How I Broke My Rules And Lost Short Selling A Fraud, Cannon Exploration Inc (CNEX)

Just about everyone and their mother understands Cannon Exploration Inc (CNEX) is a an outright fraud. Whether you look at PinkSheets.com displaying a skull and cross bones with the tagline “Caveat Emptor” next to its stock quote, its now $470 million marketcap (at $7.25 stock price), the blatant pumping by all the usual suspects and the fact that this company has no business of any kind and has now septupled (7x) in price in 5 days all due to a fluffy PR announcing a new website and a sketchy letter of intent to acquire a seemingly real business, no doubt in exchange for pumped up shares.

Knowing all that, you might understand why I shorted 600 shares yesterday at $6/share half expecting it to go higher—with the goal of averaging my cost basis up too—but never excluding the possibility of a quick $1-2 drop in price.

That’s all well and good, but as a PennyStocker, I have no excuse and my $760 loss (I just covered at $7.20), including commissions, is well deserved. Because while this company is scummier than most, it’s just the latest pump and dump that can—and often do—run further than anyone thinks possible so I still should’ve played by the rules I myself created! Rule #1, don’t short randomly strong penny stocks, you gotta wait for the price action to concur with your thesis. Usually it’s best to short into the market close of the first down day of a big runup, but sometimes that’s too late, so shorting in the afternoon when this kind of a stock goes from positive to negative often opens the door to a big afternoon dump.  

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12 Hot Stocks For Manipulation Monday, Wish It Was Supernova Sunday

PSTI
Everybody and their mother is contacting me about this pump and dump to short…now that I have some capital/trades available to me this week, I might short it, but it is down $2 in 6 days and there’s really only $1 of downside left

XRM
March’s big drop was due to its debtload, now a solid earnings report has brought it back up…not a pump and dump, I’ll avoid it…for now

SSBX
It’s a friggin Bancorp! That just reeks of boredom…barely up, let e know when it go up ore than 50%, or changes its name and gets into cancer research of wind energy

APWR
Speaking of breaking wind, this guy just broke out for a second time in a few months, seems ike forever since THIS post (why I’m anti-investing), although it was about as gradual as my descent into madness, aka not all. I trust this company about as much as I enjoy pissing into a wind blower, but I respect this breakout enough not to short it…yet

VRML
Watch, it’s gonna tank below $2.50 today just to piss me off. Beautiful thing about PennyStocking
is that despite my passengers-watching-an-Arab-on-an-airplane-like patience, the longer you hold these ideal plays, usually the better. I’m fine with my 20% profit though…  

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10 Hot Stocks: Hanging Out With All The Liars, Cheats And Frauds In Penny Stock Purgatory

Seeing all the soulless scumbags around me, I can’t help but feel like this guy…name the movie!

LGDI.OB agri is so hot right now, great fluffy PR this morning, this is a solid pump—probly created by those who got cheap shares as disclosed in THIS toxic SEC filing just a few days ago…chart reminds me of NCEN from a few weeks ago—which dropped 40% off its highs, but patterns evolve (that’s right, you can’t just memorize patterns and then trade—you’ll get your ass handed to you, you actually gotta understand the variables that align to create them so you can ADAPT to change, as detailed in my instructional DVD PennyStocking) (welcome to why this niche is different from all others aka my publishing business model)

SUNV.OB Not enough time in the day to explain everything wrong with this company, its all just exemplified by this blatantly misleading press release, an interview for which they paid, no different from the half dozen mentions HERE for which the pumpers paid  

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Trading The Latest Hot Beverage Stock: Skinny Nutritional (SKNY.OB)

Skinny Nutritional (SKNY.OB) (oxymoronic?) just launched the latest zero calorie water brand, Skinny Water, lured in some third-tier Coca Cola executive to serve on their board, basically entirely for his title (giving him 2mil shares–and many others many millions more–while unsuccessfully / humorously / amateurishly trying to ticker spam that announcement to get included in the Yahoo! news of Coca-Cola bottling (COKE), Pepsi (PEP) and of course Coca Cola (KO) (silly pumpers, for some strange reason, you guys haven’t read my book An American Hedge Fund, if you had, you’d know ticker spam is for kids…back in 1999-2000!), all the while trying to pitch themselves as the next Vitamin Water.

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Chart Of The Day: The Safe Way To Invest In Gold: Permanent Portfolio (PRPFX)

After a big runup and a scary but small drop off its highs, gold is just above January’s highs and right at the all-important 50-day moving average (moving averages are hugely important to big badass trend traders). Commodities should continue to break out, the dollar should remain weak—solid argument for higher prices, but then again, it’s come sooooo far already.

So, the question is how do you play it? Here’s my safe way to play gold: Permanent Portfolio (PRPFX)

Look at that stunning 7-year chart! It’s the top-rated hybrid fund over pretty much every time frame, which I’ve mentioned I’ve been invested in for a while now. Their asset mix—20% gold, 15% global real estate, 10% Swiss Francs, 5% silver and lots of other little stuff—and chart are so beautiful, I’ve allocated 15% of my net worth to it and within a few months, I’m up a solid 4%. Plenty of exposure to gold, just without all the risk of being so concentrated in it.

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6 Small Cap Plays: Natural Gas Stocks Are White Hot

(BEXP) If I wasn’t such a wus at buying breakouts—preferring to short later, this would be the play…4 million shorts getting squeeeeezed

(PSTI) Another day, another multi-billion dollar drug market mentioned by the company, what could go wrong? Respect the pump but don’t believe the hype–we’re talking pre-clinical here, motor oil works at that stage, doesn’t mean it’ll stand up when they actually start testing humans! Risk-reward of shorting this sucker here, well, sucks…pray for a big short squeeze , don’t get squeezed yourself

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How To Predict 10% Daily Price Moves With Relative Ease: PennyStocking!

Some will argue that my top 3 weekend stocks to watch moving 10%+ in the direction I thought they would proves nothing. After all, maybe my blog is simply popular enough to help these patterns become a self-fulfilling prophecy.

But when you throw in a decade of me making millions of dollars off these EXACT kinds of chart patterns, it’s hard not to believe that they are PREDICTABLE! Because they are shining examples of the plays on which my instructional DVD PennyStocking focuses. So just get it so I don’t have to explain/mention as often! That might’ve been rude…whatever, be cheap, sign up to my RSS feed and try to piece everything together.

Enough blabbing, let’s talk shop:

Top Weekend Pick: Short (SYNM)—I’d hope to short into another full day of gains, but the weak open (double top at $1.25ish) coupled with sad volume meant it was gonna tank, either hard or soft, no way of knowing…so when it went negative on the day, taking out big block buys at $1.21 and $1.20 and within seconds it dropped to $1.15, I thought’d I missed it…luckily the optimists bounced it back to $1.20 and I shorted 3,000 shares there around 10am…barely getting all my shares before it fell back to $1.16 x $1.17

Then the real question: could it take out now 2-day support at $1.15…didn’t look good for an hour or so…lots of big buys…but there wasn’t any bouncing higher so I held—not content to make 3-4 cents/share. Right before 11am, $1.15 fell hard, stop losses took out $1.12, then $1.10, then $1.07!!!! Gotta love buying into those automated sell orders, it’s like surfing a wave, covered at $1.07, $370 gain, 11% on my money inside an hour…rest of the day irrelevant, not up enough—nor could I risk my precious day trades—to bet for a fall under $1 although odds are slightly for it. Next!

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Coulda Woulda Shoulda: When Life Makes You Miss Multi-Day Breakouts & Some Other Stocks To Watch

Fess Up Time: Don’t ya hate when you put a stock on your watchlist, tell yourself you’ll trade it if it acts a certain way, but when that special price action occurs, for some reason, you’re not watching it? I’m sure there are those out there who don’t make such bush league mistakes, but I’m not one of them.

Thanks to the popularity of my latest AOL article—about how Amazon has tried blackmailing small publishers like me–I’ve been talking to a couple of reporters—surprise—and much of that talk happens during the trading day, causing me to miss more than a few potential trades. Oh yeah and incessant blogging doesn’t help.

Now, I hate buying breakouts—they move too slowly, happen to stocks that are too expensive or retrace/fakeout too often, so out of all the stocks below I really only regret missing out on NCEN, because that my friends is the f&^$en Mona Lisa of technical breakouts

NCEN–probly going to $3+, easy easy easy easy easy easy easy easy easy 30-50 cents/share, or 10-20%, buy on the intraday break of $2.50, predictable predictable predictable predictable predictable gain. An infinitely better trader than me, Fous, nailed it again. (I’m not only an affiliate, I’m even considering signing up for his stock picking service!) As did some of my DVD students…those who can’t do, teach!

SOLF—nice multi-day breakout, but where to now? Solid resistance in the high $15s

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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  

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