The Right & Wrong Way To Short Sell A Fraud Like Kentucky USA Energy Inc. (KYUS)
Yesterday, a day after failing to be too aggressive with shorting known fraud CNEX, as it plunged from $7 to $3 and my readers made thousands of dollars, I saw a morning dip on fellow pump and dump/known fraud KYUS and shorted into it, 2,000 shares at $2.37. Although hugely manipulated, it was only up $1 or so—no $1 to $7 action—but I was afraid I was gonna miss out on a possible 50 cent drop. Not only did this trade break my trading rules—wait til the friggin afternoon you lil bitch!—but I let a prior trade influence a current one. Two major mistakes, so I deservedly was forced to cover into the late morning spike, at $2.56, rubbing the typical morning fakeout breakdown in my face. So, I finished the day with a loss of $413, after commissions, now nearly $1,000 of my highs just last week.
Today, with the stock opening slightly higher in the $2.60-$2.70 range and a morning meeting to work on TIMtv, I made sure not to even consider shorting until the afternoon. Not even when I saw it tanking to $2.40, just as I was walking out the door, was I tempted to short the 3,000 shares I reserved—if I missed it, I missed it. (that morning dip turned out to be yet another fakeout)
But by mid-afternoon, while still in the studio, after some solid sideways price action barely clinging to positive on the day, I saw the stock go slightly negative on the day and I said to myself, “this is a worthy pattern to short into.” I missed the initial drop as it just fell too quickly to $2.50, but I thanked my lucky stars that it bounced right back near the unchanged mark, just as I shorted 2,815 shares (135 shares didn’t get executed) at $2.58.
Within 20 minutes the stock was in freefall at $2.42, but it couldn’t seem to break $2.41, or even get a crack at the morning low of $2.38. With some probable Friday afternoon short covering and possible further spam mailings this weekend that could cause a Monday morning spike, I decided to play it safe, covering with a $450 profit…unfortunately OTCBB executions take a bit longer than expected, so while I was confident I’d get $2.42, I got $2.45, right at my limit for a $350ish profit, after commissions, meaning I’m down like $50 on the whole.
The stock actually did manage to take out the day low and drop to $2.33, but I was also right about the Friday short covering so it finished right around where I got out… poorly played, but the game ain’t over yet. You’ll discover that while I’m dead on about how scummy these companies like are and how different patterns will play out, for better or worse, I’ve seen sooo many patterns that I’ve become a rather conservative penny stock day trader, if ever there was such a thing. So, my timing ain’t great—mostly due to a lack of discipline, meaning an inability to wait for that one simple pattern, the afternoon fade—so anybody who wants to trade these suckers, I’ll teach you about the variables and players involved and give you my opinion based on waaay too many historical examples (a few of which you can see HERE and read about the details HERE), but the discipline part is up to you. Sound good to you?
Here’s how some others who’ve adopted my strategy have fared on this one so far:
Mark matched my $350-ish in profits
TIMbucks points leader Davey pocketed $200
Rgilles made $170 the hard way
Evan made an undisciplined $250
And good ole Jeff over at EliteTrader made a cool $1k and is now up $6k in 3 weeks!
So out of the 6 of us, Jeff wins—perhaps it’s just a coincidence but he says he’s watched my PennyStocking DVD 6 times now :)
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| Date | Stock | Buy | Sell | Net |
|---|---|---|---|---|
| Sept 4 | COIN | $5.70 | $6.21 | $745 |
| Sept 3 | COIN | $6.49 | $6.30 | $305 |
| Sept 3 | COINW | $2.75 | $2.85 | $180 |
| Sept 2 | TAYD | $7.51 | $8.13 | $545 |
| Aug 18 | FOUR | $2.80 | $2.66 | $342 |
| Aug 14 | APII | $2.66 | $3.30 | $1261 |
| Aug 12 | APII | $3.25 | $3.40 | $285 |
| Aug 7 | NOBL | $5.02 | $5.49 | $680 |
Total: $26,508 (
114%)
1investorslive(TIMBUCKS: $224)
May 16th, 2008 at 5:31 pm
Nice Tim, big fight today shorts vs long I’m sure we’ll see a squeeze… but this should head under $1.75 by next Friday… maybe lines up some buyers by Monday… and get it to three but it can’t last much longer then that
2getshorty
May 16th, 2008 at 6:04 pm
Hi Tim, I am trying to become more disciplined and aply your dvd tecniques as strictly as possible.
Need some feedback on my today’s trades
I Shorted cmk.tse (cline mining) since it broke support of $ 1.00 (shorted at 0.97). However, it got back and I ended up covering most of it as at 1.04 before the close. Not sure to hold it over the weekend. Looked like a potential fakeout
I ended up staying 300 shares short for the weekend (closing 2200 shares position before the day close)
http://bigcharts.marketwatch.c…..=0&y=0
In the morning went Long pcq.v
http://bigcharts.marketwatch.c…..&time=
Momentum on its side, but I was afraid of a weekend surprise that could create a waterfall, closed most of my long position made 4 cents. Because of execution timeout I ended up the weekend long with a huge position of $ 84.
I am going over the dvd for the xxx time and you always say short after the breakdown (CMK), however, not sure what to do when it goes back up a couple of cents….felt dangerous. Ok for the day but I would not have enjoyed the weekend.
Also maybe I am not paying enough attention , but I miss the part when you mention no to short in the morning, is it there?
Feels like I was playing with the odds on my side, so no regrets, let me know If I missed something.
3timothysykes
May 16th, 2008 at 6:21 pm
I have never traded a Canadian stock in my life, I have no idea if my rules will work on that exchange let alone stocks under $1 which I usually avoid.
And since I didnt have intraday charts for the DVD, I couldn’t very well say not to short intraday, just read though 500 blog posts and that’ll teach ya!
4getshorty
May 16th, 2008 at 6:33 pm
shit !!!
I forgot not to shior under a dollar !!!
GUess WOuld go back in the postings for a while
5Davey(TIMBUCKS: $194)
May 16th, 2008 at 7:02 pm
Gotta agree with you on the OTCBB execution. I tried to cover in the low .30s for a 300 plus gain and didn’t get filled until 2.37, but that’s part of the game.
6Blithe(TIMBUCKS: $49)
May 16th, 2008 at 7:17 pm
Tim. Thank you for sharing your mistakes. It’s great to see that even though we make mistakes getting in too earlier or not getting out of a trade soon enough, we can still make money even if not perfect.
7codyhof(TIMBUCKS: $98)
May 16th, 2008 at 7:25 pm
No love for us Canadians!
8getshorty
May 16th, 2008 at 8:47 pm
Just chequed the canadian % gainers and most of them are under $1, all supernova candidates under $1, should play on the longside intraday only. Tim made his point dealing US Crap. Lets make money and show this blog we can make money of canadian crap as well.
After my first million may put my own blog and would make my dvd to sell for $298
9getshorty
May 16th, 2008 at 8:50 pm
Can’t find anywhere to see the episodes of Wall street warriors, not up on youtube, can’t acces Tim Links, any hint?
By the way what where you doing in CNBC recommending mac donalds, side by side with a motley fool analyst? Guess if you recommended a penny stock on national tv you could have gone to jail for movin the price.
10cash(TIMBUCKS: $106)
May 16th, 2008 at 9:15 pm
Tim do you ever hold over the weekend? I know in your book didn’t you have one of your biggest gains holding over the weekend?
11getshorty
May 16th, 2008 at 9:29 pm
Yes, he made his first killing, over $ 100 k holding a stock that was on fire and was going to be featured on national tv over the weekend. Was because of that particular reason, but couldn’t sleep for the weekend
12cash(TIMBUCKS: $106)
May 16th, 2008 at 9:35 pm
so shorty how long have you been in the trading game and how have you done so far? I now have all my accounts set up and have read Tim’s book and seen the DVD and think I am ready. Next week will be my first week of trading and I am pretty nervous to be honest.
13getshorty
May 16th, 2008 at 10:08 pm
Started 2 years ago, lost a lot, like 20k, but that was before starting into pennystocking.
Peeny stocking for 1 week or so
Day trading random stocks, now I want to get even with my remaining 14k.
Sad, but learning hurts
14getshorty
May 16th, 2008 at 10:21 pm
Wotrh mentioning I would have been up a couple of thousands if my Interactive brokers would have been able to locate cnex, which I was trying to reservefrom the day before and tried to short 3 k at the breakdown
15cash(TIMBUCKS: $106)
May 16th, 2008 at 11:52 pm
Wow you are making me more nervous then I already was. Did you try trading for your only source of income or did you have another job?
16Oliver(TIMBUCKS: $32)
May 17th, 2008 at 12:55 am
“day trading random penny stocks”- seems like you havent learnt enough. tim preaches you should not randomly trade anything.
17ivegotstylekid(TIMBUCKS: $189)
May 17th, 2008 at 1:28 am
nice trace back today tim, and glad to see others winning as well. I just started the book today and love it.
18ivegotstylekid(TIMBUCKS: $189)
May 17th, 2008 at 2:05 am
PCOP up 28% today on a blood pressure study for a product of theirs. up about 34% on volume. It’s not at a shortable yet, but perhaps keep this on the watch list as the news on this should circulate over the weekend.
19Ben_Bien(TIMBUCKS: $164)
May 17th, 2008 at 8:14 am
How did anyone get shares to short KYUS? ToS kept showing a “Hard to Borrow” indicator so I could not get in on the action.
20timothysykes
May 17th, 2008 at 10:27 am
ben, u gotta pull up the chat window and ask them to reserve shares…where ya been the past few months?
21Mike_13th
May 17th, 2008 at 10:44 am
Looks like LBAS is starting its run up pattern again.
Was a great short off that pattern a few times since late Nov.
22ju
May 17th, 2008 at 10:49 am
You open up a “live support” chat window and ask a TOS employee that u want to reserve x number of shares of XXXX to short at x.xx price. It seems that they will be able to find shares for u to short if you ask in early morning but every and anytime i asked to borrow shares they always had some available.
23timothysykes
May 17th, 2008 at 10:49 am
good find mike! anybody else with some crazy charts, i’ so hungover, i dont feel like researching
24timothysykes
May 17th, 2008 at 10:51 am
PS new post is up:
http://www.timothysykes.com/20.....e-edition/
25ju
May 17th, 2008 at 11:04 am
NOG NCEN BSHF FPP CDY all reached new highs on friday and had decent gains.
EXXI and CPST are very close to breaking highs so they could be a buy.
FUQI is little bit under its high but i think this is the best buy out of these.
Just my little research and thoughts, if anybody disagree u can bash my noobness or have any thoughts about them i would appreciate if you post them.
Im just trying to try and learn.
26Bubba's Discovery
May 17th, 2008 at 11:13 am
Bubba was browsing for KYUS CEO and staff background and discovered Tim’s been typing for iStockAnalyst.com. Their page loads a lot faster than yours, Tim. Got your 15 Hot Stocks list in about 3ms.
27Bubba's Query
May 17th, 2008 at 11:17 am
Does anyone out there in blogland use the Rabbitt Q-Rank? If so, has it been useful. Bubba read what Rabbitt had to tout, but wants to know if penny-players have been doing anything with it?
28timothysykes
May 17th, 2008 at 11:21 am
thanks Ju, most too gradual for me, but FPP and CDY are on my radar
bubba, read my article about switching hosts/upgrading…all will be better in a few days
29Mike_13th
May 17th, 2008 at 1:37 pm
IDGI looks like it’s being manipulated.
10 up days in a row since 5/5.
13.2 mil shrs traded that day!!
I short under a buck all the time but I know alot of folks that don’t.
Doesn’t bother me at all,have made a bunch of $$ on the sub buckers.
Finding shrs to short IDGI,that may not be easy though.
30Evan
May 17th, 2008 at 5:38 pm
I’ve been following/stalking IDGI for at least a month- ever since I receive a lovely fax touting it. I haven’t checked it in a few days though- Thanks for the reminder Mike. Inca Designs is real, but so is the insane run-up.
31Mike_13th
May 17th, 2008 at 6:17 pm
Even,
IDGI may be for real but it is being heavily promoted from what I’ve heard.
Some of these manipulated ones can run gradually up for quite sometime.
Tim has charts of these somewhere on here.
Look at the LBAS chart from 10/23/07.
IT WENT UP EVERY DAY UNTIL 11/29/07 until it got destroyed on 11/29 going from hod 4.97 to 2.66 close!
The next day it closed at 2.20 after hitting an insane 1.30 trading on its highest volume day ever!
32ShootSteel(TIMBUCKS: $59)
May 19th, 2008 at 8:47 am
Scared of this one could not trade, always another day…always another stock.