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How I Turned Yesterday’s Market Sell-Off Into an Opportunity

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Written by Timothy Sykes
Updated 8/2/2023 6 min read

When stocks opened up yesterday it didn’t look good.

The Nasdaq was down by more than 2% and the market’s fear index, the VIX, was up by double-digits.

And while I don’t trade “market stocks” I know that 8 out of 10 stocks will follow the broader market.

But that didn’t stop me from buying this weird stock that’s up more than 160% this week.

I’ll show you how I found the play, and why I believe this is the best way to make money buying stocks during a sell-off.

The State Of The Markets

artificial intelligence stocks what to expect
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For weeks now I’ve been telling my students that the Nasdaq is overextended.

Not even I could have imagined it would rally by more than 40% in just seven months.

Yesterday we saw a bit of weakness, and I wouldn’t be surprised if that continues.

But that doesn’t mean  you have to be a short-seller to make money.

In fact, some of the best plays I saw were on the long side.

Take for example, the ticker symbol WAVD, which shot up by a whopping 200% in the first hour of the day…

And the ticker symbol IDAI, which shot up by more than 90%

How does one find these types of plays and why do they work so well regardless of what the overall market is doing?

Allow me to explain…

Why Some Stocks Go Up Even When The Market Doesn’t

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The key to finding winning plays during a market downturn is to look for catalysts.

Catalysts are new information that can impact the company in either a positive or negative way.

Let’s take the ticker symbol WAVD as an example.

This is a really tiny company, with a market cap in the low 8-figures.

Why does that matter?

A few reasons.

First, Wall Street analysts don’t usually cover stocks this small.

So when news comes out, it isn’t something people could project.

On the other hand, take Apple for example, there are an army of analysts who track the company, watch iPhone sales, and analyze the business to death.

No one is really doing that with small caps.

So when WAVD announced yesterday it was awarded a seven-year contract by a large systems integrator to continue supporting a major financial program for a large U.S. Government customer…and that the company expects total revenues between $12 and $15 million over the course of the contract’s period of performance, guess what happened?

The stock exploded…

Source: StocksToTrade Breaking News

I received several messages from students who spotted this trade and were able to profit from it.

I haven’t been taking pre-market trades, so I didn’t get involved in this trade.

But I did score some nice profits in the ticker symbol IDAI.

And just like WAVD, it was a catalyst driven play.

Source: StocksToTrade Breaking News

And like WAVD, IDAI has a relatively low market cap, and no Wall Street analysts covering the stock.

So when the positive news hit…it was game on.

The headline came in the pre-market and it stated that the company received a privacy-secured  biometric identification and verification patent.

I didn’t take it in the pre-market, but I did wait for a sell-off after the open.

I overestimated how powerful this move would be.

The first time I got in at $1.74 and out at $1.86. I jumped in again, this time at $2.12 and out at $2.26. Between the two trades I had a 7.2% winner and a 6.6% winner.

Not bad when you consider most stocks were weak yesterday.

Bottom Line

It is possible to make money even when most stocks are selling. The key is to find stocks that have catalysts. The best way I know how to do that is with the StocksToTrade Breaking News Chat

Oh and one more thing, none of this wouldn’t be possible without the sacrifice the shorts make.

Need Help?

I’ve helped over 30 of my students go on to become millionaire traders. If you’re looking for someone to help take your trading to the next level, I got you.

Here are two immediate ways I can help:

  • Unlock Trading Ideas From Millionaire Traders. Instantly tap into the trading wisdom of seasoned traders. Gain access to some of our top plays at no cost to you. Click here to get started. 
  • Let Me Be Your Coach. All of my millionaire students went through this program. However, it’s no cakewalk. But if you think you have the passion and dedication needed to become my next millionaire student…then Schedule your Call today and speak to someone from my team. 

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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. Read More

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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 (205) 851-0506 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”