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Short Selling- Tim's Trading Challenge

5 Lessons From the CAR Short Squeeze

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs
Updated 4/23/2026 9 min read
5 Lessons From the CAR Short Squeeze Thumbnail

You saw it, right?

CAR finally drove off a cliff.

I know MANY big short sellers who were averaging up from the $200s, $300s…

… even into the $700s.

It takes a certain kind of narcissist to believe they’re right, even when the price action goes against them hundreds of dollars per share.

“It can’t keep going, right?”

WRONG!

But no big short seller will admit it.

So, all the toxic groupthink Discords full of short sellers pretend it’s not them.

They finally got what they wanted (but for many it was WAY too late)…

Avis Budget Group, Inc. (NASDAQ: $CAR) crashed on Wednesday (April 22).

After hitting an all-time high of $847.70, it dropped 47.6% to close at $443.94.

Officially it only lost 37.8% (based on the previous day’s close).

Still, that’s pretty crazy, right?

But it’s not as unusual as it seems.

Short squeezes happen all the time.

And while a lot of people want to lean into manipulation stories and conspiracy theories…

The only thing that matters to you and me, is that CAR is just another example of a pattern that happens again, and again, and again…

With that in mind, here are 5 lessons from another epic short squeeze…

The Setup: Short Squeeeeeeeze!

Check out the CAR one-year chart…

Source StocksToTrade CAR 1-yr 1-day candles, short squeeze supernova, #4 cliff dive
Source StocksToTrade CAR 1-yr 1-day candles, short squeeze supernova, #4 cliff dive

If you aren’t familiar with short squeezes (or short selling), see the links at the end of this post.

Let’s get right to it…

5 Trading Lessons From the CAR Short Squeeze

Commit these to memory (or bookmark this post).

CAR Short Squeeze Lesson 1: The “Why” Doesn’t Matter

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I get this a lot… There’s a big short squeeze like CAR and the conspiracy theories start to fly:

 

“I think I’d call this pattern… MANIPULATION.”

Or…

“Um, you do realize it was hedge funds that controlled the majority of shares that manufactured this squeeze right?”

LOL. Welcome to the stock market in 2026.

There is an overabundance of short sellers (and there are literally THOUSANDS of short squeeze examples).

More importantly, it doesn’t matter.

Whether it’s two hedge funds tying up more shares than the public float…

An old school pump-&-dump…

Or for any other reason…

When overaggressive shorts start to pile on, and it goes against them, they either have to cover (driving the price up) or blow up.

There’s ZERO mystery about the numbers.

CAR Short Squeeze Lesson 2: You Can Be Right and Still Blow Up

Imagine being short CAR, with the price action going against you hundreds of dollars per share, trying to defend your position when someone asks how the trade is going.

Image created by Google Gemini, charts by StocksToTrade, news by Barron’s
Image created by Google Gemini, charts by StocksToTrade, news by Barron’s

Seriously. Not only did that happen with CAR, it happens with short squeezes all the time.

These narcissists don’t listen to anyone outside of their toxic moron sphere.

It doesn’t matter if a stock is overextended, doesn’t deserve to be so high, and will eventually crack.

In fact, many shorts blew up on CAR (or were on the verge of blowing up).

The crazy thing?

It’s only weeks and days after several shorts blew up accounts on urban-gro, Inc. (NASDAQ: $UGRO) and Allbirds, Inc. (NASDAQ: $BIRD).

Among MANY other short squeezes.

Again, it’s not that they weren’t right about the stocks. They just can’t help themselves when it comes to timing.

Still…

More Breaking News

CAR Short Squeeze Lesson 3: We Are Eternally Grateful for Short Sellers’ Stupidity

Seriously. Shady short sellers deserve so much recognition for the incredible sacrifices they make for the greater good.

Source StocksToTrade CAR 4/6-23/26 15-min candle, short squeeze and epic #4 crack
Source StocksToTrade CAR 4/6-23/26 15-min candle, short squeeze and epic #4 crack

Their pathetic ways pave the way for great longs (over and over and over again).

So, be eternally grateful for their idiocy, stubbornness, and ego.

A message for any newbie short sellers reading this…

If you had any idea how bad the “veteran” and “expert” short sellers are doing the past couple of years, there’s no way you’d continue.

That said, thank you. Please never change. Never study. Never adapt.

Keep pretending you’re okay because my students and I LOVE these epic short squeezes.

CAR Short Squeeze Lesson 4: Study the 7-Step Framework

CAR is just another in a long line of Supernovas following the 7-Step Framework.

I had no idea my 7-Step Framework would still be happening when I came up with it in 2011.

Some people even called it a marketing gimmick. It was just my attempt to simplify things for students based on a decade of observation.

And it still plays out today.

Study it. Learn it. Review it. Memorize it.

Finally…

CAR Short Squeeze Lesson 5: Short Selling Is NOT for Newbies or Small Accounts

It’s not worth it.

I DO think you should learn how short sellers think (and how short squeezes work).

And, yes…

That means you should watch Tim Grittani webinars from 2014 to 2020 (among others).

And you should watch my hundreds of video lessons in the Short Squeeze category.

Trading Challenge students have access to both.

Look, I’m proud of my students who’ve learned to short sell. But the successful ones have a deep understanding of the 7-Step Framework.

And even they take “paper cuts” trying to short the front side of a monster squeeze.

My advice: Don’t short until you are great at going long and REALLY understand the danger of short selling.

Once you’ve seen enough squeezes, you can decide if it’s worth it for you.

I’ve made millions shorting… And I don’t short any more (it’s WAY too risky).

Millionaire Moves

I love to call out the shady shorts that create such great squeezes in the first place.

But I also have to congratulate two of my millionaire students who managed to short CAR and (eventually) get it right.

What you MUST know is that both Jack and Eduardo took losses on the front side.

And that’s okay, because when CAR finally cracked, they did well.

Just understand that they are EXCEPTIONAL traders with years of experience.

First, congratulations to Eduardo on the best trade of his career (so far).

Finally, MASSIVE props to Jack Kellogg, who took several sizable losses on CAR…

Before making it all back (and then some) on two monster trades, including this one…

Source Profit.ly
Source Profit.ly *starting stake = $12,058,891.10 cash + $24,117,782.40 margin (cash deposited in account when Jack sold)

Obviously, it requires years of experience, dedication, and hard work to achieve results like Jack and Eduardo.

Congratulate and learn from them. But remember to focus on YOUR journey.

Are YOU ready to learn the trading formula that all my 50 millionaire students used?

If so, I have great news…

Next week, on May 1st – 2nd, we’re running my Millionaire Formula Conference LIVE.

As a gift to you for being a loyal reader… 

I’ve opened up this once-in-a-lifetime opportunity to take part for FREE. 

The ONLY catch is, you have to register ahead of time…

Yes Tim! 

I’m ready to DRAMATICALLY Level-Up My Trading Skills

Now that you’ve registered…

Resources To Better Understand Short Selling and Short Squeezes

Mind you, I don’t short sell any more.

But you DO need to understand short selling and how shorts think if you want to take advantage of opportunities like the CAR short squeeze.

Here are 4 posts to help you on your journey. Be sure to read them to prepare for next week’s bootcamp.

See you next week.

Cheers,

 

– Tim Sykes

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Timothy Sykes

Tim Sykes is a penny stock trader and teacher who became a self-made millionaire by the age of 22 by trading $12,415 of bar mitzvah money. After becoming disenchanted with the hedge fund world, he established the Tim Sykes Trading Challenge to teach aspiring traders how to follow his trading strategies. He’s been featured in a variety of media outlets including CNN, Larry King, Steve Harvey, Forbes, Men’s Journal, and more. He’s also an active philanthropist and environmental activist, a co-founder of Karmagawa, and has donated millions of dollars to charity.
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* Results are not typical and will vary from person to person. Making money trading stocks takes time, dedication, and hard work. There are inherent risks involved with investing in the stock market, including the loss of your investment. Past performance in the market is not indicative of future results. Any investment is at your own risk. See Terms of Service here

The available research on day trading suggests that most active traders lose money. Fees and overtrading are major contributors to these losses.

A 2000 study called “Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors” evaluated 66,465 U.S. households that held stocks from 1991 to 1996. The households that traded most averaged an 11.4% annual return during a period where the overall market gained 17.9%. These lower returns were attributed to overconfidence.

A 2014 paper (revised 2019) titled “Learning Fast or Slow?” analyzed the complete transaction history of the Taiwan Stock Exchange between 1992 and 2006. It looked at the ongoing performance of day traders in this sample, and found that 97% of day traders can expect to lose money from trading, and more than 90% of all day trading volume can be traced to investors who predictably lose money. Additionally, it tied the behavior of gamblers and drivers who get more speeding tickets to overtrading, and cited studies showing that legalized gambling has an inverse effect on trading volume.

A 2019 research study (revised 2020) called “Day Trading for a Living?” observed 19,646 Brazilian futures contract traders who started day trading from 2013 to 2015, and recorded two years of their trading activity. The study authors found that 97% of traders with more than 300 days actively trading lost money, and only 1.1% earned more than the Brazilian minimum wage ($16 USD per day). They hypothesized that the greater returns shown in previous studies did not differentiate between frequent day traders and those who traded rarely, and that more frequent trading activity decreases the chance of profitability.

These studies show the wide variance of the available data on day trading profitability. One thing that seems clear from the research is that most day traders lose money .

Millionaire Media 66 W Flagler St. Ste. 900 Miami, FL 33130 United States (888) 878-3621 This is for information purposes only as Millionaire Media LLC nor Timothy Sykes is registered as a securities broker-dealer or an investment adviser. No information herein is intended as securities brokerage, investment, tax, accounting or legal advice, as an offer or solicitation of an offer to sell or buy, or as an endorsement, recommendation or sponsorship of any company, security or fund. Millionaire Media LLC and Timothy Sykes cannot and does not assess, verify or guarantee the adequacy, accuracy or completeness of any information, the suitability or profitability of any particular investment, or the potential value of any investment or informational source. The reader bears responsibility for his/her own investment research and decisions, should seek the advice of a qualified securities professional before making any investment, and investigate and fully understand any and all risks before investing. Millionaire Media LLC and Timothy Sykes in no way warrants the solvency, financial condition, or investment advisability of any of the securities mentioned in communications or websites. In addition, Millionaire Media LLC and Timothy Sykes accepts no liability whatsoever for any direct or consequential loss arising from any use of this information. This information is not intended to be used as the sole basis of any investment decision, nor should it be construed as advice designed to meet the investment needs of any particular investor. Past performance is not necessarily indicative of future returns.

Citations for Disclaimer

Barber, Brad M. and Odean, Terrance, Trading is Hazardous to Your Wealth: The Common Stock Investment Performance of Individual Investors. Available at SSRN: “Day Trading for a Living?”

Barber, Brad M. and Lee, Yi-Tsung and Liu, Yu-Jane and Odean, Terrance and Zhang, Ke, Learning Fast or Slow? (May 28, 2019). Forthcoming: Review of Asset Pricing Studies, Available at SSRN: “https://ssrn.com/abstract=2535636”

Chague, Fernando and De-Losso, Rodrigo and Giovannetti, Bruno, Day Trading for a Living? (June 11, 2020). Available at SSRN: “https://ssrn.com/abstract=3423101”