What a Volatile Week for SWC!

Wow! The just concluded week was an unprecedented volatile roller-coaster week for SWC on extremely high trade volumes. Let's go over the week and recent history of SWC and see what's going on.

We know SWC started to fall from the $16.47 high in early May, when SWC reported a once cents per share quarterly loss for the first quarter 2007. And then, just as people think SWC has bottomed and started buying, starting on July 20th, some hedge funds launches a fierce wave of hammering of SWC, pushing it down 10% a day, knocking the price down from $12 to the low $8-ish before the start of the week. As I discussed, the big short player was able to lure in new retail shorts by such heavy hammering of SWC, so they can unwind their unusually large short position in SWC. The big short probably finished unwinding their short position on July 30. On July 31, the volume suddenly quiet down, with no more indication of price hammering.

Monday Aug. 6th, people are buying and push SWC close to $9, in expectation of a good Q2 earnings report. Monday night earnings were released, it was a disapointing 3 cents loss. People are all pretty persimistic and expect some further fall on Tuesday. Volume was heavy at 1.5M.

On Tuesday Aug. 7th, before the earnings conference call SWC dipped to the low of $8.03, and then slowly went up as it leads to the earnings confeence call. The stock raised above $9 and closed at $8.67. Very encouraging. Volume was big that day at 2.3M.

Then on Wednesday Augu. 8th, SWC saw an explosive rally. Shot up to $11.04 on unprecedent heavy volume of 3.83M shares traded. It settle at $10.40.

Next day, DOW JONES plummeted big time. It was the second largest daily drop this year. SWC holds up well, only drop to $10.11 on heavy volume of 2.4M.

The most dramatic movement happens on Friday, Aug. 10th. SWC first rallied to the high of $10.84, as the DOW looked in pretty bad shape. Then as the DOW recoverd, SWC turned around and plummeted down to the low of $8.38, before recovering some what and close at $8.66. The volume was almost as high as the wednesday rally. 3.445M shares traded. The after hour was just as dramatic. You saw shares traded at $10.11, and shares traded at $8.64.

What gives? Why the huge rally on wednesday and then the huge plummet on friday, on extremely heavy volumes? It's any one's guess. But looks to me that some funds may be forced to liquidate position because of prior day's DOW plummet, while other funds hurried up to laod up all the cheap shares. There is a huge amount of shares exchanged hands. Institition holdership increased dramatically. Two days ago there were 139 institutions holding 37,143,220 shares. One day ago it increased to 143 institutions holding 37,340,389 shares. By friday close, there were 145 institutions holding a total of 37,453,025 shares.

In 4 days trade, a total of 12M shares were exchanged. Such heavy volume is unprecedent in SWC's history.

Such powerful rally immediately after the stock touched a bottom, and then a heavy plummet to bring to stock back to near the bottom, on extremely heavy volumes, probably suggest a very powerful double bottom formation. This is a good sign for an explosive rally starting on monday. The reason is such volatility really shakes off the weak hands of longs, leaving only whose who can hold the shares to ride the rocket up.

Also a very unusual development on Friday, is Steven S. Lucas, one of the board members, bought 800 shares from open market. As some discussed, Steven Lucas is one with some unusual background with connection to high level GOP and the Bush Administration. This is more of a symbolic market purchase to send a strong signal to the market, rather than just a buy for monetary profit. This is a very good sign.

To understand why Bush's people are on the SWC board, you MUST read this interesting article: Russians Are Coming. You also need to read the August 09, 2004, the Oct. 5, 2004, and the November 16, 2004 article on the matter.