The Old Morning Drop Following The First Down Day After A Big Runup Trick
Going into today’s session with my overnight short of PDO, I was confident, if not ecstatic because I’d shorted into the first negative day of a decent-sized runup, even if it was KOG-like commodity play. At the market open, volume was very very light—5,000 shares in 10 minutes and yet when sellers took out the one bid at $6.20 that took it all the way down to $6.01…I didn’t want to cover right away as I thought it’d take out $6 and then stop loss selling might cause some panic, but bids piled up at $6.02, then $6.03, then $6.05…screw that, I covered at the ask at $6.15, making $27 after commissions.
Afterwards, some more sellers did come in and on total daily volume of 25,000 shares, the stock was $5.90 x $6—so I left $100+ on the table…boooo hooo, due to the illiquidity and it not being an ideal play, I played it safe.
I was ripping my self until just after 11am when those who didn’t play it safe discovered what an illiquid short squeeze 
feels like as the stock surged from $6 to $7.5 in under an hour. While I frequently miss out on easy gains, I don’t risk large losses or disaster—and that’s something which I’ll always be proud to promote, especially because PennyStocking exemplifies conservative penny stock trading (yes there is such a thing), where you don’t have to be dead on all the time to make money.
PS This is hardly unique to PDO, see FEED’s chart below—the key is covering into that panic selling caused by stop losses, then you just stand aside and watch the longer term shorts squeal as FEED pig f$#@s them!
Enjoyed this post? Sign up below and never miss a post again!
LoadingTIM make you some $$$$? Help him pay his expensive web designer!
Related Reading
9 Responses
Trackbacks
Add a Comment!
If you want to receive TIMbucks, you'll first have to Login before posting a comment. Click here to learn more on the new TIMbucks rewards program.
Top TIMbucks
Join the ranks! TIMbucks is a cool new rewards program designed to get you guys to share your thoughts, ideas and experiences openly. Our top TimBucks earners to date are:
- Davey (157)
- Yngvai (133)
- ViciousChicken (105)
- ivegotstylekid (82)
- timothysykes_forums (76)
- jj (72)
- Dan_O (50)
- Ben_Bien (47)
- Blithe (45)
- jesseb (42)
Navigate
$
Updated Daily!
136 Books
Up 52%
20 Videos
3 Podcasts
8 Talking Pics
65 Links
Stocks Review
UPDATES
May 16, 2008My whole KYUS saga...still a solid profit of $350 today, the only time I shoulda been playing this stock
May 16, 200810 stocks to watch today
PDO already up $1.25, sux I'll be away all morning workin' on TIMtv, got 500 shares reserved to short if need be this afternoon
Also reserved 3,000 FORC and KYUS for potential shorts
May 15, 2008Yup, by next Monday, everything's gonna be real working-like!
May 15, 2008PDO, up $4+ today, will teach you not to randomly short strong penny stocks, get in, get out then run...cuz sometimes they squeeze stubborn shorts to death!
Stock Watchlist
| XRM | $4.64 | |
| SSBX | $3.26 | |
| APWR | $22.50 | |
| VRML | $2.44 | |
| NTHH.OB | $0.25 | |
| DPDW.OB | $1.04 | |
| CROX | $11.01 | |
| SUNV.OB | $1.47 | |
| AYSI.OB | $2.03 | |
| FORC.OB | $2.34 | |
| CNEX.PK | $4.60 |
TIMtrades
Learn from my successes, learn from my failures, learn from 
50% TIMreads
TIMtags
Loading ...
1InvestorsLive(TIMBUCKS: $40)
April 24th, 2008 at 3:42 pm
wow did VDTI ever just spike
2Carlos
April 24th, 2008 at 3:57 pm
YEP, VDTI JUST SPIKED… GOOD I COULDN’T FIND ANY SHARES TO SHORT DURING THE MORNING!!!! ….. I guess somebody is taking care of me up there….
3ViciousChicken(TIMBUCKS: $105)
April 24th, 2008 at 4:08 pm
Hey Tim- I was on the road and couldn’t check your site the usual 50 to 100 times today. I missed out on PDO as well, which is probably good as I would have been the sucker to get squeezed on the spike. Do you think PDO will still be a good play tomorrow, or has today’s action changed anything?
Also, I noticed on a post in the last blog entry that someone asked about you’re mom cleaning your apartment. Pretty damn funny when she found the handcuffs- that was classic. (Dave and Busters my ass). While we’re talking about WSW- was that you in the Benz that clocks the curb? They always show that on the commercials for the DVD, but you can’t see who’s driving.
4timsykes
April 24th, 2008 at 4:20 pm
it was dave and busters! nah i had a bmw 745li, the mercedes was alex the russian…as for PDO, refer to my post form yesterday about not shorting randomly into strength
5Dan-O
April 24th, 2008 at 4:46 pm
Tim, have you reviewed the chart for CEGE? It might be too gradual for you, but worth a look.
6Dan-O
April 24th, 2008 at 4:52 pm
It’s a run up into earnings, May 1st, so it violates da rules.
7Daniel
April 25th, 2008 at 12:11 am
what do you guys think of pgnx
8John G
April 26th, 2008 at 12:52 pm
‘left $100+ on the table’
Not the way I look at it - your lesson should be never short a low float momo stock. If you were actually smart and followed the momentum, you’d of been busier trying to to find the pullback entry instead of trying to squeeze a few pennies against the trend. If you did the right thing and bought 700 at $6.22, you’d actually be sitting up $1260, by far your largest gain yet….yes, there is plenty of woulda coulda shoulda’s out there, but one of the most important rules, is never short an illiquid stock with momentum in a hot sector.