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Is This Trusted Indicator Now Broken?

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Written by Timothy Sykes
Updated 9/25/2023 5 min read
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Even with the overall market taking a beating since the FOMC announcement…

The shorts still can’t seem to buy a win.

Yesterday was no exception…as we saw the ticker symbol RNAZ absolutely skyrocket…

Source: StocksToTrade

And while the company did announce a catalyst…

It was something totally unexpected that added gasoline to the fire.

Leading shorts to get absolutely cooked.

Is A Once-Reliable Market Indicator Now Misleading Traders?

© Millionaire Media, LLC

I always tell my students to expect the worst from penny stocks.

These companies will make new press releases to pump their stock price up…and if they succeed…they’ll usually use it as an opportunity to raise cash via a stock offering.

Stock offerings are dilutive…and are almost always seen as negative.

However, there are so many shady brokers…coupled with an oversupply of short sellers…what was once considered super bearish…is now BULLISH.

I know…it makes absolutely no sense…but this is the market we’re in.

Case in point…the ticker symbol RNAZ.

The company announced positive pre-clinical glioblastoma results early in the morning yesterday…

In addition, they issued an S1:

TransCode Therapeutics, Inc.

​We are offering 11,479,408 shares of our common stock on a firm commitment basis.

Our common stock is listed on the Nasdaq Capital Market under the symbol “RNAZ.” The last reported sale price of our common stock on the Nasdaq Capital Market on September 21, 2023 was $0.6969 per share. The final public offering price will be determined through negotiation between us and the underwriter; the recent market price used throughout this prospectus may not be indicative of the actual offering price.

Of course, dilution is typically very bearish.

However, it appeared that so many shady brokers over-allocated shares for shorts who wanted borrows. In other words, there would be likely buy-ins coming.

Second, with so many crowded shorts in the symbol, it was easy for this low-float stock to squeeze.

You see, short sellers are relying too much on logic.

Not enough on price action and risk management.

If you’re day trading, then everything doesn’t have to make sense all of the time.

There’s a reason why they call it volatility.

Things can get out of whack for several hours, even days, before normalizing. And that’s something short sellers struggle to comprehend.

Yes, a stock offering is dilutive…but if everyone is shorting a stock that has a float of less than 2M shares…it’s easy to get squeezed.

Stubborn shorts are causing stocks that have no business squeezing to squeeze.

 

How I’m Playing These Crazy Short Squeeze Plays

I’ve made an entire video lesson on playing these crazy squeezes.

You can watch it below:

Ready to Navigate the Twists of Today’s Market? 📈

Even seasoned traders get caught off guard in this unpredictable market. Take RNAZ, for example – where conventional indicators painted one story, but the market sang a different tune.

The game has changed, and if you’re relying on old plays, you’re bound to get burned.

I’ve always reminded my students to expect the unexpected with penny stocks. But now, more than ever, understanding the market’s true cues is paramount.

🔥 Shorts are misreading the signs, and stocks with no real reason to spike are skyrocketing.

🔥 What used to signal a ‘sell’ is now a ‘buy,’ and if you’re not clued in, you’re missing out.

But how do you navigate such chaos?

© Millionaire Media, LLC

🚀 Join me in our upcoming live training sessions this week.

🚀 Dive deep into actionable strategies tailored for this current market atmosphere.

🚀 Witness real-time analysis, shedding light on unexpected market behaviors.

🚀 Don’t just follow the crowd – learn to anticipate the moves.

Are you ready to move with the market, not against it?

Prepared to decode the penny stock conundrum, even when it defies logic?

Your Trading GPS in This Uncharted Territory is Waiting. Dive In!

👉 CLICK HERE TO SECURE YOUR PLACE!👈

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Author card Timothy Sykes picture

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

* 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”