TIM $13,908, No Trades
Wow, strike imperfect patterns from wasting your time and you can actually get work done. Why’d it take me so long to realize this!
ORCT is up big the past 2 days, so you could’ve shorted it when it broke the day low around noon today, but you would’ve only made 25 cents/share—if you were perfect, aka tough—before getting squeezed. Sucks. TIM Lesson: Gotta wait for a down day to suck out some of the momentum before shorting or you risk getting squeezed hardcore.
COIN, COINZ and COINW all seemingly lost their momentum over the past few days, taking out multi-day support yesterday in the 9.50 area yesterday (COIN that is, all the others just follow the leader), but you would’ve had to cover before the close or else you would’ve been squeezed today. Sucks. TIM Lesson: Gotta wait for a technical level that has some real downside potential to crack. Try $7 for COIN (yup, you’ve got a long way to go), then it’s a clear path to $6. Problem with that is the stock is only up from $4 so most of the hype will be gone by then so while that $1 should be pretty easy, it’ll also take a few days/weeks, all the while you risk them putting out some fluffy PR, getting the day traders back in and squeezing your short ass. Fun!
Remember I shorted BJRI the other day—I cut my losses quickly and I’m glad I did because now it’s nothing but strength (actually a nice 5-day breakout play today at $16.60, easy 90 cents on the upside (helped by the strong overall market), squeeze those stubborn shorts, squeeeeeeze). TIM Lesson: If you’re wrong, get out ASAP, don’t wait around because these stocks will smack you around as if you’re their prison bitch. (And don’t try to rationalize the economy, the economy, the consumer, the debts, ohhhh, please shut up! Focus on technicals instead of some hazy image you think your little wannabe economist mind is capable of (not that any economist other than Keynes—yeah 50 years ago—has anything to be very proud of), they’re ACTUALLY PREDICTABLE)
HRT was actually a good short yesterday that I, severely sleep deprived as I try to get a grip on my growing blogging empire, completely missed. Feast your eyes on this chart:
Makes a short seller weep. Too bad the volume sucks. Yesterday’s crack of the sideways price action (seee now that’s sideways price action) of $9 is a clear sign to short. Get in anywhere around $8.50-$8.75 and you’re up $1ish by noon today without any bounces. TIM Lesson: Remember this pattern, 3 BIG up days, 1 undecided day where nobody knows which camp will prevail (although bulls obviously have a tough time convincing anybody buying a crap company with a bearish chart that’s nearly doubled in 3 days), 1 more undecided morning followed by some longs saying, screw this—I’m taking this bounce as my chance to get the hell out, followed by more longs thinking that and some short sellers jumping in and presto chango, an easily predictable 10%+ drop within 1 day. Behold one of the only patterns you should ever short.
This is the problem with short selling smallcaps, well, really with trading smallcaps in general, unlike eternally volatile stocks like GOOG, BIDU, RIMM, blah blah blah that go up and down $1-$2/share within minutes, smallcaps aren’t usually as liquid or volatile. That’s why most stock traders ignore them.
Buuuuuut, if you have patience, ignoring 99% of opportunities, chart patterns, plays, message board chatter, this volatility does exist, and when these patterns form, they’re a hell of a lot better on a risk-reward basis than any of those commonly traded stocks will ever be. And, they are PERFECT for those with smaller accounts, especially newbies, who don’t want to leverage up.
Patience + perfect patterns = Advantage smallcaps
Patience Daniel Son!
Posted in Patterns To Short, Short Selling, TIM Lessons