December 24th, 2007 Review
TIM $14,404 (up $102 on the day)
Sold 200 shares SOLF @ $29.10, Shorted 150 shares @ $32.20, Covered at $31.86
25 Days Until I Can Sell my 150 Shares of SWIM
Yet
yone/”>another perfect call on (Nasdaq: SOLF) today (add that to my list of the past few weeks RIGL, JMBA, ASHW) and you might wonder how I only earned $100 on the day when if somebody had just hit me over the head with a baseball bat and prevented me from second guessing myself, I’d have earned $878 just holding the damn stock all day! But that’s the beauty of my situation and that’s why I’m a better teacher than I am trader and why I’m selling a DVD to show you what I know and what I’ve seen so you can do better than me. Truly.
I’ve already gotten a few emails today from readers of my work who’ve made several hundred to several thousand off SOLF’s 15% gain today, so I’m happy. One guy who bought my DVD even emailed me as I was writing the SOLF article for AOL because he saw the chart pattern a mile away. That makes me damn proud that my DVD works! To be a salesman for a second, the guy says he made $1,800 on SOLF today, or 6x my DVD’s price. And, following my preaching, he says he didn’t even use leverage. Makes a teacher proud!
Back to the part that makes me not so proud. After seeing somebody spam my blog post everywhere this weekend, I began thinking about how many others were also counting on a strong gap higher and I became noticeably nervous pre-market. After 30 minutes or so of being up 75 cents, the stock had a great deal of trouble holding near Friday’s highs in the $29.40 range. I tried to tell myself a short squeeze would be most likely at or near the market open, but when I saw a few sellers push the price down to the low $29s, I knew I had to get out. After all, volume was only 30k and with that kind of liquidity and the stock up so strongly on Friday, things could turn ugly quickly. I panic sold my 200 shares at $29.10, a horrible execution, but who really cares about 15-30 cents when this stock could tank $1+ within a few minutes.
I psyched myself out. The stock held near $29.50 and at the open jumped past $30. I tried to buy back in with 150 shares with a limit of $30.02, but it moved too fast for me to get an execution (aka specifically why I bought Friday – to avoid this situation) and all of a sudden, it was in the $31.50 to $32 range. Damn, what an idiot – and easy $500 down the drain. Never gave myself a chance. I wouldn’t have counted on it breaking the $31.80 high so easily, but morning squeezes are faster and go further than what anyone thinks possible.
Later in the morning, I saw it struggling to hold its gains (as evdidenced by a wall of sellers) so I shorted 150 shares at $32.20, trying to capture a quick $1 on the downside. Risky, risky trade. After all, when the stock breaks the resistance at $31.80 to the upside, that point becomes support, and just as I don’t count on stocks breaking through resistance, I definitely don’t bet on them breaking support. Nonetheless, I was right about some longs being nervous as to how quickly the price surged, so I covered my 150 shares at $31.86 for a quick $40. Stupid trade, but I felt I needed some profits since I was so right about this stock gapping higher. TIM Lesson: Never try to force profits just to reward yourself for being correct in your thinking. There will be many times when you’re correct in your thinking, but wrong in your trading. Accept it; don’t resort to wild trading as that’s how losses are created.
I got lucky with my short – it’s a bad example for an important lesson. SOLF closed near its highs on strong, strong volume (given the half-day), so I’d expect further strength ahead, but it’s not as predictable because now the stock’s run up quickly and new shorts are looking to enter. I’ll wait to see how this plays out before I get short happy, this is a confirmed breakout.
(Nasdaq: SWIM) was predictably boring, still holding my shares, determined to see if I have the patience to hold for an entire months. Odds are 30 to 1, I’m accepting bets.
Here’s a funny link of some newsletters that are really full of BullShip. Kinda funny to see some respected names there, goes to show you what credibility in this business counts for (nothing). These guys should refund their subscribers and refer them to me!
I’ll have another post tonight or tomorrow with all the other stocks I’m watching, right now I gotta go see Charlie Wilson’s War that just opened up across the street from me.
