history, which happened to be at the same time Penny stock volume hit highs back in 2000!!! (See debt levels here)

Will it be different this time?  I suspect it will!  Even if its one third of the issue it was last time, that might be enough for a few investors!!!

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