A Shining Example Of Why Short Selling Pumped Up Penny Stocks Rocks!

Posted by timothysykes on Wed 6th of Feb, 2008 11:52:16 AM

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TIM $14,933, Up $1,583, Thank You IDMI, Thank You PennyStocking

Short Selling 40% of my TIM assets into the face of pure insanity, aka (IDMI) up 234% on 3 month old news and a PR that failed to get much interest when it was released the day before, might seem a little crazy to some. But then again they haven’t traded THIS EXACT SAME PATTERN HUNDREDS OF TIMES LIKE I HAVE.

Over the past decade, even though the plays, the players, the message boards, the news, the industries, the % of assets I’ve used, the extent of my poor timing on my entries and exits, the patterns and the % profits have remained more or less the same. And that’s why I think I can teach this game to anybody.

TIM Lesson: It’s not about BS random picks, it’s about pattern recognition and understanding of the variables to adapt to the patterns mutations (Don’t worry haters, I won’t bring up my DVD) (oops!)

You see, as usual, I made plenty of mistakes—missing the buying opportunity on the breakout at $2, shorting too early (at $3.15), averaging up (at $3.75 to get my total average cost to $3.36), not adding to my position this morning pre-market when proven correct (Thinkorswim had plenty of shares available to short in the $3.30 range—in hindsight I should’ve added, but who knew if it would spike at the open) and covering too early (at an average of $2.90ish—right now at $2.70—and will probably go lower over the next few days) and for all my mistakes, I came away with a 40+ cent/share profit, $650ish, 12% in overnight, one of TIM’s largest to date.

Is this just the latest example of how lucky I am? Am I Fooled By Randomness? Possibly. Quite possibly. But somehow I don’t believe that it’s “random” for a stock that surged—basically due to penny stock momentum and a short squeeze—to be one of the biggest losers in the stock market the next day. Sure, sure they got that Nasdaq delisting notice, blah blah, but that really only applies to stocks under $1 so that’s not a big concern here and I doubt it influenced things much. So just take a look at these pumped up penny stock charts and see all these similar patterns. I’m not a “stock picking genius”, I didn’t “discover” these patterns (I didn’t land on Plymouth Rock, Plymouth Rock landed on me!) and there’s plenty of other people who play these at TheLion and GreenOnTheScreen, (but I’m gonna help them go mainstream (and for that, I’m taking my cut!)), You’ll notice some of these patterns aren’t similar and if you’ve read my book, you know it’s these “imperfect patterns” that have always done me in.

So I’m gonna keep playing and talking/writing up a storm about patterns like (IDMI)—ideally, focusing purely on them because they off the best risk-reward trades in the ENTIRE stock market. Sure, they’re scary, so it’s just gonna take practice and knowledge to get you guys comfortable playing them. Maybe I’ll get better at buying the initial breakouts, waiting long enough, and shorting the breakdowns, but I wouldn’t count on it. I’ve simply got too many other things to do right now, namely, writing, blogging, vlogging, podcasting and cutting through all the BS in finance. It’s a full-time job. Trading these patterns will always be up there, but remember, they’re not very scalable (no way to short more 1 million shares of IDMI, so $3mil is the max on this one, so apologies to the rich bastards out there who are only interested in scalable strategies, this isn’t for you), aka ideal for individual investors and traders.

So take a look at this annotated chart and learn. Depending on price action, I might re-short (IDMI), c’mon bounce you POS!

idmiannotated

UPDATE: Couldn’t help myself, re-shorted 800 shares of IDMI on the bounce at $3.18, covered within 10 minutes at $2.95, easy, easy $150ish. Newbies: I don’t advise shorting late morning spikes, they can go further than you expect and sometimes even turn a stock completely around (rare)…this is a true POS company though, so I would have no problem adding on the way up–that’s right Livermore zealots, I average up!

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stephen

Hey Tim, so good to have you at the Lion. I'm in the process of buying your book and DVD. Looking forward to hearing more from you.

Dan

Damn nice gain. Don't lose it this time lol

timsykes

Dan, I won't just gotta focus on these big winners, I screwed this one up completely 50 cents off the high, 50 cents off the low and i still made nearly 50 cents/share! I need that volatility to give me plenty of room for error

Alvari40

NYNY up 160% over past 7 trading days, up 50% today alone. Price now at $2.20, gap close at $3.08. Exhibiting roll over tendencies. It's a hospitality and resort stock focusing on gaming. There has been no news for over 1 week. Establishing 1/4 position here.

MFLX long play getting abump here.

timsykes

whaaat NYNY has broken out, is filling the gap and has takeover rumors galor. i'd avoid it but if anything i'd be long biased. guess we see things differently!

Nick

Impressive!

leo00o83

Nice trade, Tim! :) Did you see the action in Whirlpool (WHR) today? got a nice 5% on the stock and 71% on the short call vertical spread.

Alvari40

MFLX - nice ramp. Taking 1/2 off at 5% gain. Will see if we can break through the highs. Have itchy finger on eject button.

Tim, please pass along the link to the takeover news. I am not seeing that news, so the help would be appreciated. In the mean time, I'm short this turd until I say "Uncle". The news I am seeing is that the Tribal denial by the Dept. of Interior was "ver dissapointing" to management. Other than that????? Any assistance you can provide w/ re: to your takeover news is appreciated.

Alvari40

Took off the remaining 1/2 position on MFLX for 7% gain.

Tim - really, I am looking all over for the NYNY news - cannot find it anywhere.

timsykes

Lots of NYNY takeover links on TheLion.com, some obscure article, doesn't matter who knows if its gonna come true or not, i just don't like shorting stocks down so much off their highs

Stan

beautiful! too bad i cant short stocks under 5 bucks at scottrade, i was ready for this.

Alvari40

Tim,

Thanks for the info. I am going to press my short a bit here. The "obscure" article, in my opinion, is an attempt to allow those that lost their asses on this one to get out with some respect. Looking at the company info, the loss of the indian deal, the lawsuit afgainst the federal government (goodluck), makes this a play worth taking in the short term. Bottom line, V bottoms are rare and aint gonna happen for this pig. Makes it worth watching and entering a position. They have no real deal except for the one small track. C'mon. Why else were they trying to get in with the indians? That's where the real gaming money is - not racetracks. Here in California, the racetracks are losing their asses because of the indian deals. Why else for the lawsuit? Because their company will be destroyed by their decision. No brainer. On top of that, the chart is looking sweet with the 7 days of runup to over 160% from the lows and a serios gap close lingering just above. I am going to establish 1/2 of my position here and then wait to see if I can average in higher at the gap close. Of course, price movement and volume will dictake whether I stay in and for how long. I do respect your opinion about the plunge it has taken to this point. But remember, there was a solid reason for the plunge.

Alvari40

Up 14% on the NYNY trade. Gonna wait for a weak volume retrace to add to my position.

timsykes

nice man, post your trades here anytime!

Alvari40

NYNY entry 2.20
NYNY exit 1.62

Nice 26% gain for 53 minutes.

Alvari40

Tim,

Many thanks - always willing to share.

td

great call tim even thought there was a high risk it would stay up for three days-rock on

Alvari40

IDMI

Tim, your thoughts about if we break the 2.40 level? Another leg down for this one?

timsykes

idmi, its under $3 so i cant short it, but probly will still downtrend

eric

alvari40....what broker do you use? Thinkorswim also? Just thinking of switching over to TOS in order to be able to borrow those microcap shares. I wasnt able to borrow any!!!

eric

Tim...with TOS are you able to fund your account right away or is there a 3-5 business day waiting period. So awesome you were able to borrow IDMI shares with no problem...I couldnt find any!

timsykes

i dunno, probly a few days, just make sure u tell em i referred u!

Alvari40

Eric,

I usually use the broker that works with Tradestation since that is the platform I use. They usually are able to borrow the stocks I want. However, I had to fall back on TD Ameritrade when Tradestation wasn't able to deliver on NYNY.

eric

Tim...thanks always and congrats on your trade today! I will tell TOS that you referred me!

Alvari40...congrats on your trades also! Thanks for your reply...very appreciated!

be-the-ball

alvari,

how and when did NYNY pop up on your screen?

td

shrtd 4400 shs NRVN at $3 covered @2.75 -
shrtd MFLX@ 18.95 ---2500 shares shoulda sold more should i wait till tomorrow to cover or cover today almost a dollar a share profit already?

Alvari40

I use Tradestation "Hot Lists" and saw it this morning; however, I didn't see it on the Yahoo % Gainer list, which I thought was strange. After the weak volume push up on the 5 min chart (following the push down), and after reading what was with this company, I made the decision to short. Matter of fact, looks like it is going for leg 2 now. I am not pushing it given the 25%+ gail already in the bank.

td

looking at maybe going long on SMTK news is out----------------------

"NEW YORK (Associated Press) - Cypress Semiconductor Corp. said Wednesday it has contacted Simtek Corp., a provider of semiconductor memory products, to discuss a possible acquisition of Simtek, according to a filing with the Securities and Exchange Commission.

San Jose, Calif.-based chip maker Cypress beneficially owns about 3.2 million shares in Simtek, a 19.3 percent stake based on 16.5 million shares outstanding as of Oct. 31.

According to the filing, Cypress contacted Simtek on Monday to discuss a possible transaction. Cypress said it may seek control of the Colorado Springs, Colo.-based company through a merger or acquisition of stock, or may buy one of the company's divisions.

Cypress reported taking a 15.7 percent stake in the company, or buying 11.8 million shares, in May 2005."

or is it still a good short canidate cause price is still high??????????

WallST_Wizard

Hey tim, just for fun look at NRVN it shot from around $1.50 to $6.00 and you guessed it back down again, but it did it too fast!! However its still up 71% for the day if it breaks $3.00 could be a nice stock worthy of shorting.

td

very profitable day today Tim hooray!!!!!!!!!!!!!!!
great calls on this board!
right befor close i covered all short positions and used capital to short TGAL 16000 shrs @-$5.
hope tomorrow does not dissapoint :)
hooray again for the little nimble guy!

timsykes

tgal is an earnings mover, i never short those

better end of the day play was CTIB, ziploc deal talked up everywhere, low floater, hopefully it can really spike so i can short, much much higher

eric

Good to hear we had a profitable day in a BEAR market! Tim your blog is awesome and full of great info and insights from other traders as well! Thanks also for teaching me how to short stocks and opening my eyes to all the BULLSHIP in Wall Street! Thanks!

curious one

tim, do you suggest we short on the close or short after it tanked?

timsykes

i'm a pretty bad timer, so i don't like shorting when a stock is this far off its highs, too much spikage potential by shorts who are too greedy getting caught

Gman

Interactive Brokers had NO shares to short this morning! So what was I to do, well at least I made $200 by going long after seeing a small bit of support around 2.60. Got LONG 1250 around 2.795; Sold 2.96.

Not as good as some of you guys but I made something out of not being able to borrow for IB.

I'll take a $200.00 in 30 minutes. Even if I could've sold around 3.05, wud've, cud've, sud've...

NICE move TIMMAY!!!!

Oliver

Tim, i just wanted to let you know i am not a hater just because of what i said yesterday. in fact i like your strategy and i am trying to learn this. i am trying to learn by watching your. and sometimes i have my doubts about you and that spamming is not the thing i want to learn if this is part of your strategy. but for now i think you are the one who is not spamming but the one who is taking advantage of the ones that spam by shorting them when the stocks go back down since it is dead on that these stocks are going to go back down close to the price where they were before.
about livermore, he shot himself not because he lost his $ but because he was not playing the game by his rules at some points. anyways, i find it good that i have learnt some more about your strategy over the last couple of days. and i dont think you broke your own rules by going into the IDMI trade early. in fact it is a small rule for you since you have to get your hands on shares if you want to make profits and i congratulate your for a nice profit on this one which brings TIM further and closer to 25k step by step.

greg

hey tim,

i was wondering how you got that nifty "stocks that i'm watching" table on your webpage? did you do that, with the yahoo! charts popping up? btw, i made a lot of money today on nyny

timsykes

yahoo quotes, my website designer has all kinds of fancy tricks, this guy rocks!

singh

DESC filing shows 68% ownership is it next to be squeezed?

timsykes

i don't guess what will be squeezed next, i wait for actual signs, namely increase in price or volume. right now DESC has neither, it's dead to me

MessageFan

Nice article. It seems there is an entire subculture of message boards addicts. There are many interesting pieces of information one can find on financial boards, some are actually useful - the "research power of many" in action! Although interesting, this information could be misleading... Look at boardcentral.com - they scan all major financial message boards out there and build most read lists, stock popularity indexes and even hype barometer. Informative and useful, some even say profitable information.

Kevin

TIM, what broker are you using to short stocks under $5??

Thanks

traknologist

nice

sthomps2

I hate to see the hype associated with these stocks and love the idea of selling short with them. Many brokers, however, don't allow us to short the penny stocks. Do you have some favorite brokerages who do?

joejoe

What broker beside Interactivebrokers allow the shorting of OTC and Pink sheet stocks? Why don't you answer this question?

JOEJOE

Thanks the the prompt response. I guess you are to busy stealing people's money to take the time and respond to a simple question. Maybe it is just you do not have an answer because you are full of shit?

TIM Sykes

LOL joejoe, i use and recommend thinkorswim, do some research next time, itas pasted all over my site...and yes i have no time cuz unlike EVERY other trading guru, i blog every day, show some respect boy, i'm trying to change this industry for the better

TIM Sykes

and PS WTF are u talking about stealing other people's money? my readers make $, my premium service is 30/month, if u cant afford that go back to the ghetto and beg more

younggunz

pwnage!

JoeJoe

That is right, stealing peoples money. If you were a good trader you would be trading for a living and not selling you bullshit system to the unfortunate slobs that believe your hype. All you are is a Penny Pumping Pimp.

I think I will take a trip back to the ghetto, if I remember correctly I saw you mother down on the corner of High Street in Newark.

longshort28

c'mon man..JOEJOE...WTF...it is upto him to answer or not. This is his forum and he can do whatever he likes. He has not sent any invitation to you or me to come and post your Q & A. He is giving trading tips free to many people and also not charging a lot for Tim alerts. Poeple have made thousands on his stock picks.

TIM Sykes

silly hater, save the insults for snakeoil salesman who dont share everything...fact is my strategy is unscalable--you'd know this if u took the time to research, but like any common hater, u only have half a brain--fact is i can make $2,3, %, even 20-50k/month without any problem trading these things...i want more and under my current biz plan, not only am i helping thousands of peeps not be part of the 90% of industry losers--but i'm already approaching that 50k/month figure...in short, go fuck yourself, i'm just getting warmed up

JoeJoe

The insults are going to a snakeoil salesman (YOU!). I have been investing in penny stocks since the early 90's and I produce results in excess of $200,000 a year starting each new year off with 5 grand! Those are results. You do not see me trying to fleece novice investors out of a monthly charge for my service. I would give out my advice for free unlike Tim the Pump and Dump Pimp! Post your official tax return and we will see what you got! Such language from a so-called professional. IT JUST PROVES YOUR IGNORANCE!

TIM Sykes

joejoe moron, my life is an open book, i've been ona reality show, all my trades are audited, covestor verifies my latest 90% returns...start blogging and lets see what u got killer...whoever said i was a profesisonal? i can say whatever the fuck i want, i'm just a content provider, everything is for entertainment purposes only and u dumb haters help me entertain, so thanks, i'll send u an omaha steak

Muderous

Jerry! Jerry! Jerry!

Muderous

Hi Tim Sykes I am on scottrade myself and was wondering what broker allows shorting stocks under $5, thanks much for the info, I can't wait to short the crappy Bald Eagle Energy inc "BEEI" stock that took over 50% of my money, Myers secret stocks is such a scam, if you shorted every single stock Myers advised you would make over 70% gains, well I am still learning the ropes just started trading about a month from this writing... your blog is awesome BTW, keep up the good work... ooh yeah and JoeJoe is just a ghetto ass broke loser, he probably still drinks his mothers breast milk and shit's his pants when asleep, you should not even reply to this Dung beetle.

Timothy Sykes

i use and recommend thinkorswim, scotrader sux for shorting

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Start Here

Who Is Timothy Sykes And Why Should I Care?

See Tim's full bio HERE. Tim turned a few thousand dollars into a few million by taking small gains time after time on hundreds of volatile penny stocks, discovering that his trading strategy, while consistently successful, works best for those with smaller accounts.

Determined to teach others this PennyStocking trading strategy (learn more HERE), he went back to his original $12,415 roots (already $58,000+ even though the stock market has crashed) to show everyone how to turn thousands into millions, even while having a life (somewhat) and making plenty of mistakes. Currently he is the #1 ranked trader out of 25,000+ on Covestor)

How Can I Consistently Make Money In The Stock Market?

Hard work, Determination and Know How.

Hard work to learn how the greatly misunderstood niche of penny stocks provides opportunities every now and then on which you should pounce.

Determination to seek those probable profits out and know how in order to actually profit from them.

Long story short, wait for stocks that are extremely volatile - for whatever reason - and then aim to take small profits (between 10 and 50% within a few hours, days or weeks) here and there, either from betting on higher or lower prices (yes, you can make $ betting on lower prices, it's called Shortstocking (learn more HERE).

Why Penny Stocks?

As Tim explains in several ALL-NEW instructional DVDs (see them HERE) and in over 2000+ blog posts, penny stocks are the most hyped and corrupt niche in the entire investment world. These two qualities make them the easiest to profit from (legally) because the vast majority of people who play penny stocks are suckers and all-around ignorant people. If you have any intelligence whatsoever, you have a clear advantage and it's like playing basketball against mental midgets.

Where Do You Find Stocks To Trade?

This is the #1 FAQ (see more HERE) and it is answered in THIS instructional DVD.

Of course, that's just a brief introduction - to receive a full education, there is Tim's book An American Hedge Fund which is the story of his remarkable rise and lessons learned.

To truly increase your odds at profit, Tim has designed an entire set of detailed instructional DVDs, covering all the variables that amount to over 24 hours of instruction (see them all HERE)!

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TIM Trades

View All

Date	Stock	Buy	Sell	Net
Nov 19	AENY	$2.80	$3.02	$1148
Nov 18	NLST	$4.16	$4.40	$947
Nov 18	IMGG	$1.42	$1.64	$2094
Nov 17	NLST	$5.04	$5.59	$2195
Nov 13	VRMLQ	$21.50	$22.97	$2901
Nov 11	EONC	$2.61	$2.80	$687
Nov 10	EONC	$2.74	$3.36	$9784
Nov 6	QXM	$4.31	$4.80	$1936
Nov 4	COT	$8.66	$8.88	$642
Nov 4	QXM	$4.61	$4.89	$822
Oct 30	DDRX	$25.70	$26.53	$812
Oct 29	CTDC	$4.00	$4.42	$781
Oct 26	AWSL	$3.24	$4.10	$2516
Oct 23	RODM	$5.27	$5.23	$301
Oct 22	AMLM	$2.69	$2.97	$820
Oct 22	USEG	$6.12	$6.09	$85
Oct 20	CBOU	$8.93	$9.06	$243
Oct 16	VRMLQ	$16.79	$18.65	$2773
Oct 13	YONG	$11.05	$11.66	$1202
Oct 13	NPHC	$0.59	$0.71	$583
Oct 12	IMGG	$0.60	$0.70	$682
Oct 9	ZAGG	$5.50	$6.10	$2380
Oct 7	GVBP	$0.03	$0.27	$702
Oct 1	NPHC	$0.70	$0.85	$1482

Total: $98,094 (681%)