The OTC is not Dead & Why that’s a Big Deal

2022 has been a rough year for the OTC markets and overall it’s been a massive correction to the preceding bullish mania of 2020/21, but my belief is we’re in a secular bull market in the OTC and there are many stocks that are not only going to retest their 2021 highs but ultimately break through to varying degrees of success.

My argument here is that the correction of 2022 is a healthy and necessary process to help consolidate and balance all of the extreme price action and unbridled exuberance from 2020/21. The market can only dish out ‘easy money’ for so long, and after the cycle has run it’s course it’s time to flush out the excess and restore equilibrium.

The implications are huge if this is the case, because if 2020/21 was a one time deal (and 2022 wasn’t merely a healthy correction), then that likely means most of those 2021 highs will prove to be long term peaks, ie this is now a bear market which will trend down for years. However, if we begin to see many of the tickers that ran well in 2021 go on and test/breakthrough those 2021 ceilings, then that implies a breakout continuation, ie 2021 not being a long term top but a temporary top to wave 1, with an equally massive wave 2 now around the corner (wave 3?).  When you consider how amazing the market conditions were in 2021 for such a long period of time, the prospects of that only being round 1 of a much larger secular bull market spanning many years are staggering.

I can’t overstate this. This is massive! I’ve traded the OTC full time since 2006, this is entirely unprecedented in it’s scope and scale.

During that OTC bull market in 2020/21 literally hundreds of tickers went on to hit new multi year, often multi decade or all-time highs, however virtually all of them have fallen back down during the great bear market/correction of 2022.

So that’s where we now sit in the OTC. For most tickers it’s been nearly a year of lower lows and lower highs and the sentiment is bearish while there’s not nearly as much speculative money being thrown around. The question now is, does the OTC stay quiet like it has for most of 2022, or is there any evidence that there’s another euphoric bull market coming, on a similar level to what we saw in 2020/21?

The OTC is nothing like it was a year ago, and that’s why I’m getting excited as I slowly see more and more tickers somewhat quietly test, flirt and break their 2021 high water levels. A year ago everyone was bullish, everything had been running, and there was easy/hot money jumping from one ticker to another. On the surface that seems great, and it was, but that’s more of a sign of a top than it is a sign of more good things coming in the short and medium time frames. Markets are nature, and nature needs to balance itself out and the cycles of life constantly ebb and flow.

So with the sentiment full reset and all the dumb/retail money now long gone, here we are. And lo and behold what’s now transpiring at a faster and faster rate. OTC stocks are beginning to wake up, with a growing list of them coming up to retest their 2021 highs and many are blasting through to new highs, ie on those charts the 2021 peak is no longer a longer the end of the story but just the end of it’s first act.

I’m going to wrap up this article with a list of tickers that are proving my broader theory correct, one chart at a time. These tickers all participated in the madness of 2020/21, and have now gone on to eclipse those highs and at the very least are attempting to start a second wave to new highs. Keep this in mind however, the scale of these charts and moves is massive. Many of these charts will have to run quite hard just to get to their 2021 peaks, and from there the volatility will be wild. Nothing goes in a straight line in the market, so will see many tickers run hard to new highs (breaking their 2021 peaks), then fall and consolidate back below that level, and from there the bears and bulls will battle. These moves will take weeks and months and when I say that many are destined to breakout to new highs, well past their 2021 peaks, keep it in mind that it will not be straight lines up. The market will not make it easy, at least not at first, and by the time things get real easy you probably will want to begin to get defensive again. Now without further ado..

I’m going to post 10 examples of OTC tickers that follow this general theme:

  • Broke out to new all-time or very long term highs in 2020/21 on relatively heavy volume
  • Peaked somewhere in mid to late 2021, give or take
  • Went on to correct/consolidate from there, many falling far off from their 2021 peak
  • Now are back testing and breaking those 2021 highs, implying a secular bull market taking place and not a one time event back in 2021

The broad idea is that we’re looking at extensions and continuations of the 2021 madness, which means people really should be paying close attention NOW. Don’t wait til it’s a late stage bull market when everyone else also realizes it.

The reason I think these 10 long term charts currently breaking out to new long term meaningful levels is a big deal is because 1) how massive the continuation breakout moves/ secondary waves can be on charts that had such big moves for the first wave up and 2) because there are many tickers with very similar identical setups. The setups are numerous and textbook and the odds of more and more of them testing their 2021 highs and triggering a new secular bull market for them is high. So check out these 10 charts and get excited.

$CGRA made a big move in 2021, but that’s being dwarfed by continuation breakout move for wave 2.

$GTII highlights not only the absurd upside potential, but the gut wrenching volatility we can expect to see on many runs. You simply can’t have moves up of this magnitude without seeing massive corrections (healthy pit stops) and crashes (death knells) as well. That being said, at one point this year it ran from .60 to $9 in a little over 2 weeks. And despite the epic collapse from $9 to under $1, at the moment it still has put in a higher low than August low, so in theory this uptrend could still have more down the line.

The scale of a monthly chart breakout move is so large that huge crashes in price like this can in theory be healthy and normal fluctuations, and often are. That doesn’t mean holding through them is fun or the right call, and it also doesn’t mean that sometimes they’re not healthy corrections. Everything is much larger with a monthly chart breakout. The upside potential, the risk, the waiting time, the volatility, etc. $GTII really highlights that all perfectly. Now keep in mind the OTC is littered with monthly charts that are all eerily similar looking with similar atypical volume profiles, and appreciate how wild things are likely to get.

$GDVM has been an absolute monster, and again look at how this current move absolutely dwarfs the 2021 move! And that was a big runner too! It ran from the trips to the upper .00s, but this current move is just on another level. Again, THIS is why I am getting so excited and why I want everyone to appreciate what a continuation event of the 2021 phase means, as more and more of these tickers show out like this.

$WLAN is the same story. Nice run in 2021, pullback in 2022, then rally to test and break the 2021 peak. It had to run hard just to retest the 2021 high, so now comes the consolidation, BigCharts didn’t have a chart so this is a static image from TradingView.

$APSI is another gorgeous monthly chart. Huge move in 2021, necessary correction and consolidation that felt bigger than it actually was, now a successful break to new long term highs. What I want people to appreciate here is that on this scale, what felt like a massive failure and crash of the price, was in relative terms a healthy correction and consolidation, and that is what set up the move we’re seeing now. Don’t miss the forest for the trees people, and again there are sooo many charts doing exactly this – on this same time frame and scale!

$IFUS really had a nice move in 2021, and currently this move hasn’t officially cleared and held above that 2021 peak level. That being said, it looks like it’s trying and if there’s a continuation breakout to be had here, the next wave could go on to much higher levels. I’m not advising to chase here, but here’s yet another play that is at the very least retesting it’s 2021 high water mark.

$GOGY felt like it was dead in the water in late summer, but now it’s rallied for 4 months straight and is quietly sneaking up on it’s 2021 peak. Will it break through and confirm the 2021 peak was just the top of wave 1? We’ll see, but these are the plays to keep watching because the more that do bust through successfully, the more money will pour into these similar OTC plays.

$BRGC is an absolute monster. Not a bad pop back in 2021, but after pulling back earlier in the year it’s now just gone straight up for a solid 10+ months. But the OTC is dead according to Twitter.

$SRNW is a thinner trading stock but look at the volume. The biggest volume came way back early when smart money just took everything, then the stock kept floating up from there. Remember that theme, smart money loads the boat early and then just sits and waits. A LOT of these tickers are governed by that dynamic. Can you spot the tickers that have been loaded by smart money, then can you join them and be almost unreasonably patient? If so you’re going to make a ridiculous amount of money in the coming months and years.

$TGLO tells us a story with it’s chart. I feel like we’ve heard it before.

If you take nothing else from this article, take this: The OTC is not dead. In fact there’s more life and energy bubbling and building underneath the surface than you can possibly imagine. I tried to spell it out in past articles, but in 2021 an atypically large amount of capital came in to many tickers and though most of the moves have sold off from their peaks, I don’t think they were necessarily pumped and dumped and left for dead. I think lots of smart money moved in, and though there was necessary profit taking, correcting and consolidating, for many the charts are still quite strong and in position to continue to build upon what they began in 2020/21. The scale of these moves implies this isn’t going to be a short lived event. This is something to keep in mind and not let it move from there until further notice.

The 10 examples I posted are just evidence for what is taking place, but I’m not holding any of those tickers nor do I think they’re the best bets at this moment in time. I believe there are better opportunities that haven’t already approached their 2021 highs – or even woken up at all. These are plays which are quiet now but in great position to wake up, retest their 2021 highs, and then ideally break through and go on to a secondary wave (or 2 or 3) from there. I’ll follow up this article with a list or 2 of plays I believe are great examples of potential runners, similar to what I’ve shown in these 10 charts.

I hope if nothing else you can begin to appreciate the immense life changing potential that is all around us in the OTC right here and now. The fact that so few see it and realize it is all the more evidence that it’s happening, because if everyone was bullish and greedy, it wouldn’t be a positive sign. The fact that such huge moves are setting up and happening right now without much fanfare or excitement tells me we’re very early into things, which is precisely what many of the charts I’m watching are signalling.

I don’t think there’s a more important or bigger issue in the OTC right now, so I’m constantly following this macro event as a whole and more or less talking about it daily in the chat. Feel free to follow along and ask questions. It may seem overwhelming in terms of “what do I do?”, but it’s really quite simple. I’ve identified a nice list of perfect opportunities I’m focused on and I mention them constantly. I think the play is to get cheap tickets in these tickers now while they’re quiet and unloved, and sit and be patient. If you can afford to comfortably add over time into the weakness, I think that’s wise to do so. Eventually one of your tickers will gets it’s name called and when you can, then you can begin to take some profits and start to look towards some other similar plays that you can target as well.

If nothing else, simply holding a high quality setup that fits all the criteria and forgetting about it entirely will be enough to take advantage of what’s going on. If you’re new here, I’ll let you know my highest quality play is $DFCO. It’s 2021 peak was .90 and not only do I believe testing that level is a remarkably high probability event, but I also think a secondary wave is all but inevitable.

I always recommend taking some profits into the real big moves and runs, but with breakouts on this scale I also think it’s going to be very smart to leave some of your position open for ridiculously high price targets. Everyone will be different, but everyone needs to find their balance between taking profits and letting some run. That’s one of the trickiest parts of taking part in something like this, but it’s a great problem to have. I think Biggie Smalls said it best, “More monthly charts triggering massive breakouts, more problems”.