To OTC Journal Members: 
 

FrogAds (OTC BB: FROG) Leaps To Profits

FROG is behaving very well for us today- it broke up to the $.40 level just as I predicted. It's now up 30% from last week's alert, and as I mentioned in yesterday's edition, this surge could be a good profit point for traders- up to you.

Longer term the traffic on the company's site is growing rapidly, so there could be a lot more upside in this idea. I've now provided two great entry levels on this idea- it's up to you to take advantage of them if you like. 

North Springs Resources (OTC BB: NSRS): Use Extreme Caution

North Springs- a stock I've been following since Dec 27th, is simply too good to be true. I'm kicking myself for not buying some, but I'm sure if I had I would have sold it by now. This has been a red hot penny stock, and I wish I'd covered it back then.

However, if you're in this one, extreme caution is warranted at this level. First of all, I believe you'd have to be insane to buy this stock at this point. The early promoters have done a marvelous job bringing a huge audience to this story, and the stock has gone berserk.

However, charts like this always have an unhappy ending. I suspect yesterday's giant bar up was a short squeeze. At some point this stock will turn south, and getting out will be a very crowded trade. I predict you will see the stock lose 70% of its value in one day.

A quick look at the SEC filings can give a little insight into what the company might be worth. As of the last quarterly filing, the company had total assets of $60,000, and $16 in cash. Yes- that's not $1.6 million- that's actually $16 total. Not even 20 bucks.

Since the end of October the company has entered into an arrangement to be able to borrow $1 million in cash from a creditor, so they are not penniless. Far more interesting is the market valuation.

At last count, there were 696 million shares I&O. 80 Million of those shares were cancelled on December 29th, leaving a total of 616 million shares I&O. So, based on today's price of about $.90, the market is placing a value of over $.5 billion on this start up mining company in Nevada that's never put a drill bit in the ground.

The huge jump Tuesday looks to me like a short squeeze. Market makers who looked at the fundamentals and the promotion probably went short in the early going, but were blown out of their positions and forced to buy.

I'm not saying this stock can't go higher. I have no idea if it will or it won't. I'm just saying use extreme caution if you're looking to buy this stock, or consider taking your profits. When it collapses, all the hot money will be looking for the door, and this sort of crowded trade never goes well for buyers at the top.

It's known as holding the burning match. The last one holding the burning match gets their fingers burned.

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