Hey, Traders,
We’re only a few days into the new year, and already some over-the-counter stocks (OTCs) are suddenly running 30%, 50%, and even 100% in a day.
It’s exciting, and for newer traders, it can look like easy money.
But just because there’s movement doesn’t mean there’s opportunity.
If you chase every runner without checking the bigger picture, you’re going to bleed slowly on the fake ones and miss the real ones when they come.
Right now, we’re seeing signs of the classic January effect, which I’ll be going over live tonight at 8 p.m. ET.
I’ll discuss how this phenomenon has sparked big moves in small-cap stocks at the start of the year for about a century.
In the meantime, let’s look at OTCs.
All Fumes, No Substance
What I’m noticing right now is a lot of current plays have volume, but it’s not quality volume.
You’ll get a 9:30 a.m. pop with a huge one-minute candle … then nothing.
Or you’ll see a mid-day breakout driven by Twitter chatter or a Discord pump, rather than actual demand.
That’s dangerous because it creates the illusion that the OTC market is back, but it’s more like a mirage than a real trend.
The smart thing to do right now is slow down and be picky.
When OTCs heat up, it’s tempting to trade everything that moves.
But these are the moments when patience matters most.
You want the play that proves itself, not the one that looks good for five minutes and fades the rest of the day.
Watch for Red Flags
Because of that, I’m focusing on tickers that can hold gains, ideally with multi-day runs.
If something spikes and dies by lunch, I’m not interested.
I want to see strength into the close, signs of real buying, and ideally a breakout level that’s been tested a few times.
That’s where the cleaner moves tend to come from.
Also, be aware of who’s talking about these stocks.
If a play is all over social media but there’s no real reason behind the move, that’s a red flag.
You might still be able to scalp it, but don’t fool yourself into thinking it’s the start of a big trend.
I’d rather sit it out than force a trade on something that has no real legs.
Waiting and Seeing
It’s still early in the month, and things could pick up significantly.
If the OTCs keep getting attention and we start seeing real runners hold and extend, I’ll lean in heavier.
But until then, I’m staying light, waiting for A+ setups, and avoiding fluff.
There’s no reason to go all in on a sketchy play just because it’s January.
So, be alert, watch the price action, and when the right setup comes, strike with confidence.
For now, that means protecting capital and studying moves while the market sorts itself out.
Stay sharp,
Jack
