Two Decent Trades Detailed aka Why Having A Quick Trigger Finger Can Be Good
When I shorted 2,500 shares of (KBX) at $1.79 yesterday morning, I had little idea it’d drop 20% over the next 24 hours. No, I shorted it because its chart had gone vertical—meaning it was close to peaking—it was the third big up day in a row and the price/volume had already begun to fade the day before.
Experience teaches me that it’s extremely difficult for a stock on that third day to finish green, let along up 10%+ because since it’s up soooo much sooooo quickly that buyers begin hesitating, wondering if they can buy in lower, longs start thinking about taking profits and short sellers like me begin wondering if we should pounce to take advantage of this natural cycle. So I took the morning strength as early short sellers getting squeezed, aka temporary.Unfortunately, the stock also had three negatives in my book—it’s a gold play—influenced by the price of the gold itself, aka not an ideal penny stock 
hype play, sure it’s gone up a lot but it’s only up from $1.25, aka not much more than 40 cents short-term downside and it’s on the AMEX—ridiculous price spreads between the buyers and sellers and market maker games.
And yet I shorted in the morning no less because a) the volume had faded substantially and b) sellers took out a big block of 15k at $1.79, I didn’t want to miss out on any sudden price collapse form it going green to red on the dayWithin minutes, I was up 5-7 cents on my short, but so what. The spread was ridiculous $1.72 x $1.77 so if I tried covering at the ask, I’d really only be up 2 cents. So I waited. A few minutes more and the stock bounced, but the volume remained weak and I was comforted by big sell blocks all in the $1.80, $1.81 and $1.82 range. Suddenly, a wave of selling hit, bringing the stock to $1.70 x $1.77. Ridiculous spread again.
I said to myself there’s only 4 hours left until the Fed comes out with some announcement that will influence the dollar and gold, would I want to stick around for that? Hell no, not in a less-than-ideal play that could also just keep going up gradually, squeezing shorts along the way like fellow $1 to $2 player MMTIF. So I put in a buy to cover order at $1.71, just above lots of big buy blocks at $1.70, the price that was resistance the day before (so theoretically should now be support).
Within seconds, I got my whole buy to cover order. I knew what that meant—it was going lower. Some market maker was glad to sell the shares I was buying at $1.71 because he probly had big sell orders that he knew would take out $1.70 and maybe more—considering then it’d be near unchanged for the day and probly go red.But I had my $180 profit, so I didn’t worry about it. It was a solid entry and exit and even though this stock continued to downtrend gradually until it really crashed to the $1.50 range as the Fed cut crushed gold prices meaning I basically left $500 in profits on the table, I was satisfied. Remember, I look for volatile stocks because since I KNOW my timing will be off, I just look to hop on and off along the way. Mission accomplished.
Today, I saw an opportunity to bat from the long side—buying 1,000 shares of (VLNC) at $4.12 on the intraday, multi-day, multi-week, multi-month, etc breakout of the low $4s. Event though it was mid-day, I like buying breakouts when they breakout over multiple timeframes—that way I now it pops up on trader’s technical screens and ideally it becomes a self-fulfilling prophecy.Within minutes, I was up 5-7 cents per share as the breakout did continue, albeit slightly. Now, on this one, I was prepared to hold as long as the stock kept going higher—last time it broke out of such a strong base, it went from $3 to $4 over a few days, so while I doubted I’d be able to hold that long, I was def. open to making a multi-day commitment. But there were big block sellers from $4.17, $4.18 and $4.20. Some even hid their actual number of shares, disguising their orders with only a few hundred shares, aka big-time players (I used to do that). I tried selling my shares ASAP at $4.14 to breakeven—after commissions, but only got 300 shares…had to put in another order, paying another commission, selling the rest at $4.11 and $4.10, total loss of $35. Good loss, stock now below $4, I don’t trust failed breakouts at all. Also, if this stock ever does break $4.20 on its way to $4.50+, I can buy back in! The beauty of trading, it’s like painting, trade with many, many brushstrokes, not just a few. Total profit of $145 between the 2 trades, not much $, but good risk management on less-than-ideal trades.
So back to all cash right now, stalking potential prey, not much out there, maybe a COIN short, that’s about it. Guess I’ll just devote my time to writing and blogging and reminding you that there is now less than 24 hours left to sign-up for my FREE DVD GIVEAWAY
UPDATE: Went short 400 shares of COIN at $8.78 into the market close because it cracked late day support around $9 and this Merrill Lynch rumor has got everybody scared so the overall market should be weak early tomorrow. Unfortunately, I’ve got an early meeting, so I tried covering afterhours today at $8.51 only to discover Thinkorswim’s first flaw: they cut off trading at 6:30PM even though trading goes until 8pm. Probly will help me though as COIN just has no support whatsoever now.
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1HopeHubris
March 19th, 2008 at 1:03 pm
Hey Tim - what do you think of HALO? jumpin up nearly $2 in 2 days
2Thomas
March 19th, 2008 at 1:03 pm
What do you think of PAL? Back to the $3 range?
3COINZMASTER
March 19th, 2008 at 1:10 pm
TIMMY SOLD GENC AT 15′S I GOT IN 14 SOLD 18 I MADE ON 2500 SHARES TIM MADE LUNCH MONEY !!!!!!!!!!!!!PLUS I NOW OWN SO MANY MORE COINZ
4timsykes
March 19th, 2008 at 1:27 pm
HALO, hope it goes higher, not up enough to short
PAL, metals play, who knows, who cares
Coinzmasterbater–congrats, now STFU about COIN, we don’t promote probable frauds here, we short them!
5bluecollartrader
March 19th, 2008 at 1:34 pm
Tim, As a novice at this, explain to me how one would know when a “big trader” is disguising the size of his order, as they were in your VLNC trade. You recognized it because you udsed to do it. How would we recognize it?
6timsykes
March 19th, 2008 at 2:19 pm
if u see lots of buys at a price where there’s only 100 or 500 shares selling, the seller is obviously larger than 500 shares, aka bigger or a professional trader. professional traders usually know what they’re doing, if only for 10-30 cents/share…much easier to buy or short a stock that cuts through prices like butter
7Brian D
March 19th, 2008 at 2:48 pm
These plays that break out to new highs and then decide to tank are starting to become a staple in stocks that I play and short. I got out of CEF which blew because it dropped nicely again today but I got in on HL at $12.32, I know you’re picky about what stocks you play but these ones really seem to be transparent.
8KF
March 19th, 2008 at 2:50 pm
Short SWC..back in play.
9timsykes
March 19th, 2008 at 2:58 pm
Shorted 400 COIN at 8.78 for an overnight gap down
10James Wilcox
March 19th, 2008 at 3:31 pm
Nice move Tim. I didn’t think the Fed was going to let gold stay at $1k an ounce for long.
11Adrian
March 19th, 2008 at 4:46 pm
Tim did you short coin today?? Broke 9 this is looking great on the short side buyers seem to have left.
12timsykes
March 19th, 2008 at 5:22 pm
Haha forget about money for a second for scummy industry drone. i’m os busy i have no time to sepnd the money i do have! just like i have no time to paper trade. but u r correct in 1 thing, i do make money TRADING FRAUDS. most microcraps are frauds. no reason not to trade em. in fact, there’s actually more reason because frauds, like you, are predictable.
13A-town Newbie
March 19th, 2008 at 5:36 pm
How do you find all these shitty hyped-up companies?
14timsykes
March 19th, 2008 at 5:53 pm
Yup, i’m short COIN overnight, liking this fade in afterhours
15timsykes
March 19th, 2008 at 6:02 pm
Finding microcraps and smallcraps is what i do, see my book and DVD for all the details.
tempted to cover my COIN here AH at $8.51, good thing i just discovered thinkorswim cuts off AH trading at 6:30PM, their first flaw i’ve seen
16Mike
March 19th, 2008 at 7:09 pm
Did you cover COIN today? Why didn’t you just stay short from $15 earlier, aka you can’t predict every tick but you can predict a general decline as the buying from hype disappears, everyone sells, and short sellers come in?
17timsykes
March 19th, 2008 at 7:16 pm
Why didnt I just stay short the nasdaq at 5,000? Or stay short into every top for that matter? C’mon man, do some research, hindsight is easy, especially for short sellers in bear markets…no, as i detail in my book, DVD and this post:
http://timothysykes.com/2008/0.....hilosophy/
i aim for 50 cents-$2/share…been that way for the past decade and probly will for the next one too. more predictable gains
18Mike
March 19th, 2008 at 7:23 pm
All the known pictures of Dupre, http://gawker.com/5003776/kris.....ve-gallery
19Mike
March 19th, 2008 at 7:34 pm
I looked up TIM for February and March. (The only two months posted.) 71% profitable trades. Average gain of $210. Average loss of $140. AKA not random.
20Mike
March 19th, 2008 at 7:42 pm
“Why didnt I just stay short the nasdaq at 5,000? Or stay short into every top for that matter? C’mon man, do some research, hindsight is easy, especially for short sellers in bear markets”
If the pattern is a supernova as you say, then after a runup of $10/share are you really making as much as you could by going short and covering $1 later if it drops another $9? Maybe on a risk/reward basis you are b/c you are risking much less to get that smaller gain. (And also maybe you use the order book so holding less time better.) If I was you, though, I would look at how the stocks you trade do in the period after you close the position to see if you are closing them at the best time.
Anyway, nice site. I’m going to order the book.
21timsykes
March 19th, 2008 at 7:43 pm
cool u put more calculation time into that than i did! not bad at all and thats with my horrible timing skills…
22Brian D
March 19th, 2008 at 7:45 pm
All this fraud talk is funny, wait until he has to scale his positions larger and larger that’s when it gets real interesting I’m still a baby at this although I am closer to $25,000 I have yet to deal with larger positions in stocks.
23noname
March 19th, 2008 at 8:03 pm
THis fraud talk is real…he knows about the pumped POS stocks because he and his affiliates pump them, and he knows that when they are ready to dump, it will go down,….so then, he shorts it, posts it here, and looks like he made a small profitable trade…
You idiots do not know shit about this kind of trading…its done all the time…I cant believe that I had to be the first to expose this scum from 2 minutes reading this shit…
24timsykes
March 19th, 2008 at 8:31 pm
LOLOLOLOL “my affiliates pump them” LOLOLOLOLOL i gotta devote a post to that, thanks!
do u know anything about me whatsoever? i sit on my couch all day long, my “affiliates” are my parents and soon-to-be other bloggers who get a piece for selling my DVD. i have no connections in the world of pump and dumps. those that do know me, probly want to hurt me because all i do is post about what they do and how its good to short sell into them.
LOLOLOLOLOL i’m just a trader dude
25The Barber
March 19th, 2008 at 10:14 pm
The barber was short coin since 16 and just covered today with a 55000 profit… I called coin going into “single digits’ NUMEROUS TIMES ON THIS BLOG AMONG ALL MY CALLS …. STARTING MY OWN WEBSITE WITH MORE PLAYS SOON.. WILL LET U ALL KNOW WHEN TO JUMP SHIP.. THANKS AGAIN CORN Z MASTER…HA HA HA HA HA
26Mike
March 19th, 2008 at 10:26 pm
“Look around at the most popular finance websites/blogs and you’ll see what I mean, TheStreet.com, Fool, Yahoo! Finance, CNBC, Marketwatch, FOX Business, Reuters, Bloomberg, Big Picture, Kedorsky, I could name these CRIMINALS all day.”
“I’ve long thought that Jim Cramer should be illegal, along with everyone else who purports to pick stocks on the telly.” http://meganmcardle.theatlanti.....ords_1.php
27JJ(TIMBUCKS: $72)
March 19th, 2008 at 11:10 pm
Tim- this is one of the best posts so far! I think this is why so many people return to watch and learn. Thanks for going into the detail of your trades and your thoughts behind the moves. certainly appreciate everything. your taking yrs of my leanring curve in this niche! keep it going!
28Sizman
March 19th, 2008 at 11:14 pm
Tim
Does LNN look like a decent short in the next couple days? just broke out today would expect a pull back in a crappy market
29mt_ppr
March 20th, 2008 at 12:44 am
Tim, What do you think of CHNR?
30noname
March 20th, 2008 at 1:14 am
we all want more Dupre picks TIM!
31admin
March 20th, 2008 at 3:03 am
Don’t make me do this:
32timsykes
March 20th, 2008 at 7:26 am
LLN and CHNR should have a long bias, one is breaking out, one is near support, i’ll touch neither
33asd
March 20th, 2008 at 7:48 am
If everyone thinks Tim is a fraud, then first, why are you here, and second, why not apply his ideas to stocks you choose?
The idea is not to do the same thing as Tim, especially in a game where minutes matter. If all you do is the same thing he does, of course he will always be ahead of you and profiting off your decisions.
The whole point is for you to take the concepts he is trying to teach and apply them to the THOUSANDS of available stocks. NOT the ones he is using for examples.
34Hookerfever
March 20th, 2008 at 7:56 am
CHNR could be golden Dupre to short, if breaks down below $15 with big volume. No support until around $10. Keep an eye on that one. Besides financials, basic materials are the next one going down. Though it is not Tim style (unless you look the big picture) but I am shorting XLB hooker today (or buying SMN, I prefer shorting XLB), if it drops below $38…..covering anywhere above $35 (or maybe $36).
355holeSAVE(TIMBUCKS: $5)
March 20th, 2008 at 7:59 am
Barber,
How do you walk with BALLS that BIG!!!!
Nice play; I remember that call and didn’t fully believe it through all the chart noise.
36Hookerfever
March 20th, 2008 at 8:05 am
Someone mentioned SWC to short, but there is a resistance at $15 and $14, but below $14, no resistance until $11…it, could be like brutal PAL execution.
37timsykes
March 20th, 2008 at 8:41 am
covered COIN at 8.77, scrrrratch. gotta run to a meeting, don’t trust this thing to plummet again today, too many shorts
38lmsmith
March 20th, 2008 at 8:46 am
I still have my open short on SWC since- 21.40…….. ohh yeah
39lmsmith
March 20th, 2008 at 9:11 am
Coin, is going to hit bottom…
40Tony Ellis(TIMBUCKS: $24)
March 20th, 2008 at 9:16 am
Tim, you getting in on the WMT breakout? lol