A lot of newbies don't understand what makes a stock go up and down. They usually figure if it goes up, it must be good and if it goes down it must be bad. Well sometimes this is almost true.. in the case of some stocks the only thing that made them move up in the first place was a) strong sentiment from the bulls (in many cases those who make you pay a subscription to get the inside news on the stock in the first place) and b) a new idea that has investors buzzing with excitement until its first NR comes out..after that the bears and bulls both have a decision to make as to whether the stock price is "too high" or "overpriced" for its true value.

Normally we have an uptrend (where everyone is buying), not unlike Noront has been seen late August of this year. Normally and uptrend looks on a chart like a verticalish line pointing up from left to right. What makes an uptrend happen.. a) positive news on a stock b) pumping of a stock (false information indicating the "extreme" potential and rumors that only the pumper knows where the stock will be "skyrocketing overnight". The opposite of the "Pumper" is the "Basher" which we will get to in a minute.

A downtrend is the exact opposite of the uptrend where the line on the chart goes down from left to right. Normally the downtrend drives the price down until it hits bottom as fear (opposite of greed) takes over and the stock plummets. A good example of a terrible downtrend was Xethenol last year. It went from pennies to 16.00 and then in the summer it went from 16.00 to 1.00 and is now .55.

Here comes the big question. Why such a drop... the ultimate answer is actually why did it go up so much in the first place. In the case of Xethenol I would surmise that Pumpers (people that push the stock in emails and newletters for free and for a fee) pushed the price up by telling everyone how ethenol was the future and this company had the best type of manufacturing of ethenol. In the end..the company was finally forced to indicate they did not have the goods to work with yet and the lawsuits then began to fall on them (of which I am in one). After the Pumpers were finished with the stock at 16.00 on came the "Bashers" and "Shorts" (those investors that invest in the stock price going into a downtrend). These investors push the price down so quickly where the sentiment of the longs (those investors who buy stock to see it rise over the future) has been "weakened" and where these "weak hands" are set to unload their shares in large volume.

The main driver that makes the price fluctuate is the volume of the stock, or the number of investors both bear and bull that wish to trade their shares. A stock does not begin to decline because everyone has started selling it. It actually stops because people stop buying it at which time a fluctuation down in the price entices more buyers. If there is nothing that makes the stock enticing to buy the downward trend can be devastating to the longs that are holding..or it can make the "Short" do very well with their investment.

Confused yet??!!

Longs Dream Come True:

Bottom line of this post...be ready for both trends this week. The trend we all pretty much want to see is a "Gap Up" where the stock price (usually after a good news release) will jump up in price a considerable amount more than what its price was before the news. In the case of Noront a gap up on Monday could mean the price going from a close of 6.72 on Friday to 8.00 on Monday morning, say after a halt, good news and at the start of resumption of the stocks trading.

Shorts Dream Come True:

If you are "Shorting" the stock (which is generally frowned on my the "Longs" you may see a "Gap Down" after a news release that may be less than the stellar kind we are expecting or which may have been already priced into the stock valuation. If this were to occur the price could go from 6.72 on Friday to say 5.50 on Monday morning after a halt and news release.

For my money, shorting a stock is very dangerous stuff. Longs can lose all their money, but shorts can lose all their money and more. Why? Shorts must be able to cover their investment if it goes up..and up may be quite a way before they can "cover" their position. Many shorts use margin accounts to cover any losses they may inccur which may be very steep. If you are a new investor on this board and you are one of the new crowd that thinks "Shorting" a stock is a "cool" way to make cash (and this is quite popular these days), I would definately think again about making the investment.

Noront has been growing steadily and the news releases are rarely less than stellar. I don't expect anything less this week..and I remain long on this stock for the record.

One final thing. Putting Stops and Stop Limits on your investment.. A "Stop" puts a limit that you will allow the price of the stock to decline before it is put up for sale "with no decline limit if the broker has a problem selling it at the price you set". This can become quite a problem if the price of the stock tumbles quickly. You may want to have sold at say 6.00 with the stop...but because the price dropped so quickly and you did not put a Stop Limit on the stock you may actually sell at 4.50 if the stock plummets that far. The worst thing comes were the stock then rebounds, which in many cases it does (look at Noront after the halt at 3.96). You have then lost all of your money down to 4.50 and the stock actually regained most of it. Must be careful. If you think there could be a large drop quickly then put a "Stop Limit" on. Please correct me if I'm wrong with the terminology, I'm pretty sure its right though.

The very last thought...be careful..do not put your house or families future on the line for the sake of greed...it will usually bite you. Put what you can into your investment..normally an amount that you can afford to lose should things go wrong. You will make less as the stock rises..you will not lose everything if it tanks quickly. Remember this and many other mining plays are quite speculative in nature. Remember also that this play has built up more support so it has less speculation built into it..but is far from being a stock to invest in and walk away without checking it. That is why this board is so instrumental to the new and experienced investors. This is why this board is meant for serious interaction..with a touch of humor is great. This is also why this board does not tolerate bashing or name calling or other inappropriate behaviour. It wastes peoples time.

I hope this post assists the newbie investors (and more experienced would be great to) to be able to grasp the seriousness of this play and any others on the market. Notwithstanding; I hope all those invested in NOT will be holding this week..the news release is deemed to be "OUTSTANDINGLY BIG". Remember the "Gap Up" I was talking about........?!!!!