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A Down Market Creates Better Short Squeezes

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Jeff Zananiri
Updated 11/9/2026 7 min read
A Down Market Creates Better Short Squeezes Thumbnail

My best play last week was on a scammy, low-float company with a history of doing reverse stock splits just to stay listed.

Some students were saying…

“That’s a China scam company, don’t trade it!”

Here’s my answer to that (based on 28+ years of experience)…

I just trade the volatility.

I don’t mind trading scam companies because I recognize them for what they are.

I’m not going to hold them long-term…

It’s not an investment…

It’s just a trade based on the price action.

I recognize the risk and love the volatility.

And when the market is down, like it was last week, it’s even better because…

Overaggressive Short Sellers Start Frothing At the Mouth

This is what happens when you have a down market.

Last Wednesday (Nov. 4), Ohmyhome Limited (NASDAQ: OMH) went from the $3s all the way up to $12.

I bought it in the $8s, thinking it could retest the morning highs. My goal was small, I only wanted to sell into the double top around $8.70.

OMH 11/4/26, 1-min candles, breakout trade
OMH 11/4/26, 1-min candles, breakout trade

As it turned out, it did break out, got halted, and I made roughly $3 per share (starting stake $8,180).*

After that, OMH came all the way back down to the $3s.

In a hot market like we’ve had for most of this year, you’d see one big squeeze and it would be over.

Shorts get squeezed, then it’s done, right?

But when the market starts to crack, short sellers start pounding their chests.

“Oh, the market is crashing. Sell, baby, sell…”

The problem for short sellers now is that as they get more aggressive…

It Opens the Door to Better Squeezes

Post image

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The Night Tape, every trading day after the closing bell, plus The Second Session guide.

That’s what makes the two charts you’re about to see so beautiful (and even scarier for short sellers).

First, here’s what happened with OMH the rest of last week…

OMH 11/4-6/26, 1-min candles
OMH 11/4-6/26, 1-min candles

OMH squeezed again after I traded it on Wednesday, from the $3s all the way up to $18 in after-hours trading.

If you missed it, don’t feel bad (that’s such a low-odds move).

But a move like that only happened because the overall market was still uncertain after the election. It was trying to choose a direction.

Then, when the market was tanking on Thursday, somehow OMH held up.

Of course, that got shorts pounding their chests again (as usual).

On Friday (Nov. 6) they got squeezed big time in after-hours trading.

But that was only the start (this is where it gets CRAZY).

Look at what happened yesterday (Nov. 9)…

v
OMH 11/4-9/26, massive short squeeze on 11/9/26

OMH was trading in the $13s in premarket yesterday.

It squeezed to $85.97…

I know it’s counterintuitive. And I’m aware the market had a big bounce yesterday.

But short sellers are still frothing at the mouth with the prospects of an even bigger crash.

They’re so stuck in their toxic ways that OMH might STILL have juice in it…

Now do you see why a down market can create even better short squeezes?

I don’t know if the market will crash again, but if it does…

Thank you ahead of time, short sellers, for your sacrifice!

Millionaire Moves

BIG shout out to long-time Trading Challenge student Himmeny who is CRUSHING it this year.

I recently had the opportunity to talk with Himmeny about his 10-year journey.

Keep your eyes on this space because I’ll be featuring my interview with Himmeny very soon.

I can tell you this…

If you’ve struggled, if you’ve had doubts, if you’ve wondered whether all the effort is worth it…

You’re going to LOVE his story.

In the meantime, HUGE props to Himmeny for sticking with it.

Catalyst Watch

The potential downfall of Nvidia (NASDAQ: NVDA) CEO Jensen Huang could have a big effect on the AI trade.

Huang has been pushing for less AI regulation regarding chip sales to China.

Since he allegedly got caught in a Chinese honeypot trap, his argument is shot.

The Direxion Daily Semiconductor Bull 3X ETF (NYSE: SOXL) shrugged it off yesterday…

SOXL 11/9/26 1-min candles
SOXL 11/9/26 1-min candles

This is an evolving story and it will be VERY interesting to see what happens next.

Key Takeaway

OMH is an example of why I love a down market.

Not only do I think it’s good to punish over-leveraged HODLers…

It opens up more volatility.

And THAT leads to better short squeezes.

Whether it’s for dip buys or short squeezes…

I hope we get a bigger crash and the volatility continues.

Cheers,

– Tim Sykes

*Results not typical. Past performance is not indicative of future results.

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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”