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How To Profit From The Latest Ban On Short Selling aka How To Legally Profit From Should-Be Illegal Market Manipulation

Posted by Timothy Sykes on Thu 18th of Sep, 2008 05:59:31 PM

The government has proven time and again that they’re going to scapegoat short sellers for the sins of others who used too much leverage/power for too long, THIS latest ridiculous investigation is no different.

The UK regulator says in THIS article, they’re banning short selling in London-listed financial firms.

Not even rational takes on the situation like THIS do any good.

You can complain all you want, but that doesn’t change the situation one bit cuz every short seller has a big fat bull’s eye–if you’ve a short seller, you’re used to such ignorance, you’ve learned to accept it….most importantly, you’ve learned to profit from it.

The good news is this kind of government-sponsored market manipulation–they were already terrorists, uhhh PDT, cough, cough–is great for creating trading opportunities.

Late tonight/early AM, I’m going to do a ridiculously long post for TIMalert subscribers ONLY (will never be on this free site) of stocks that I’m looking to trade off this news tomorrow and Monday. There’s a lot of them. This is what TIMalerts is made for. You gotta sign up now at http://www.timalerts.com.

There’s no LiveStock tomorrow, there’s too much work to do. Too many potential trades. And, my fever from sleeping so little is too damn high.

Get ready kiddos, the next few days are gonna be fun!

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  • YngvaiMalmsteve
    Plenty of potential trades tomorrow, and I have only 1 day trade available to me :(

    Presidential candidates were talking about firing the head of the SEC. Maybe they can get rid of the PDT along with him.
  • why u still under $25k?
  • DT
    Sorry Tim have to call you on all your railing on the short selling. All the SEC is asking is that the laws that have been on the books forever be upheld regarding short sales. Nothing new. It should only effect FTD or Naked Short selling firms.

    You cant regulate short selling anyway, unless the government wants to form a whole new division.

    Not to be political but the greatest thing out of a candidates mouth so far was McCain saying he would fire SEC Chairman! Thats one guy who needs to be punished.
  • they shouldnt give a shit about short selling, they should be locking up/fining the executives at these financial companies
  • YngvaiMalmsteve
    Takes time to turn $5K into $25K. Plus, ever since TOS cracked down on the PDT, all it takes is a few shake-outs or mistakes and I've used up my day trades for the week. And I won't risk getting in a play in the middle of the day if I'm out of day-trades...don't want to be forced to hold something that doesn't go my way
  • CABeachBum
    Tim's a bit ignorant, DT. Haven't you noticed that by now? He's irrational, naive and young. His blogs are good for a laugh, though. I'm sure some of his little followers actually believe everything he writes about. YoungGuns, you're one of 'em. How much did Tim lose for you today?
  • CABeachBum
    You'll get there, Yngvai. Definitely enjoy reading your blog. Hope your trade tomorrow goes well and gets you even closer to the $25K!
  • total_keops
    YngvaiMalmsteve,
    open more accounts = more day trades.
  • total_keops
    DT, It's my understanding also. So, nothing changed really, unless some people/firms where "naked short" (without borrowing).
    Only political talk so that dumb money think politicians are doing "their job" (who the fuck should regulate a free market!).
    I did not read the whole stories so I can be wrong on that. All I know si that my shares are still available to short.
    Short selling has been there since Livermore, is it going to change? No.
  • CaBeachBum: Based on the amount of time you spend trolling hate on Tim's blog it's hard to believe you're as successful as you claim or that you spend any time being a "beach bum." Based on a trace of your IP address, you don't even live in California. At least live what you preach.
  • YngvaiMalmsteve
    total,

    I'm considering it, but I want my account a bit bigger. I'm not far from $10K right now. A few good trades will get me there, then I'll probably split into two $5K accounts.
  • total_keops
    >I’m considering it, but I want my account a bit bigger. I’m not far from $10K right now. A few good trades will get me there, then I’ll probably split into two $5K accounts.
    **************************************************************************************
    Even better, you can open with two brokers and have more selection for short availability :-)
  • christopher cox
    breaking news: SEC to temporarily ban short selling!
  • YngvaiMalmsteve
    Yeah, Chris, I just heard that on CNBC that the SEC is considering banning short selling temporarily
  • cosk
    WALL ST JOURNAL BREAKING NEWS: The SEC intends to temporarily ban short selling, but it's not clear if the commission has approved the move. Cox is briefing congressional leaders. Separately, the government is seeking congressional authority to buy distressed assets.



    all of tim's ranting. SEC finally fighting back. lol
  • blankman
    SEC TAKING DOWN TIMALERT BUSINESS MODEL! THIS WEEK - THE MOTHER OF ALL SHORT SQUEEZES
  • >>breaking news: SEC to temporarily ban short selling!
    ***********************************************************************************
    This is to funny only in America. In Oz we can trade CFD's no pattern day trading crap. If we lose our money it is our own fault. In the *supposed* land of the free you guys certainly have a lot of laws that attempt to take away that freedom. There is a lot less liquidity in the Australian market but there are still plenty of opportunities.
  • End of Sykes
    Today 07:37pm
    *WSJ REPORTS THAT SEC INTENDS TO TEMPORARILY BAN SHORT SELLING, BUT IT IS NOT CLEAR IF SEC HAS APPROVED THE MOVE

    If this is true your business model will be obsolete.
  • End of Sykes
    This is HUGE news. It pretty much eliminates the huge price spikes in those POS penny stocks that are spammed. With no more short covering you eliminate all the volatility. Only downward pressure will come from real selling of people owning shares.

    Tim you better get busy my man your 100K a month income just flew out the window. Gonna have to learn to trade for real now.
  • Marty
    SEC to temporarily ban TimAlert! lol
    Ohhhh, what are you all going to do who are annual or lifetime TimAlert subscribers???? Tsk, tsk.....
  • CABeachBum
    Tim trade for real??? ha! He's a one trick pony! Wipe those tears away, Tiny Tim. I'm looking for a gardener. Know how to pull weeds?
  • CABeachBum
    The lifetime TimAlert subscription was a pump and dump! Those subscribers got scammed just like the stocks they're trying to short. ha!
  • total_keops
    You guys are all on crack.
    There is no way short selling is going to be banned. No way. Think of all the business involved; program trading, hedging, hedge funds, brokers and on and on. Short selling is a big part of Wall Street cash stream. Lobbying is going to prevent such a move. Worst case scenario is the same we had a month or so ago.
    And remember in UK it's only on financials.
    Besides, I don't think short is putting such a pressure on stocks so there will always be put options. True they only trade on real stocks but a trader trades, whatever there is to trade. Anybody have a gold chain for a couple crack rocks?
  • DT
    OK Tim, I will give you that, but please tell me you are against Naked Short selling? It is a problem, and I would think even you would need to agree, since you hate crooks. Am I right?
  • total_keops
    And I come to think about it. They had a study showing that the ban a month ago had had little effect on prices.
    All this is some serious chearleaders trying to up fans with their boobs and legs.
  • total_keops
    Trainee Trader,
    one love for CFDs. But keep in mind that the market makers that sell you the CFDs have to hedge somewhere ;-) Look at CMC Markets list for Hong Kong and you will see that not all CFDs are shortable. In the event there is a bon on short selling stocks it would have an impact on CFDs I guess.
  • Peterminator
    The mother of all short squeeze will happen tomorrow with AIG !!!
    AIG going above $7.00 !
  • Wow, wondering what Tim's going to do now. Should be a funny post about "Osama SEC laden" or whatever he's been calling them. Luckily didn't sign up for the Tim alerts, if I had recently I'd want a refund.
  • So what happens to those that were holding shorts overnight?
  • Tim, looks like you wrote this article before the reports of banning ALL short selling came out.

    I am completely speechless. Well, not really. There's a slew of simple, rational arguments that any idiot (except those running the country) could spit out on demand, but this is just infuriating. For that matter, given the ethics of a whole lot of corporations, it wouldn't be terribly difficult to argue a moral superiority of short selling compared to longing a stock.

    If this does actually play out, I know I'll feel some complicity as a temporary long as the average Joe is sucked back into the market with a false sense of security and CNBC-proclaimed bottoms and then destroyed when the rug gets pulled out from underneath him.

    As for frauds, and on a positive note, at the end of the day, why not long COIN when it gets all uppity? :-)
  • SP
    how long do u have to hold a stock to not be considered a day trade? is it just past close or is it 2 days? all I have done since opening my ToS account is use my day trades each week
  • Teddy
    #24:
    Why do you think Tim keeps talking about borrows? He doesn't short stocks that he hasn't borrowed.

    Even the "bleeding-heart liberals" at NPR think that Cox is a joke:
    http://www.thislife.org/Radio_Episode.aspx?epis...

    This is just going to create more problems than it solves, and guess what...that means trading opportunities. Tim knows a short squeeze when he sees one, and he is not afraid to ride it.
  • SemperTrader
    SP,

    For the trade to be considered a "day trade" you would have to buy and sell the same stock all in the same trading day whether it be extended hours or regular market hours. If you want to avoid day trading, you will have to sell a stock on the next trading day. This makes it difficult to short stocks as you will soon run out of day trades within the week.
  • YngvaiMalmsteve
    Semptertrader,

    Day trader rule also makes it difficult to go long. I've had numerous instances where I went long, and then got "shook out" on a brief dip or something similar, and then couldn't get re-entry because of the rule.
  • SP, as long as you hold overnight you're fine, no day trade used, you just have to close the transaction on a different calendar day. As for the part about after close, no you can't buy in the morning and then sell after hours, that's still a day trade.
  • SP
    oh ok thanks yea ive used my 3 day trades this week but since tim was saying there may some tomorrow i will prbly hold til monday if they look good i just wanted to make sure there wasnt like a 2 day holding period or something
  • kshelia
    SP,

    You need to make sure you do not do more than 3 Day-Trades in 5 (rolling) Business Days. This does not just mean Monday through Friday... You have to keep track and count the 5 Business Days or your account will be put on hold.
  • kshelia
    SP,

    If you traded Mon, Tues, Fri = 3 trades over 5 days. ( youre OK )
    but if you traded the following week; Mon, Tues, Thurs, ( 3 trades, SEEMS ok )
    you would have traded 4 times over a rolling 5 day period. ( Fri, Mon, Tues, Thur = 4 trades within 5 days )
    ( youre NOT OK )
  • SP
    oh no i dont have a prob with knowing how many trades i made cuz TOS desktop software tells me how many day trades i did and whenever it reaches 0 i dont do anything i just wanted to make sure like if i buy something tomorrow like 11 am whether i had to wait til monday 11 am or tuesday 11 am... i didnt know if u had to hold it just one day or 2 days
  • SemperTrader
    SP,
    I use TOS as well and it won't even let you close a trade out if you don't have any day trades available. It will simply reject your order....no biggie.
  • This could be the single best thing to ever happen to me, see my plan in a few hours HERE:

    http://www.timalerts.com
  • Teddy
    LEH is a BUY BUY BUY at $0.05, its going to $100, all you shorts are going DOWWWWWWWWWWWWN.
  • Dan000
  • total_keops
    Teddy, do you really think anyone here or on earth is short LEH at 0.05?
    DDDDDUUUUDDDDEEEEE
  • total_keops
    >The mother of all short squeeze will happen tomorrow with AIG !!!
    AIG going above $7.00 !
    300%, one day. I look forward to see that.
    My guess is that that are not that many shorts in it after the FED took 80% of it.
    Might go up a dollar.
  • Here you go: http://www.sec.gov/news/press/2008/2008-211.htm
    Official Press Release
  • fast
    "The SEC’s emergency order, pursuant to its authority in Section 12(k)(2) of the Securities Exchange Act of 1934, will be immediately effective and will terminate at 11:59 p.m. ET on October 2, 2008. The Commission may extend the order beyond 10 days if it deems an extension necessary in the public interest and for the protection of investors"


    Whoa.

    2 weeks straight.
    The greatest financial short squeeze of all time.
    Are you ready?
  • ggirl299
    What now T?
    you get a 10 day vacation? You are worse than the annoying after midnight infomercials. If you were so "honest and non wall street conventional" you wouldnt push your lame dvd all the time and you would provide info no matter what. Well....maybe the infomercial would be a good idea....but you would have to come up with a new subject! And...yeah, the "no returns, no matter what policy" wont work. ......Go sell dvds with the old annoying "how to sell on ebay" guy.
    yeah, you made 100k, doubt it, but let's assume you did. Most of it comes from lame ass dvds, books and advertising....How's any of that info going to help someone who reads your blog to learn your "method"????????????? Open a branch of your biz? Are you starting a franchise? Stop taking advantage from people who are clueless!!!!!!!!!!!!
  • total_keops
    Relax everybody, it's only on 799 financial companies. Most stocks are ok.
    They talk about;
    "The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets,"
    THIS is the WORST market MANIPULATION I've seen yet.
  • i push my DVD so much cuz its got good information, information people need....u cant imagine the # of dumb emails i get, all, of, if not, of peoples questions are answered in it.
  • fuck SEC
    What a bunch of morons the SEC are!!!
    FACT!!
  • AP
    Does anybody know if I can buy PUTS on financial stocks?
  • ggirl299
    That's BS! You half answer most questions........and then push for your DVD. That's not honest and upfront. You are like the dummies who sell "magical weight loss"
  • too easy ggirl, this is no magic system, just a lot of lessons and rules i've learned over a decade of successful trading...other DVD salesmen arent event traders, they're just marketers, this is the easiest biz of my life, all i gotta do is talk about what i know
  • 5holeSAVE
    @ ggirl299 - with most heartfelt respect....

    STFU!!!!!!!
  • lmsmith
    My latest play---bought STT at 29.60---- and still holding booooom 69.00 pm!!!!!!!!!!!!!!
  • jeanpaul66
    A great vid and so up to date, great tune as well. 'a new guru in Wallstreet'!

    http://www.youtube.com/watch?v=6ap7OYcJqZQ
  • AP
    You know what is really funny. The SEC didn't ban Shorting the XLF.
  • Jeff C
    Anyone getting borrows for these hard-to-borrow?
  • AP
    Now if only the gov't can make foreclosures illegal it will fix everything!!!!


    (i joke)
  • El Kabong
    Free markets require short selling to keep the manipulators honest.

    Time to start jailing these greedy SOB's on wall street, send the message and restore confidence in the markets.

    I am referring to those who blatantly break the law with little fear of prosecution because of connections.

    AAAAAARRRRRRGGGGHHHHHHHHH ok i'm calm now
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