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“Fire At Will” Market! Spike After Spike …

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Written by Timothy Sykes Reviewed by Jack Kellogg Fact-checked by Ellis Hobbs
Updated 9/18/2024 4 min read
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Welcome traders,

The moves so far this week are insane!

And there will be more opportunities to trade today and Friday. Some of these runners are still in play.

Take a look below, this week …

Datasea Inc. (NASDAQ: DTSS) spiked 50%:

DTSS chart intraday, 1-minute candles Source: StocksToTrade

Galmed Pharmaceuticals Ltd. (NASDAQ: GLMD) spiked 510%*:

GLMD chart intraday, 1-minute candles Source: StocksToTrade

Children’s Place Inc. (NASDAQ: PLCE) is still spiking from last week, a 250%* move in total:

PLCE chart multi-day, 5-minute candles Source: StocksToTrade

And of course, yesterday’s 400%* spike from Portage Biotech Inc. (NASDAQ: PRTG):

PRTG chart intraday, 1-minute candles Source: StocksToTrade

Confused by these moves??

My newest students are using AI to track the hottest stocks …

The patterns that we use to trade are always the same. It was only a matter of time until my AI trading bot caught on.

>> Use AI To Build Smart Positions On These Intense Runners <<

I’ve already traded a lot of the hottest tickers this week. And the catalyst behind these plays is out of control!

But it’s not always obvious for new traders as to why these plays are running. Let me shed some light on the issue:

Short-Squeeze Mania

tim sykes in sedona arizona with laptop of stock chart
© Millionaire Media, LLC

Some of these stocks DO start to spike with a catalyst …

But they DON’T deserve to spike +400% or +500% intraday. It’s insanity.

Here’s what happens:

  • A cheap stock starts to spike, perhaps with some bullish news, perhaps just for arbitrary reasons.
  • Short sellers (a crowded strategy right now) recognize the bullish momentum on a crappy stock, and they build positions to bet it will go lower.
  • Any subsequent bullish momentum could cause short sellers to panic and get out (buy to cover).
  • That can turn into a domino effect of short sellers blowing up, which spikes the stock to insane heights.
  • Short sellers could theoretically keep getting back in, and if they blow up again it spikes the stock even higher.

For example, this week, GLMD announced that it regained compliance with the NASDAQ listing requirements …

  • So it’s a crappy stock that just managed to save its own butt from getting delisted.

After the announcement, it spiked from less than $4, to $23 per share.

These Are Short Squeezes!

It can be difficult because there isn’t an obvious catalyst that says, “Hey look, I’m a short squeeze”.

But we can see the illogical bullish momentum and we can see short sellers on social media buzzing around the stock. Take a look at the post below:

Source

Down $179k … OUCH!

Don’t get sucked into the degenerate short-seller mindset. There’s no telling how high these stocks could spike.

Instead, join me and my students on the long side!

These stocks can follow our bullish patterns because people are predictable during times of high stress. Like when they’ve got a short position on a stock spiking +500%* …

These short sellers are creating the patterns that my students and I trade with.

In 2024, you can use AI to track these movements and build smart positions.

Cheers.

 

*Past performance does not indicate future results

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* 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”