Now obviously my trade on MS wasn’t an example of PennyStocking, but when you have a Japanese camera crew from their major network–6 million viewers–filming you, you wanna do a trade. See some pics HERE. Since I literally only have one account–my little TIM portfolio–it wasn’t a tough choice for me to buy 400 shares last Thursday when it broke the day high in the $21.60 area…

Of course, since it wasn’t my typical play and the breakout was crap (actually dropped down to $12 intraday before the SEC implemented their terrorism plan against the shorts), I sold within 1 minute for a quick $100 profit. Not even time to send out an alert. Pathetic, but if I was a scalper/trader playing big stocks like that, it wasn’t that bad a trade as I bought the breakout–even if it was a morning breakout, which are prone to fakeouts (the afternoon breakout of that same high took it to $24ish, although that was more thanks to the SEC’s terrorism on short sellers).

Same day, I saw VLNC breaking down off a 50% rise and even though I normally wait for the afternoon fade, TIMalerts forces me to be a little early so as to give my subscribers a better chance at profiting. I shorted 2,000 at $2.82, making sure to point out that $2.60 was support…well, guess what happened? It went straight to support but no more. It went straight to support, hung around there for a bit, then bounced to $3. I played it safe,–as I will always try to do–especially considering the rumors of banning all short selling (at the time)–taking a quick $350ish loss, covering at $2.97 and $3. (turned out to be the right call as it’s still hanging around there so it was good of me to reduce my risk). Some TIMalert subscribers even made $, Reaper made like $200, most lost small. Not a bad trade, just not great.

So 2 trades, neither very ideal, down $250, it coulda been worse…

Today, I finally saw some really great setups in BBI and MKTY–many more, but these were the only 2 on which I could find shares to borrow to short. Got up at 7am, reserving 2k BBI shares and 3k MKTY.

BBI dropped from the get go, coulda woulda shoulda shorted near the market open at $2.80ish, 30 cents of eventual downside…not really enough to make me very guilty, but no balls, no glory.

MKTY was holding up all day, but when volume tanked in the afternoon and the big blocks sells rained down upon the ask, I decided to short 3,000 shares at $1.95, a smaller position than I normally take, but this is one illiquid tiny company. Nevertheless, the pattern was perfect and the thing tanked 20% within an hour…yes, only 40,000 shares traded–remember, it’s illiquid–so it’s not ideal, but it’s these kind of illiquid plays from which you guys need to learn. Illiquidity is a friend of those with small accounts, use it to your advantage. One PennyStocking DVD student even said he saw the trade before I alerted everyone to it, but he hesitated. again, no balls, no glory.

All I want is $1.50ish on MKTY and I’ll have my $1,000ish profits on a wimpy little $6k investment. 16%, like a sniper, aim small, miss small.

Why do I think it’ll drop 16%?

Cuz the pattern is ideal. Look at that nasty downtrending chart and all the bitter shareholders it has created. This company is barely in business, it can’t raise $ from outsiders and was $1/share late last week before they got some good debt news. A retrace is probable, the risk is a squeeze, but I’ll cut my losses quickly if that happens. Solid risk-reward, that’s what I do practice and preach.

Tags: Bad Trades, Breakdowns, Good Trades, Press, Short Selling, TIMalerts