Trading To Fund Mission Trips

Still Short...

2010-06-07T07:33:00.005-04:00

While May was the worst month the stock market had since like 1940, I made out like a bandit. I see absolutely no reason why anyone should be long in this unstable environment. That being said, I plan on selling my shares of DOG when they get up around $75. This, unless something catastrophic happens that warrants my attention and brilliance (kidding), will be my final blog post for 'Trading to Fund Mission Trips'. My life has become as volatile as the markets over the past year (Personal VIX hovering just above 50), and I'm becoming increasingly more involved with various ministry projects (leading a team to Haiti in July and founding a Men's Discipleship Organization). I've enjoyed, and still plan on keeping up with, your posts. It's nice seeing some of you (that I follow) pick up trading and blogging again after a long hiatus. That may become me one day, but for now I'm content with just watching...

It's Me, Your Resident Permabear

2009-10-06T11:10:00.006-04:00

Do I still have a bit of egg on my face because of THIS post? Sure. I'm in great company though, and still believe the stock market will catch up to the real world economy soon enough. Here are some links to articles and quotes from so-called experts, all pretty much singing the same tune: There will be no V-shape recovery. Make sure you scroll to the bottom for 'Signs of Being a Permabear' :-)

“There’s a lot of risk going ahead of some big bumps. There’s a very big risk that markets have been irrationally exuberant.”

-Nobel Prize-winning economist Joseph Stiglitz

George Soros says the U.S. banking system is "basically bankrupt," in sharp contrast to Goldman's upgrade of the large banks.
Nouriel Roubini says "markets have gone up too much, too soon, too fast," and will retreat when economic news refutes the V-shaped consensus, Bloomberg reports.
Joseph Stiglitz told Bloomberg TV investors have become "irrationally exuberant" about prospects for a recovery. "There's a lot of risk...ahead of some big bumps." Current Roubini post HERE!
Christopher Whalen tells Tech Ticker the fourth-quarter will be a "bloodbath" for banking as says stocks rallying while the "real economy is dying" is not a healthy sign.
Meredith Whitney warned about the likelihood of a second credit crunch, especially for small businesses, a WSJ op-ed last week.

10 Signs We May Be Headed For An October Crash

Click on Signs to Read More

Sign #1: The consumer is down and out

Sign #2: W-shaped recession

Sign #3: The banks will lead us down again

Sign #4: No positive catalysts on horizon

Sign #5: Earnings will disappoint

Sign #6: The market is overbought

Sign #7: An indiscriminate rally

Sign #8: Light volume

Sign #9: Short covering and money managers looking to bank profits

Sign #10: An eerie similarity

Seeking Alpha Article on Another Possibly Imminent Collapse

You Know You are a Permabear When…

Each time the market rallies, you declare it an “unhealthy sign of speculative excess”
The great majority of chart patterns always appear to be either rallies in a bear market or an imminent major top.
CNBC asks you to appear as balance to the optimistic Bull guests.
Good economic results are bad for the market – it will cause the Fed to keep raising rates; bad economic results are bad for the market -- its proof of the coming recession;
Sideways moves are actually just “setting up the market for the next down leg”
You still rail against Nixon for taking the US off the gold standard;
Your colleagues think you should become a fixed income portfolio manager.
All the anecdotal evidence you see reveals excessive bullishness;
You have trouble sleeping when you take a long trade.
1. On days when gold prices drop, it's due to a government conspiracy;
2. When gold prices rise, it's because central banks have finally lost control of manipulating the gold market. Either that, or the masses have finally figured out their fiat currency is just paper.
3. If gold drops again the next day, see #1.
When companies make quarterly earnings estimates, its bad because a) its already built it, and b) its evidence of earnings management. Missing earnings, on the other hand, is bad, because, well, its bad.
You criticize any analyst that upgrades a stock from “Strong Sell” to“Sell”
The Yield Curve Inversion is a sure sign of the coming recession; As the inversion flattens, however, you note out how negative higher 10 Year Yields are for stocks;
Positive market commentary is evidence of “complacency” and proof that the market must go lower;
Any 10% rise in an stock is a “great shorting opportunity;”
You blame market rallies on ignorant bulls “who just don’t understand;”
You short anything that is in your parents' retirement portfolio – and are determined to outperform.
Special Thanks to Yahoo Finance, bloggingstocks.com, and bigpicture.typepad.com for content.

Trading Like 007

2009-10-02T17:44:00.000-04:00

If you remember THIS post, you know I'm intrigued by the spy genre (borderline 'obsessed' around the time a new Bond film releases). While watching the newest 007 installment, Quantum of Solace (for the second night in a row...really, what's wrong with me?), I couldn't help thinking about how his life relates to stock trading. In almost every adrenaline-filled, pulse-accelerating situation, his training seems to summon 3 distinct reactions: He looks before he leaps, takes calculated risks, and always protects his assets.

Look Before You Leap

There are countless scenes, especially with the new, physical Daniel Craig, where Bond has to make a split decision. The consequence of that decision could prove fatal, had he not been

trained by MI6 (British Secret Service) to react quickly and decisively in life threatening situations. Any Bond/Bourne fan can recall countless times where a jump from a window, dive into/onto a moving vehicle, etc., was made only a spilt second after the protagonist saw his opportunity. Keep in mind, it's part training, part instinct (Not everyone can be trained to be an effective assassin).

There is a direct correlation to trading stocks. In the heat of the moment, it's all too easy to jump on board a skyrocketing ticker or hit the buy button in order to catch a falling knife without really knowing what you're getting yourself/money into. This is happening all too often, now that some trading platforms allow traders to (almost blindly) follow the trades of others. There are known traders such as Timothy Sykes, Investors Underground, and now Reaper, who have many followers/leapers/minions doing just that- following their trades without looking. While they may be lucky enough to begin that bonehead practice with some gains, it just doesn't work long term. They must know what they're looking at/for in order for their leaps not to completely ruin them.

Take Calculated Risks

Bond learned a hard lesson in Casino Royale when he was wiped out during a game of Texas Hold 'Em-style poker. LeChefre, the film's main antagonist, had fooled 007 by faking a tell (Manuerism that let's your opponent know whether or not your bluffing). Bond in turn goes all in, and subsequently loses his entire bankroll (To be accurate- the UK's bankroll).

Being able to properly manage your trading account's risk, or % of your total assets you trade with in a given order, is a make-or-break ability- which can and most certainly should be learned. I can't tell you how many times I've heard (and let's be honest, I'm guilty of this myself) someone say this type of sentence, "That one trade wiped out my entire week's/month's gains". Knowing how much you're willing to lose before ever leaping into a trade is a calculation every trader must know for himself/herself. Furthermore, one must be willing and able to execute an exit order if that threshold/risk level is reached.

Protect Your Assets

No matter what situation Bond finds himself in, he always manages to protect his most sacred assets: loyalty to her majesty, and himself. At times, he's forced to leave women, friends, Astin Martins, etc. behind so he can live to fight another day. Also, he seldom allows

himself to lose sight of his exit strategy simply because he's in the heat of battle.

With stocks, it's important to stick to your trading plan unless outside forces put your assets at risk. As you've probably noticed by now, the 3 qualities of a good secret agent and stock trader are virtually interchangeable. By looking before you leap, you're calculating your risk and protecting your assets. By protecting your assets, you are assuring your ability to take the next leap, and so on and so forth. Learn from the qualities that have kept James Bond from succumbing to the 90% mortality rate of other 00's.

Never wanting to be among the 90% of traders that lose money,

Evan (aka Island Minister)

Don't Fear the Reaper

2009-09-04T13:32:00.010-04:00

As most of you know, I've been following Timothy Syke's trading style for almost two years. I first saw him on Wall Street Warriors (Mojo HD network show about various traders/investors) a few years back, and enjoyed his brutal honesty and knack for profiting from penny stocks. Here's a pic of me reading his first book, An American hedge Fund, while on a mission trip to the Amazon region of Brazil last summer. His trading abilities are only trumped by his business saavy (as he's currently growing an empire built on stock alerts, DVD and book sales, and even a publishing company called Bullship Press, LLC). Needless to say, his ship has sailed and, to most penny stock pros, needs no introduction. As for the title of this post, I introduce you to Michael Goode (aka Reaper), a padawan/apprentice of Master Sykes. I began shadowing Reaper on various trading sites such as Tim's and Investor's Underground. He always posted intelligent questions and comments, and his increasing profits could not be ignored (he's even been featured in some of Tim's posts like THIS ONE).

I'm pleased to say that Reaper himself has built a very nice looking website (Pallian would be proud ;-), and posts a well researched watchlist and ongoing video teaching series. Lucky for us, it's FREE (well, for now at least). below is a video from just a few days ago where he not only confidently explains the technicals of VG (Vonage), but also correctly predicts the following day's price action. He was dead on, and I'm excited to continue my own apprenticeship under this up and coming Master Trader. Enjoy the embedded video (very informative once you get passed his music preferences), or click HERE to check out his site (and don't forget to buy him a cup of coffee using the link on the right-hand sidebar of his homepage).

Successfully merging Blue Oyster Cult and Star Wars references,

Evan (aka Island Minister)

Web 2.0

2009-08-29T18:42:00.006-04:00

"Web 2.0" refers to web development and web design that facilitates interactive information sharing, interoperability, user-centered design^[1] and collaboration on the World Wide Web. Examples of Web 2.0 include web-based communities, hosted services, web applications, social-networking sites, video-sharing sites, wikis, blogs, mashups and folksonomies. A Web 2.0 site allows its users to interact with other users or to change website content, in contrast to non-interactive websites where users are limited to the passive viewing of information that is provided to them. Thank you Wikipedia :-) For the full definition, click HERE. (I've left the links in just in case you wanted to look up the things Wikipedia assumes you might want to look up)

So why am I even taking time to post about Web 2.0? If you're into stocks, finance, missions, cooking, whatever- technology WILL NOT WAIT FOR YOU! I've found out the hard way sometimes, since I'm usually a laggard when it comes to hopping on the bandwagon (ie. Facebook, Twitter, etc.) Whether you're trying to figure out how to access Think or Swim from your iPhone, or wondering how to embed an RSS feed into your website- you need to keep up! This brings me to my next point (and thanks to Charlie G., who unfortunately for us has taken some time off from blogging, I know I'm not alone in my thought process):

Stop being lazy! This not only goes for your trading, but EVERY aspect in your life: physical fitness, diet, relationships, education, etc. I've lost my night job recently at a Christian Bookstore because of a little thing called bankruptcy, and have found myself with more time than I know what to do with! Since I began seriously trading and investing for mission trips almost two years ago, I've wanted to have more time to devote to these two passions. Well, my mom always says, "Be careful what you wish for". Now it's game on! I have the time, so let's see what I'm made of. I built some exercise equipment yesterday (one big piece with dip bars and a pull-up bar), and have been working on my ministry website (it's actually a small business that uses t-shirt sales in order to fund youth mission trips- I've just been neglecting it for years).

I guess what I'm trying to say (if anyone is still reading at this point :-), is that there's no better time than the present to pursue your goals- but it takes work, patience, and perseverance (no, I did not get that from a fortune cookie). Web 2.0 pretty much personifies what I'm talking about. There are people building empires using the new social networking sites and tools anyone reading this blog has access to. I'm serious, now matter what your passion is, it can be enriched by the computer you're using right now! I'm well aware that most of my readers are traders and investors in the stock market- use the new tools available on the web to quicken your learning curve. The other day, JEDM was in play and went supernova- small fortunes were made. You know how I heard of it? A tweet from Timothy Sykes I saw come across my Facebook home page.

Now, I'm not saying everyone should be a web 2.0 junkie and have a blog, tweet all day long, update their Facebook status hourly, and/or get rich from building numerous websites full of ppc (pay-per-click) ads. I just know it's enriched my life. Feel free to share any new ideas or apps you find helpful from the wonderful, widget-filled world of Web 2.0!

Waaay too much time on my hands,

Evan (aka. Island Minister)

What I Believe...

2009-08-12T10:09:00.004-04:00

Don't worry- I'm not about to go into a long dissertation on why I am a Christian (even though I'd be happy to if anyone was interested). This post is about my belief that the market will correct and retest the March lows. The reasoning could stem from something as simple as everyone saying 'the worst is over' and calling march the absolute bottom for decades to come, to following the Elliot Wave theory and strictly using technicals. Since I'm not a saavy enough analyst yet to map out the Wave's peaks and troughs or chart how the dollar is bottoming, I'll just let you watch one of countless videos bouncing around in my head that seem to make sense. When everyone around you is bullish (especially non-traders), it's time to protect your profits!

Long DOG, EVFL & SUNV (these two are purely speculative),Up to my neck in wedding plans,
Evan (aka Island Minister)

Back from the Motherland and Still Bearish!

2009-08-06T15:30:00.005-04:00

I'm back from the mission field, newly engaged, and still waiting for the market to correct itself. My last post taught me a valuable lesson- NEVER CALL A TOP! For a while, though, I looked like a genius- the DOW retraced to 8200 before the current rally ensued. I'm not calling the top, but definitely agree with THIS article. I understand debt (my knowledge on the subject has increased exponentially along with most other Americans the last couple of years), so I know there has to be some sort of reckoning for the carelessness of both the private and public sectors over the past few decades. Again, THIS Seeking Alpha article is pretty good at nailing the details.

Thanks for the prayers and e-mails many of you sent me last month while I was away. Here's a pic of my fiancee and I, at what we hope will the location of our wedding. As for the mission trip- it was FANTASTIC! You're welcome to view all the pics HERE, as well as THESE pics from Paris (where I proposed at the Eiffel Tower). I've been working on the Island Ministries website since I got back (that's the company I started to help fund youth missions), and plan on putting a team together to go down the Amazon next summer. Interested? You can see pics from last year's Amazon trip HERE. I've also added a cool 'Tip Jar' type of application to my main trading SITE. For $5, anyone can advertise their wares. Timothy Sykes I 'aint (He's made about 50k trading in just under 2 years, and hundreds of thousands from Ad revenue and selling his products), but every little bit helps:-) As for the following video, all I can say is this- you have to be able to break loose sometimes. I thought about titling this post 'Michael Jackson's Alive and Well in Zimbabwe', but I thought that might be in bad taste. Enjoy!

Zimbabwe Moonwalk from Evan Dawson on Vimeo
Learning new tricks every day,

Evan (aka Island Minister)

I'm Calling It!

2009-06-12T19:05:00.003-04:00

The top that is- and yes, I mean the Bear Market Rally! We may have a few more up days, but I am putting my credibility on the line and saying that the Dow will not hit 9000 before it hits 7000 (yes, I know it closed at 8800 today). Many have been blaring "BS" at the rally's persistance, and I have taken it upon myself to research every aspect of the climb (from the historical likelihood of a V-shaped recovery to the infusion of TARP money in which the banks have used to bid the market higher). There's definitely no sound reason to list 'what-if' scenarios that may aid in the turning of the tide, but since it's my blog, here goes nothing:

1. Failing of another Major U.S. financial institution. Keep in mind that the number of failed U.S. banks in 2008 was 25, compared to 37 already in 2009.

*Courtesy http://www.fdic.gov/bank/individual/failed/banklist.html

2. Trigger Happy Nuke Holders (ie. N. Korea, Iran, China, Russia- really, take your pick of a nuclear power that may have qualms with us).

3. Natural Disaster for which we don't have money for (another Katrina, California quaking into the sea, etc.)

4. Reality setting in and the FED not only realizing we're broke, but admiting it.

* this probably shouldn't have it's own number, but I've been thinking- if unemployment is at multi-decade highs, why does the market rally when the 'expected' number isn't met? When 600k+ more people are unemployed each month, that's 600k+ more that won't be added to that number. Eventually, we won't have any new unemployed because everyone will already be...well, you know. These are the thoughts I'm plagued with while working two full-time jobs (and yes, I feel very blessed to have work).

Disclaimer- I am long FAZ, DOG, and short DDRX. The first two are in preparation for the collapse, and DDRX just needs to fade (like MAXY- it may take 3 months, but I believe DDRX is more than overbought at this point).

Closing thought- I would love for our country to return to it's faith-based, non-borrowing, non-negotiating-with-terrorist roots, but it is what it is. I don't know what-all's going on in D.C., on Wall Street or at the Goldman Sachs closed door meetings, but I can tell you this: This world is not my ultimate home or final resting place. I am a Christian. I was promised by my Savior that this life wasn't going to be easy (sorry if you've been misled by 'prosperity televangelists'), but that I wouldn't have to go through it alone. Sorry for the sudden 'spiritual' overtone, but this blog is called Mission Trading for a reason. I leave for East Africa on June 27th in order to train pastors in Mozambique, Zimbabwe and Malawi (where Madonna is trying to adopt). I'm still not sure if my trading will fund missions, but it's all in His hands.

In Him,

Evan

Who's With Me?

2009-05-26T19:33:00.005-04:00

Do you ever feel like you know exactly what's going to happen in a given stock, wait for price action to confirm, then do absolutely nothing?! If that doesn't consistently happen to you- you shouldn't be reading this blog (or any blogs for that matter- go kiss your supermodel wife and buy another ferrari ;). The fact is, this happens to all traders (usually after the shellshock of a losing streak- which reminds me of my last post and brings me to my next point): You're a good trader. That's right- YOU, the person reading this blog. I have a fairly accurate headcount of most of you here- and you're all traders (some very experienced). Knowing my audience, I can guarantee 3 things:

1. You know how to read a chart (maybe not expound on Fibonacci retracements, but...)
2. You have 1 or more actual trade accounts online
3. You would trade for a living if you could master your faults (psychological, emotional, etc.)

So what is the one character trait that I believe is keeping the whole lot of us from consistently profiting (and sometimes hitting the motherload on the stocks we call well before price action confirms)? DISCIPLINE. Period. The most successful trading streaks I have are the ones in which I have applied discipline. Like Pavlov's dog, the profits tell me to keep doing what I'm doing in order to experience the same reward. I am extremely confident I can take 10k and turn it into 15k in a matter of weeks- but after about 5k in profits (and it may be a much different amount for you depending on your income level) I break. Do I stop enjoying profits? No, but maybe I get bored from lack of a challenge (I know it sounds ridiculous to get bored of winning). I don't know how to overcome this cycle, but any advise would help. I don't want to be a good trader- I want to be a consistent one. That's the only knid of trader that leaves his day job (or two as the case may be)- one that has figured out how to consistently discipline himself, because he already knows how to trade!

I'm getting closer every opening bell,

Evan

ps- the stocks I knew to play today were OGXI (short when it faded if there were shares), and JVA (after the DDRX run-up, this one was next- and could keep going for days)

pps- Do any of you ever actually click on links in blogs (like if I made the words 'last post' take you to my last post)? The reason I ask is that I could write these things a bit more frequently with my schedule if I didn't think all the extra html work was worth it- you'll notice I don't have any charts or links in this one. Thanks for the input!

Dust Yourself Off

2009-04-28T19:27:00.012-04:00

If you've been following this blog at all the last few months, you've watched me a:) Successfully profit from shorting 7 stocks in a row (when I stuck to my strategy), b:) Launch a website that focuses on my two passions: missionary work and the stock market, and c:) Completely disregard my strategy and hold on to two stocks that eventually led to a margin call, forcing me to watch my Covestor chart and $ dwindle to a negative % for the year. So what now? Being the movie buff that I am, I will explain how I plan to come back from this trading funk by rehashing a lesson from Top Gun. After Maverick, a fighter pilot for the Navy, loses his best friend in a training exercise, he finds it very difficult to fly again. He second guesses himself, is fearful, and quite frankly wants to quit. His commanding officer instructs Maverick's 'handlers' to "Get him back in the air- the sooner the better". This is the turning point of the movie, as Maverick comes back with a vengeance and achieves the success he was destined for.

There have been time constrictions lately (ie. still have two full-time jobs, planning the confirmed mission trip to East Africa, and opening another trading account), but I absolutely plan on keeping this blog alive. To bring you up to speed, in the past two weeks I've a:) Opened another Think or Swim account in which I plan to use for mission trip income (was already able to withdraw funds from successful FAZ and DDRX trades, as well as my first profitable LULU trade using put options), b:) was given a minor promotion at Target (moved from stocking to human resources- this is my morning job), and c:) Had a wonderful Mother's Day/Birthday with my entire immediate family, my brother-in-law, brother's girlfriend, and my sweetheart of five months, Michelle. Below is a great depiction of what truly matters in life:

From Left to Right: Brother and girlfriend, brother-in-law and sister, me, Michelle, Mom, Dad

Living in Exciting Times,

Evan

Three Things

2009-04-23T19:07:00.009-04:00

1. Timothy Sykes Isn't Human.

There are traders, there are robots, and there are trading robots. Then there is Mr. Sykes. Somehow, he not only knows how to profit more than 90% of the traders out there, but he possesses a machine-like quality that seldom lets his emotions interfere with his trading plan. Perhaps this is due to the well-known lesson he learned after losing more money than some people make in a lifetime on one penny stock (It's all in his original book). He has turned a pretty surreal corner, and is now living the daytrader dream. Some people scoff at others' successes. I applaud. Now if I can only trade the perfect setups I've learned to spot from this cyborg mentor (while keeping my emotions and theories in check), I will no doubt reach that upper echelon of elite traders. I'm still coming for you Tim!

2. I've Had a Livermore Experience.

After recently watching Think or Swim liquidate some of my positions against my will (due to lack of funds and the use of margin, I had 200 shares of both LULU and PALM covered for me the last two days), I have once again regained the hope of victory. What is victory when it pertains to trading? Planning your trade and trading your plan. It's that simple. If you're wrong, fine- but don't keep having to learn the same lessons over and over because you somehow fail to allow yourself to change your trading habits. If you build a fortune, then squander it like Jesse Livermore only to build it again- Stop there! Evaluate what got you back on that plateau, and KEEP DOING THAT! In case you're interested, THIS is one of the best short biographies on the life of Jesse Livermore I have ever read.

3. I Am Planning My Next Mission Trip!

Yep- I've saved the best for last! I am finally going back to East Africa (Zimbabwe, Rwanda, Mozambique, and possibly Tanzania) this summer. I won't be alone either- my girlfriend Michelle and I will be flying over to meet a pastor friend of ours (Agatha Taylor- special lady who loves the Lord) and help train local pastors in kids ministry (Michelle's and my favorite), education, and help with various medical needs (malaria prevention, AIDS awareness, etc.). Michelle is a pharmacist, and returned recently from a mission trip to India. She truly is a woman after my own heart. Please keep the trip in your prayers and I'll try to post updates (although not too much since this site is primarily about the trading- Mission-trading.com will eventually have more about the missions).

Striving to stay focused in this break-neck-speed life,

Evan

Margin Call Averted...For Now

2009-04-20T18:34:00.009-04:00

It just doesn't get much closer than that! I had a scheduled margin call today with Think or Swim @3pm. I was told I could either A:) add funds to bring the account to positive, B:) liquidate positions to bring the account to positive, or C:) Take market action (trade) to bring my account to positive. By holding all my positions, I essentially chose option C. If today hadn't have been the tank it turned out to be, I my friends would have been SOL (and no, that's not a ticker symbol). Behold LULU, the main reason for the margin call (and what kept me from being liquidated today):

I'll see this trade through, but what a waste of time- not to mention missed opportunities like DFR (a stock that actually meets my strategy's criteria). Do I think LULU is headed back down? Yes. Do I think my initial resistance 'guess' could end up being support (thus making it difficult to cover for a profit)? Yes. Have I learned my lesson? Which one? Um...Yes. YES!! UNCLE!

Praying for discipline,

Evan

ps- PALM was up today (lovely- can the PRE phone just come out already so people can 'sell the news'). FAZ is rocking again, now that people are realizing the banks and financial sector may still be in trouble (big surprise).

"Stress Tests are Fudge Tests", and I've Got a Margin Call

2009-04-16T19:49:00.002-04:00

Here's the titular article- it's by Dr. Doom himself, and definitely worth a read before tomorrow's open! So I was early in my initial shortings of PALM and LULU. Wait, "strike that...reverse it" (Willy Wonka). I was not only early, but currently look like an absolute moron for not cutting my losses. My 'Bear Market Rally' convictions still hold (and growing ever stronger as this V-shape recovery pushes higher). There are few, at this point (especially in the media- big surprise), that share my sentiments. Tomorrow is key. Financials under the spotlight. The account I'm trading is at Defcon-1. My kung-fu grip is in it's last, white-knuckle effort.

Inadvertently becoming Livermore,

Evan

Here, Let Me Help You With the Long Weekend

2009-04-11T19:18:00.005-04:00

So, if I had gone long the two stocks I shorted on Wednesday (LULU and PALM)- I'd be sittin' pretty. On the other hand, it would make it look like swing trading is easy (on nerves, trading accounts, etc.), and totally nullify the title of my last post. Instead of harping on the fact that, because of my current swing positions, I've fallen out of the top 100 Covestor rankings- I've decided to post a few items that have definitely taken my mind off of such things:

1. I signed up on Scribd in order to enter a contest, and found this gem: Why I Fired My Secretary Today

2. No need to explain this one- just watch and repeat (and you're sure to forward it to your loved ones;) Huge Dead Snake

Here's one you don't have to click on a link for:

A woman got on a bus holding a baby. The bus driver said, "That's the ugliest baby I've ever seen!"

In a huff, the woman slammed her fare into the fare box and took an aisle seat near the rear of the bus. The man seated next to her sensed that she was agitated and asked her what was wrong. "The bus driver insulted me," she fumed.

The man sympathized with her and said, "Why, he's a public servant and shouldn't say things to insult passengers."

"You're right," she said. "I think I'll go back up there and give him a piece of my mind."

"That's a good idea," the man said. "Here, let me hold your monkey."

Happy Easter!!! He Is Risen (well, technically not til tomorrow- even more technically, it happened about 2000 years ago),

Evan

Swingin' Aint Easy!

2009-04-07T19:20:00.009-04:00

Well, in case you're wondering, I'm still short PALM and LULU (which at this second is a profitable position- just don't blink). LULU was a great short after it's first down day (yesterday). Too bad I didn't have the patience to wait for the price action- nooo, I had to try and 'pick the top' (last Wednesday) and enjoy watching one of my largest share positions of 2009 just keep going, and going...(away from me). Technically speaking, there were many reasons why I shorted LULU (and am still short). RSI was above 70, more than 100% run in one month, etc. If I had just waited to short until today, I would have had a nice in-and-out trade. More importantly, I would have my funds freed up for other positions- like my new found best friend CZZ (thanks Tim). Behold the unsuspecting beauty:

CZZ is currently higher than this 3 month chart (around 4.70). The goal tomorrow morning is to cover my LULU short (gonna be tough to not hold longer- but I should be forced to only take a small profit because of how lame my entry was), then use the released funds to short CZZ, IF:

1. I can reserve shares (will try 400 and only short 200 at first)

2. It gaps up and surges over $5 before 10am

That's it. Any variations of the above plan and I go back to bed (it is my one morning off all week- btw, why am I still up- it's 1am!)

Watching the Futures Tank,

Evan

ps- It has been brought to my attention that I use trading terms sometimes without explaining them. If you have any questions whatsoever, feel free to e-mail me or post a comment (just know that I don't claim to be a professional- but will help steer you in the right direction if I can).

Mission Accomplished: MAXY

2009-04-03T18:46:00.009-04:00

Yes, you read that right! I've finally decided to cover the last 100 shares of Maxy that I've held short for months. This is bitter sweet, since I was pretty much forced to cover due to a (please don't kill me) margin call (I'm wilting as I type while I await your berating). Yep, folks- I zigged when I should have zagged. My two shorts (LULU and PALM) have laughed at me since Wednesday (which happened to be my one morning off this week- what do you think, was I thrill trading?) My reasons for shorting these two still hold- though my timing (early as usual) was clearly off. As for my dear old friend MAXY, here's the chart that details my second biggest gainer since using my strategy (that I desperately need to stick to):

After all was said and done, my total profit from MAXY was $398.07 ($55 in commissions for all those 100 share trades). I started to show all my entries and exits on the chart above, but there's no way (it would drive me insane- there were 11 different trades). If you're interested, just type MAXY in the search bar at the upper left of this blog. Scroll aaaallll the way down to start at the beginning.

As for LULU, I was early, but the lack of pretty much any news (combined with the fading volume and nice, bearish candle that just showed up) calms my trader mind. The chart below is courtesy of Stocktwits:

Reaching for a huge gap-down Monday,

Evan (aka islandminister)

I Love M&M's with Downtrending Heads

2009-04-01T13:28:00.014-04:00

There were many great morning spikes to take advantage of today, provided you a: waited for the spike to top off and b: were patient enough to ride out the downtrend and/or 'M' shape (also known as a 'Double Top'). M&M's are not only one of the best inventions when it comes to candy (btw- have you tried the incredible new Premiums line?), but a nice technical indicator on a stock chart. One of my trades today, though currently going against me while holding, relieved my stress by revealing the 'M' pattern on more than one occassion. The tell tale chart below is of LULU, a stock I was initially notified about on Stack Your Cream's site (not sure the meaning of that site's title, but it definitely gets a laugh when you say it randomly/sternly to someone:) When viewing this chart, it's important to remember that the timeframe was intraday (and pretty much only good for scalping- which is great if you're not subject to the PDT Rule). You'll see in this post about PALM, though, that the pattern works on multiple timeframes. Anyway, here's the chart:

For info on 'Ms', check this site out. Peace,

Evan

How Do You Eat An Elephant?

2009-03-30T19:30:00.015-04:00

One Bite at a Time! I know it can be extremely hard sometimes to stay content with small gains, especially when the market is as volatile as it's been the past few months. The tendency to feel like you're a: leaving profits on the table with every trade or b: not being aggressive enough with your account size and/or # of shares, can and will lead to bad trades if you let those 'hindsight' emotions get a hold of you.

If you've been following my blog, you know from my last post that I was extremely bearish after last Monday's 500 pt. Dow run. There are many technical reasons for that (ie. Elliot Wave Theory, market in overbought territory, etc.). There are also plenty of blogs that go into much greater detail in regard to these types of technical analyses and/or fundamentals (ie. Government involvement like the Obama/GM situation, possible war with N. Korea, etc.) I just want to share my thoughts and trade executions as transparently as possible (in true Timmay form). I'll leave the 'professional trader speak' to those more capable.

Having said that, my latest bit of elephant was TCK- a stock that pretty much fit my strategy perfectly (except for the market cap). Props to Investors Live for find. You'll notice (in the chart above) that when TCK reached $6, the RSI (top of chart) read 'overbought', not to mention it had come from the $2 range- where I like these runs to have originated. Below is the chart that helps illustrate my entry/exit:

Did I leave a ton of profits on the table with this trade? Yes. Did I read the technicals right and trade my plan? Yes. I guess tie goes to the runner (with a little extra money for his pants).

On a side note, as you'll see tomorrow on Covestor, my account (at least at this moment) closed at an all-time high since it began being tracked in early '09. If I'm correct, I should be in the rankings somewhere starting tomorrow (my 2 month Covestor anniversary). I believe the 'Pride comes before a fall' Scripture would be appropriate to reflect on at this juncture (No worries Eric and Charlie).

Remembering that the market will humble you at will,

Evan

ps- Yes, I'm still short Maxy and Palm. I'm still long Faz.

pps- I shaved some profits from my last buy of FAZ @ $18ish, and some from my PALM short @ $8.72ish (all this can be found either on my Covestor or twitter pages).

End of Rally?

2009-03-24T19:21:00.008-04:00

I don't know. You don't know. I wish I knew. All I can say is- I've prepared for a correction/retracement/dive, etc. Yesterday, at market close (which was perfect timing but only because I had no choice), I sold all of the mutual funds in my 401k and transferred the money into a safer, bond fund. I plan to buy back the exact mix of funds if the DOW dips below 6,500 in the next month. If that doesn't happen- I'm wrong, but 'missed money is still better than lost money'. Also, if we don't correct soon, you can throw RSI's usefullness out the window (cuz we've just entered 'overbought' territory):

As for the Think or Swim account tied to my Covestor ID, I'm also preparing for the end of (imo) the bear market rally. I averaged up my PALM short today, adding 100 shares at 8.81. I'm also long 25 shares of my friend FAZ (avg. about 25.75ish). Forgive me for not updating the avg. prices on the right hand side lately. Knowing that Covestor verifies every trade has made me a bit lazy- I'll try to do better.

In case you're worried that I've stopped posting/trading/reading the Yahoo! Finance boards, etc.- Have no fear! I've been keeping up with all of that and then some. I've decided to build a webpage that focuses on why I trade. Yeah, the 'Mission Trip' part. Mission-trading.com is my new project (like I need one- and be kind, it's not completely finished). The blog you're reading is pretty much 99% about the 'trading' part (and will continue to be so), but fails to expound on the reason I trade. I'm not saying mission-trading.com will be 99% about missions, but it will certainly bring to light the connection between the two passions that drive me.

Hoping the country and my shorts somehow thrive,

Evan

Don't Know What to Call This

2009-03-19T19:18:00.006-04:00

I thought about titling this post 'Never Do This!', but then didn't agree- since I did it and it worked (I've made it work in the past, but have also gotten burnt by it). What am I talking about, you ask? Averaging down. Basically, I'm referring to adding to a position that either A. You're uncomfortable with, or B. Isn't acting how you originally thought it would. You can either average down in equal quantities (ie. short 10 shares at $45, another 10 at $35, etc.), or try to really bring your average share price down by adding even more to a losing position (ie. short 10 shares at $45, 20 at $35, etc.) The latter illustration can get you in trouble faster than you can say, "Margin Call".

To better illustrate my point, I'll use a real life situation you may be aware of: My recent position(s) in FAZ. After it fell from it's grace around $115, and raced toward support around $40, I felt the urge to buy 15 shares (when it was $45). No biggie- "It'll be 60 in a day or so". Well it broke support of $40, so I decided to average down and buy 10 more shares at $35. "Surely it's going back up to $40 where I can almost break even". Nope- yesterday it just kept on tanking, kicking my sorry 25 shares all the way to $26. I watched the futures like a hawk last night and again when I woke up at 5am this morning for work- they showed the DOW being down about 40 pts. I was a bit relieved, knowing that FAZ should begin the day up (being the short-minded etf it is). Well, when I texted my Mom around 9:30 am, she told me it was 24.48. I wanted in! Again. I decided to buy 50 shares under $25. My order was filled at $24.28.

I don't condone this sort of trading (averaging down) for three reasons:

It ties up your capital, making it difficult to trade when a better setup presents itself.
You're bucking the trend, hoping your contrarian idea is perfectly timed.
These trades can potentially wipe out gains made in many smaller profitable ones.

With that being said, here's three reasons why I decided to average down with FAZ:

The rally we've had in financials can't go up forever.
Tomorrow is options expiration day (many will be taking profits).
FAZ is extremely volatile, and $29 wouldn't be that difficult when combining #1 and #2.

I picked $29 because it would make all my recent trades with FAZ profitable (even with commissions). When it couldn't quite hit $29 a couple times, I decided (with some sound advice from my brother-in-law) to lower the target to $28.75. Got it before noon. I'd post a chart, but you obviously don't need one if you've read this far.

In other news, I covered 100 shares of my PALM short AH when it fell to $7.30 after a dismal earnings report. I'm hoping to cover the remaining 150 shares in the very near future. That will put the account pretty much in cash- right where I want to be for the next perfect setup. Let me say it again so I can remember... Perfect setup.

Evan

Missed Money Is...

2009-03-18T10:51:00.007-04:00

I know 99% of my readers know the ending of this saying ("Better than lost money"), but given my trades on JAVA today- I'm still apt to kick myself over missed money. JAVA is a stock I know all too well (unfortunately- having been a longtime bagholder last year before developing my strategy). When the rumor mill started working over time, saying that IBM wanted to buy Sun Microsystems (JAVA), the stock popped after hours like a misguided missle. This first chart is compliments of Stocktwits.com (If you haven't joined- it's a great Twitter-like tool used for stocks):

I can't tell you how I knew JAVA was going to see $7.85 today (that wouldn't help anyone learn a thing). I'll just say when I was scanning with Think or Swim for big % gainers, and JAVA showed up, I was immediately short-minded. I also knew, since this trade wasn't a perfect fit for my strategy, that I would have to let the price action/technicals decide JAVA'a fate for me. Since I'm home to watch the markets today, I decided to short and watch. Below is the chart showing my intitial entry, fearful cover, second entry (wanted blood!), and final cover for an overall profit (which you'll see could have been much higher):

BTW- as I'm typing this, JAVA is back at $8. You gotta be quick in this market, able to take small profits, and move on when a daytrade doesn't work out how you thought.

7pm Update- JAVA surged above $9

Any of you pirates have some cool trades?

Evan

How I Sleep at Night

2009-03-17T20:37:00.004-04:00

I received a pretty cool comment the other day from Yngvai, a trader I've been following for a while now- from his posts on Tim's site to his own blog. It was short and sweet: "Dude, you're the king of holding long term shorts!" I'm well aware that, over the past couple of years, it has been easy making money going short. Now (in the midst of this rare rally) the hoopleheads (a not-so-nice term coined by the character Al Swearengen in the HBO series Deadwood) on Yahoo Finance like to point out with great vigor, that we have seen the bottom and are on our way back up. Maybe. If so, holding shorts 'wouldn't be prudent' (Dana Carvey doing a G.W. Bush impersonation). I sleep well at night tuning out all the noise and using what little technical saavy I possess. Below is a longterm trading range of the Dow, and why I think (along with many other technical traders) we are currently experiencing a bear market rally- and possibly about to head back down to 5000.

For my 401k and IRA's sake, I hope I'm wrong and this rally never ends. With this account, though, I'm perfectly content staying short PALM and MAXY (and long FAZ- a short-minded etf).

Thank you and goodnight!

Evan

F.S.T. (FAZ Support Test)

2009-03-12T19:29:00.006-04:00

Yeah- I want to be like Muddy, who traded FAZ profitably like 53 out of 54 trades last week. I've had 3 successful trades with FAZ so far, and am now looking for my fourth. Below is the 'have-to-see-it-to-believe-it' 3 month chart of FAZ:

I realize this may be catching a falling knife (I am certainly trying to here- bought 15 shares @ 45.75). This is a pretty relentless freefall from 100+. Here are 4 reasons (2 valid, 2 ridiculous) why I think FAZ will see 50+ in the next week (and possibly tomorrow).

1. This market's volatility

2. Support level in place around $40ish

3. Fridays make for great profit taking days- especially after a week like this one!

4. Second Friday the 13th month in a row? C'mon, that's gotta bring some selling to the table:)

Is there a method to your madness?

Evan

Took More from FAZ's Fat Fingers

2009-03-11T15:00:00.009-04:00

It's been an abnormally long time since my last post. Sorry. I took a mini vacation and visited my brother in Ft. Lauderdale for his birthday. It had been a year and a half since my last full weekend off (excluding the mission trip to the Amazon this past summer). If you've been watching my Twitter feed to the right, you know what I've been trading lately. Little bit of this, little bit of FAZ (wow- what a horrible joke:) I actually went long FAZ this morning:

If you take a look at any chart of FAZ over the past week, it's pretty easy to make hindsight 20/20. Go from 50 to 100 in a short period of time- look for a correction- how bought back to 50? Emotionally, that kind of trade is a bit tougher to execute- especially if you watch every tick. FAS and FAZ are not for the light-hearted (could be the understatement of 2009).

As for my friends PALM and MAXY:

We'll start with longtime short, MAXY. Is it weird that I'm pulling for this stock? I mean, I'm still short- but I find myself actually hoping it will make a comeback! I guess that's the 'always pull for the underdog' sentiment in me. Anyway, I'm thinking about covering my remaining 100 shares in the next few days. Not that there's any great plays at the moment, but enough is enough- and there's nothing wrong with saving your capital for ideal situations. Here's the chart:

As for PALM, she sure has gotten feisty the last few days! I didn't listen to my own advise (wait til $7-$8 to re-short), and it's biting me a little. Not that I don't think it's headed back down toward $5 (already proved it could break $6 to the downside), but it could get interesting. I shorted 150 shares into strength yesterday (dumb), then averaged up today @ 7.55 (could be dumber). This stock was dead to me- and I should have waited for another supernova. But alas, I find myself short 250 shares avg. 6.97. Should be fun to watch!

Y'all had any memorable trades lately?

Evan

ps- If you'd like to see all my posts on FAZ, PALM, MAXY, etc.- just type the symbol in the search bar at the upper left of this page- the oldest posts are at the bottom.

Trade That Trendline!

2009-03-06T22:25:00.016-05:00

I came to a landmark conclusion about this blog today: There's nothing set in stone that says I can't stray from my Sykes/Swing strategy if I spot another opportunity to profit from this market's recent volatility. If you've read my past couple of posts, you know I've been trading FAS and FAZ, two ETFs (Exchange traded funds) that mirror the ups and downs (respectively) of the financial sector. I profited from FAS, as shown in this post, and held FAZ short overnight (3/5). Below is the chart of my two recent FAZ trades- yes, TWO. The first short was not real disciplined, and planned to be a longer term hold if necessary. Even though I was only short 35 shares at $95, I was more than ready to cover when it closed just shy of $100. Since this isn't my primary strategy, I wasn't comfortable holding FAZ overnight. As the volatility in these two ETFs have shown over the past year, it's kind of like holding the tail of a dragon. When the market opened, I waited patiently (never easy) for an opportunity to cover. Once it broke $94, I sent my limit order of $94 to TOS to cover. Since this thing was tanking at the time, my order was actually filled at 92.85 (fine with me). My next trade was far more honorable. I've studied technicals over the past few years (books, DVDs), and trend lines are sometimes screamingly obvious to spot. Not sure if Muddy over at Darkside Trading was using trend lines the last couple of days when he traded FAZ profitably in 53 of 54 trades (ridiculous), but I sure did:

Notice how FAZ stays within the trend lines I've drawn until it goes a bit too parabolic, giving me the opportunity to short above 110 (psychological round number). Also, as you can see at the bottom of the chart, the volume at that point had dried up (lunch time). I could have covered the first time it settled back down toward the lower trend line, but since one of my precious day trades was at stake (thank you PDT Rule), I rode it out a tad longer. Really wanted to short over $110 again later in the day, but wasn't thrilled about holding it over the weekend (which I happen to be taking off to visit my brother in Ft. Lauderdale). Looking at the after hours price (under $100), it probably would have been a good trade- but thanks to Charlie G.'s reminder, I need to be more disciplined.

Enjoy the weekend,

Evan

Mission Accomplished: PALM

2009-03-05T19:49:00.016-05:00

So here's the deal- I've held PALM for a while now, and felt comfortable covering my last 100 shares today as the market was tanking. It may not have reached the levels I was hoping for, as evident in this post, but I'm not so sure we aren't on the verge of a major, market-wide rally. I'm sure you're all aware of the M2M and uptick rule discussions, and we've fallen pretty hard and fast lately (though I know technicals still aren't looking very pleasant). I could be dead wrong and we're headed much lower (I can't begin to guess at what the big guys are discussing in Washington and New York), but I have a gut feeling a correction's coming. Either way, I made two plays I feel confident about today. If PALM goes lower, so be it (missed money is better than lost money), but if the market rallies, I'm sure tech will rise with it (even a stock like PALM, who many, including the not-so-silent TIMMAY), feel is headed much lower. I can always re-short, should PALM get up around the $7.50-$8.50 range.

My other trade today was, well...patriotic (that's stretching it a bit). After my recent close call with FAS, I've become very interested in his ugly step brother, FAZ. Bryan and Muddy's comments on my last post were definitely pondered, and I decided to short 35 shares of FAZ at $95. FAZ is pretty much the opposite of FAS- it is a 3x bearish-on-financials etf- wait...is my shorting this kind of like a double negative? I had a chance to cover for a small gain when FAZ fell to 93ish, but really didn't want to use another day trade (Since I have off three mornings next week to watch the market- Woohoo!).

1. Not using scared money (only short 35 shares of FAZ- of course, if it goes to $350 like the hoopleheads over on the Yahoo! message boards are saying...) and 2. Monitoring the price action,

Evan

ps- I'm on Twitter now, and you can see my Covestor-verified trades during the day (if I make any) over on the right in the green box. Also, in case you didn't know, you can scroll through my posts on any of the stocks I'm trading by typing the symbol in the upper left search bar of Blogger.

Dodged a Bullet

2009-03-04T19:39:00.008-05:00

Unbelievable. When you go through bouts of fear/greed/anxiety/throw-in-the-towel emotions, followed by Troy-inspired "Is there no one left!" ecstacy- you're probaly a: trading with scared money, or b: trading without a plan and/or without technical/price action confirmations. Such was the case of my last two trading days. I don't even need to link to my post about fleeing the temptation to trade FAS, because it's RIGHT UNDER THIS ONE (written the night before my brief stint as a kamikazi). Below is the chart of my folly:

Yes, after commissions I made $20.25 from FAS. Ask me if it was worth it. I'm not even going to add the trade to my 'Missions Completed' list (not worthy). I want to thank everyone who tried to warn me- great comments. Hope your day went well, and without any deer-in-the-headlight moments we traders are all too familiar with:)

Evan

That Old Feeling

2009-03-01T16:30:00.007-05:00

My Strategy's 2009 results (so far) would indicate that I may be on to something. That being said, I've been tempted lately to stray off course, and resort back to the types of ideas and trades that never used to pan out so well. Take for instance FAS. This etf (exchange traded fund) is pretty much at all time lows. Simply put, (from Yahoo! Finances) "it seeks to replicate, net of expenses, 300% of the daily performance of the Russell 1000 Financial Services". Here's the chart of FAS (or 'Forget Any Strategy') since it's inception:

Looking at the last two years (and the wonderful debacle the financial world has found itself in), one may tend to think these 3 things about FAS:

1. It has to have either hit bottom, or come dangerously close. I mean really, how much farther could it drop- it's like $4 now, after being above $50 not too long ago.

2. Man, if I can buy a couple thousand shares Monday, it's sure to reach at least $6-$7 within the next few trading days with all it's violent swings- and I'll look like a cyborg on Covestor!

3. This is the easiest money I could ever make- I'll be able to pay off that credit card debt I got from purchasing every Timothy Sykes DVD!

The catch is simple. FAS (and the market as a whole) could continue it's slide for the next 6 billion seconds (didn't do the math on that). No matter how 'Candy from a baby' this trade may appear, you'd be basing it on what? Gut feelings, the market 'owes you one', it's in play because Muddy's running a contest on it? (Btw, my guess for that contest, found here, is $7)

Fighting every urge to 'gamble',

Evan

Double Dipping ANDS

2009-02-24T19:09:00.014-05:00

*Trade Update Posted In Comments*

I have successfully implemented my strategy on ANDS. You may have read this post last week, and know that this is my second short of ANDS. It really is a beautiful thing to not only stick to a strategy, but profit from it when you follow your rules! ANDS met all the criteria I look for. Yesterday was it's first down day, so I shorted 150 shares at 7.34 near market open. This trade (and all others) are verifiable here, on my Covestor fact sheet. I'm still short ANDS for three reasons: 1. It continued to downtrend all day (Never really gave me a need to cover), 2. I'm not trading with 'scared money', and 3. I'm still subject to the PDT Rule, and didn't want to use up a daytrade (already used one on ANDS within this trading week). Below is the detailed chart of ANDS, showing my entries and exits so far (I will be home for market open tomorrow, and will look to cover if it doesn't continue it's slow death):

ZN has officially gone Supernova! This stock is highly illiquid, a low floater, and hard to borrow (I know, I couldn't find shares today with Think or Swim). This looks so much like NTIC (formerly NTI) from last year it's not funny. If it keeps going, think MXC and PDO (also small Oil companies).

We Shall See,

Evan

PALM Reading (Part 2)

2009-02-22T10:50:00.006-05:00

History repeats itself. We've always heard that, it's been documented countless times in various scenarios, and recessions come and go (this will certainly not be our last). In that light, I've decided to post a 5 year chart on PALM, showing a bit of that 'repeating':

Were the 'smile' curves necessary? Not really;) If this is a precursor of things to come (as price action/technicals will determine), PALM is most likely headed toward the $5 level.

If you're interested in professionals' opinions on technical analysis, I highly suggest you check out these videos by Brian Shannon. I'd like to thank Charlie G. for his blog (it's where I first saw a Brian Shannon video).

We Shall See,

Evan

ps- I was fiddlin' around with Blogger to see if there were any cool, new gadgets to put down the side of my page. I came across the 'plane landing' game- ridiculously hard! See if you can beat my score of 6 (fyi, I don't get paid if you play)

Mission Accomplished: ANDS

2009-02-20T19:00:00.013-05:00

No, this wasn't on my 'Missions Briefing' watchlist- it happened way too fast! I was alerted to the stock ANDS by this post on Timothy Sykes's site Thursday evening. Since it didn't meet all the criteria of my strategy yet, I had no intention of shorting- until Friday's price action changed my mind. Morning spikes on stocks that meet most of my strategy's criteria (this one fits the bill except that it hasn't had it's first down day yet) are great to ride back down. Since I was working all day and couldn't watch the chart, bid/ask, etc., I texted my mom early on so she could try and reserve 150 shares with Think or Swim in case of either A: morning spike, or B: afternoon fade. She texted back with, "What price?" I instantly knew the broker had located the shares and wanted to know the price in which to short, but I wasn't ready. Not able to call my mom, I just decided not to answer (She would never enter a trade on her own, even though she's pretty good after a year of listening to me and reading Tim's posts on stocks I'm in). She texted back that she couldn't wait for me any longer (apparently she had other things to do all day:) and that the stock opened at 7.49 and was already at 7.79 at 9:55 am. I decided (since it was definitely showing signs of a spike) to tell her to short the 150 shares at limit price 8.15. I figured one of two things would happen: 1. if it got that high there was an excellent chance it wouldn't hold, and 2. I was easing into a stock I would want to eventually short anyway. Enough of my jibber-jabber, here's the chart that shows my (Covestor-verified) trade:

And here's a 3 month chart to show where this stock has come from:

How I picked my exit- after what felt like 2 seconds, my mom texted, "Got it:)". This confirmed it was a genuine morning spike! Now what? I called her on my lunch break and asked her what the chart looked like at open, and if there was any volatility before the 'rocket launch'. She said around $7.45 it stuttered. I figured, if it did in fact collapse, it would shimmy a bit at that support level- so I told her to put a limit order to cover in just above it, at 7.50. And there you have it. The best thing about the trade is that it finished up for the day, which means I'm placing this stock on both my 'Missions Completed' and 'Missions Briefing' lists.

Enjoying the weekend,

Evan

Missions Accomplished: ARNA, SKYT

2009-02-18T19:29:00.008-05:00

Well, my Covestor account has me worried (It's starting to look like the Supernova pattern Timothy Sykes has me all too familiar with). I was able to cover two stocks today, ARNA and SKYT. The first was ARNA. Below shows the incredible tanking at market open (the light blue column indicates After Hours trading from last night through today's pre-market). I was torn on this trade. I really didn't want to cover (even though I was showing a profit), but two things got the better of me:

1. It was one of those 'fall off a cliff' openings I was afraid would bounce back at any time (I actually covered on the first big bounce @ 5.95).

2. I was home this morning to watch it- usually a bad thing because my emotions and psychological quirks take over (I'm sure none of you experience this;)

Next came SKYT. I wanted to cover this one today for one main reason: It wasn't up enough imo to short in the first place. I was showing a profit, so when it finally fell a little (low volume stock that moves like once an hour), I covered @ 3.20- you can actually see my 150 shares on any chart.

Still waiting on MAXY to really lose some ground, and PALM to forget it was hyped so much.

Steadily gaining ground on Master Sykes,

Evan

Three Charts, Three Fates

2009-02-14T19:15:00.010-05:00

I hope you're having a great weekend! I've decided to post charts of three of the stocks I've shorted over the past two months. You'll notice the same key elements in each of them: Volume gradually fades after spiking, once the seal is broken (first down day after big run-up) the stock gets as volatile as a bull seeing red, and finally the hopelessness sets in as it heads toward normal trading levels. In succession, I give you MAXY, SKYT, and GERN:

I'd just like to thank Timothy Sykes for bringing every single one of these stocks to my attention. I know how to find these types of stocks myself at this point, but if he's already doing the digging for me... :)

Mission Accomplished: GERN

2009-02-13T19:18:00.006-05:00

It's a shame my Covestor widget (right hand side of page) hasn't updated yet. I'm at all-time highs (yeah, what is this- my first week active?)! We'll start with GERN, the stem cell stock I admitted to being a bit leary of after reading Yahoo! Finance message boards. Seriously, pick any stock I'm short, pull it up on Yahoo! Finance, and enjoy the ridiculous pumping and bashing that goes on 24/7! I'll always try to post a chart of my completed shorts, though the longer it takes to cover, the less detail online charts will show.

In other news, I bit the bullet and sold 3,000 of my 5,000 shares of SIRI. If it goes to the moon (like you'll see repeatedly in Yahoo! posts) I'll do alright, but if it goes belly up (probably 7 out of 10 posts on Yahoo!), I'll survive. I'm banking on these shorts for the time being, and my strategy was quite profitable again today. Enjoy the weekend and check out my Covestor account Sunday-ish (it should be updated by then and you'll be able to see my trade prices if you're a member- which is FREE!)

O.K. with two 'Not-So-Volatile' Days (hopefully),

Evan

Sirius Problem

2009-02-11T19:16:00.007-05:00

No, that's not a typo. If you've been following my trades since I began this blog (and even more recently since I signed up on Covestor), you'll notice two stocks in my portfolio that I never mention: SIRI (Sirius XM) and THMR (formerly TMA, or Thornburg Mortgage). Everyone has skeletons in their trading closets, and these fellas are mine. I've ridden them down to almost nothing from about six months ago. I haven't the heart to part with them now, even though they continue to bludgeon me while yelling 'Yee-haw' on their way toward Subpennyland. Have any skeletons you'd like to share?

Besides the fact that Sirius's recent 'possible' bankruptcy news has eaten my gains from yesterday, I decided to short ARNA, and completely ignore rules #1-#3,#5 of my strategy. Everyone does this from time to time, but since I'm forced to ride my mistakes out (Rule #7), this trade could get ugly before the sun comes out. At least I only shorted 150 shares, and the stock is eventually due for a reckoning.

Learning about discipline the hard way,

Evan

My Four Horsemen

2009-02-10T19:27:00.006-05:00

So while the world of finance came a-crumblin' down again today, being short MAXY, GERN, PALM, and SKYT (even though SKYT gained .01) paid quite well. Covestor is usually one day behind on updating their clients' portfolio values, but somehow my link (on the right) is two. I can't wait for it to show my most recent shellacking of the S&P. I would rather have the chart showing myself vs. Timothy Sykes (currently #1 on Covestor), but can't figure out how to configure the widget that way (any suggestions?).

I made two trades today, both profitable and loss preventing. I don't mind admitting that the talking heads over at Yahoo! Finance message boards are beginning to get into my head. Seriously, I don't know why I even read the ridiculous posts (9 out of 10 are bias with an agenda), but GERN is a stock focused on stem cell research, a science nobody really knows what to expect from yet. Given that Obama fully supports this type of research, I sold 100 of my 200 shares of GERN today at 7.48. I know, I know- I'm letting fundamentals interfere with my technical positions. I'm still learning the 'true' relationship between fundamentals and penny stocks.

Today was all MAXY needed to finally drift back below my initial buy (how many months ago?), so I covered 100 shares of my 300 at 8.17 near the close. I did this for three reasons:

1. Didn't want to be greedy (been there done that at the end of a down day only to see a gap up the next morning).
2. There was an earnings announcement after close. Don't think MAXY has a prayer (announcement hasn't come out yet 7:27pm 2/10/09), but why risk all 300 shares?
3. The stock downtrended aaaalllll day, and I followed Rule #6 of my strategy.

Unfortunately watching the market tread closer to year lows,

Evan

My Strategy

2009-02-07T19:09:00.010-05:00

It's about time I lay out all of my rules/criteria for choosing the stocks I short. There are always minor variations in the chart patterns (and I'll be the first to admit to bending these from time to time), but I like to stick to these 7 'unbreakables':

1. A stock that's had an incredible run (think 300%+ gains) over a short period of time (not longer than three months, and preferrably within three weeks).

2. I like the $2-$6 range, meaning the stock's around $2 at the beginning of it's run, and $6 near the top (or when I would consider shorting). I've found $1-$4 and $3-$8 can also work, but you get the idea.

3. It has to have had it's first down day. Period. Why short into something that hasn't shown the first sign of weakness?

4. Try to short stocks with a market cap <$500 million. You don't want extremely small market caps, though, or the broker you borrowed the shares from may force you to cover.

5. Large Volume spikes at onset of run have dissappeared (looks like a downhill slope).

6. Commit 100-300 shares initially to a short, and add only once more if it spikes (short squeezes) more than $2.

7. Fight every urge to cover!!!

I haven't completely mastered the decision-making process when comes the covering for a profit. Currently, I'm using the same stair-stepping strategy used in shorting (Rule #6): Ease in and ease out. With the exception of Rules 6 and 7, this is pretty much the strategy I've learned following Timothy Sykes.

Warning: Do not try this at home!

Triple Play

2009-02-04T18:50:00.009-05:00

I am now officially short MAXY, GERN, and PALM. All three met my strategy's criteria, and after having posted about each (except for GERN, which I had on my Stock Status's 'Mission Briefing' watchlist), I'm pleased with my initial entries. I had off this morning, and was ready with reserved shares for both PALM and GERN by market open (compliments of Think or Swim). I'll skip any rationale on MAXY, since those of you following this blog know I've been short about a month. As for PALM (which happened to be my first short of the day), all you pretty much have to do is look at this 1 year chart:

Sure, it may go higher in the near future (which is why I eased in with 100 shares), but I doubt the 'PRE' phone is enough to sustain this quick rise from the $1's. I know I said I could care less about the fundamentals, but this really isn't a true penny stock- it's the company that brought us the Palm pilot. Regardless, it's either consolidating or losing steam (volume leans toward the latter). Now that this account is on Covestor, you'll be able to watch the outcome. Since I don't plan on selling (aka 'covering') for a loss, this could be a wild ride!

Last but not least...GERN! This stem cell play gave me the perfect entrance on it's midday spike. I shorted at 7.96 and already have a decent profit on my 200 shares. If I listened to some of the posts (pumpers galore) on Yahoo! Finance message boards, I'd be freaking out! There's a reason most financial sites claim to be 'For entertainment purposes only':) Does this 1 year chart look familiar?

If you're a trader, and haven't opened a Covestor account yet- do it! It makes posting sooo much easier, knowing you don't have to take screenshots of your positions (like I did numerous times last month) for people to believe you. Thanks for annoying me enough, Tim:)

Happy transparent trading,

Evan

Watching Paint Dry

2009-01-30T19:40:00.005-05:00

In case you're wondering, I'm still short 300 Shares of MAXY (and still have my GTC order to cover 200 shares at 7.90). It is down trending nicely (even if it's slooooow). There are a couple 'bearish' technical indicators that look promising at this point. I wouldn't even know where to begin to try and explain technical analysis on this blog (and don't have the time or the energy), so I'll just use links to the terms I'm referring to and charts to better illustrate my theories ('theories' meaning that I welcome other opinions). Below is a chart taken from Yahoo! Finance and given the once-over in Microsoft Paint. I've only added black lines to show the first bearish indicator of 'down trending' (when a stock makes lower highs and lower lows). The second indicator is MACD. You'll notice, if you click here and read the Wikipedia definition, that when the MACD goes below zero, it is a bearish signal. This seems to be about to happen to MAXY even though the price has held it's ground.

GERN is my next target, thanks to TIM for bringing this stock to my attention. Stem cell stocks are 'in play' right now (meaning this sector is pretty much en fuego, being both volatile in price action and volume). It reminds my of the late '90s tech boom, when every company (penny stock or not) associated with the Internet was blowing up (as detailed in Timothy Syke's book- An American Hedge Fund). Thanks to the new Obama Nation (abomination?), stem cell research has been given the green light. I would love to see a true 'Supernova' (see last year's stocks PDO and MXC for supernova-type price action) come out of this new 'gold rush'.

Happy prospecting,

Evan

Secret Agent vs. Trader

2009-01-24T19:29:00.004-05:00

So my sister's wedding was this past weekend (she made the most beautiful bride ever!) and, being one of the groomsmen, I rented a tuxedo. One of the co-workers from my night job happens to be in design school for photography. Tuxedo...Photography. Was it even a question as to whether or not I do a James Bond photo shoot?

Yeah, I'm a pretty big fan. You know it's bad when I commited to 6am for the shoot- the morning after the bachelor party! The more I thought about what my next post would be (while waiting for MAXY to tank), the more clear my answer got- Compare the similarities of the world's best spies to the world's best stock traders:

1. TRAINING

In order to be the best at something, you have to be willing to make whatever sacrifices necessary- especially in the beginning. For undercover operatives, as well as all branches of the military, this starts with boot camp. Strict workout regimen, diet, and mental training begin to shape the individual into a soldier fit for battle (though the battle has not yet begun). With traders, this begins by watching the markets, reading as much material as your brain can handle (which isn't much at first when it comes to finance books), and paper trading.

2. DISCIPLINE

Without discipline, it is impossible to succeed long-term. As a spy, lack of discipline and focus could mean your life. As a trader, without discipline you may as well blend your money into a smoothie- jumping in and out of trades due to boredom or 'gut-feelings' is the quickest way to financial ruin.

3. STYLE

That's right- Style! James Bond has that certain 'something' that makes him unique. He's charming, British, likes his drinks a certain way, and loves to say his last name first. His style is evident within five seconds of coming across one of his 22 movies while channel surfing (Well 21 since Quantum of Solace isn't on t.v. yet). As a trader, you have to find that certain 'something' (most often referred to as a 'niche' trading style) that works for you (ie. is consistently profitable). Maybe your great at trading day-rangers like Muddy or shorting hyped penny stocks like Timmay. All I know from about a decade of trading (which spans countless profits and losses) is that your style is just that- yours. Simply following others' trades isn't going to cut it longterm.

Enjoy the weekend,

Dawson...Evan Dawson.

MAXY PAYNE

2009-01-21T19:05:00.014-05:00

Since Max Payne (the movie, starring 'Marky Mark' Wahlberg, adapted from a popular video game series) was released this Tuesday, I thought it only fitting to tie it to this post. Below (left)
is a perfect representation of the scowl I had today while viewing MAXY's chart (right).

I was working during market open (as usual), and failed to see MAXY trading under $8. When I texted my Mom (because my brother-in-law is traipsing around Jamaica on his honeymoon) at 10:10am and asked "Maxy tankin' yet?", she responded with "8.19" at 10:30am. Great, I'm thinking- it's gonna test $8 again, and this could be the straw that breaks the camel's back. Little did I know, MAXY had opened under $8!
Low of the morning shows $7.77. I would have loved to have been alerted (better yet at home with my finger on the 'trade trigger') when it was under $8. I would have probably covered the same 100 shares I've been profiting on while MAXY decides when she'll crack- but alas, in light of Sir Tim's 'transparency' post, who knows what I would have done. That's all 'woulda, should, coulda' talkin'. I do know this- I've placed a GTC (Good Til Cancelled) order on Think or Swim to cover (buy) 100 shares with a limit price of $7.90 (just in case it breaks $8 again in the near future and I'm not able to witness it).

I'm still completely at ease with my outlook and forecast for MAXY, I'm just wishing I could have ridden the 100 shares for another round. I need to seriously start thinking about buying an iPhone so I can use the Think or Swim application ThinkPod on my lunch breaks.
Charlie G. alerted me to this (potentially $200) idea. I guess surrendering to Apple is inevitable, like MAXY's test of $8 this morning. Scowl.

PALM Reading...

2009-01-16T17:35:00.006-05:00

No, I don't personally condone or endorse palm reading as it relates to fortune telling, soothsaying, etc. I'm interested in the ticker symbol PALM as my next possible short. Darkside Trading, using Muddy's incredible scans, alerted me even before Timothy Sykes this time (probably because it wasn't up enough yet for his risk/reward ratio). I texted my Mom (who was way more available than my future brother-in-law Eric this morning considering he marries my sister Sunday) to short 200 shares of PALM if it surged over $9.

Let me just start a completely new paragraph here to comment on one of Timothy Sykes's posts (since it relates somewhat to me telling you that I texting my mom this morning). Tim is very transparent on his site about all his trades, most of his financial information, and even his extracurricular activities. I've been able to learn a great deal from him because of this. In this post of his (disclaimer: He can be eccentric at times and it shows in his writing:), he slams those who are less transparent. I don't blame him- he's had so many people (most of the time with anonymous or fictitious names) leave degrading comments on his site that the only way his business model works is by being an open book. I feel the same way, and want to set the (my) record straight:

1. I began this blog because I thought it would be really cool to detail my trades like Tim and many others. It would help me learn from my mistakes while I try new strategies while I slowly get the word out about the mission trips (which will definitely happen as time permits).

2. I am not claiming to be a stock guru. Trade at your own risk and learn from my mistakes with me. I view my trading as a supplemental income, and will probably never be able to live on the profits of day trading- that takes the kind of time/money/dedication very few are fortunate to have. My primary goal is to make enough to fund one mission trip/year (they usually run anywhere from $2000 - $5000 for a two week trip). My most recent was to the Amazon, where I took a picture of me reading Timothy Sykes's 'An American Hedge Fund' on the river- my two passions: Missions and the Market.

3. You'll see various ads on my page powered by Google's Adsense and hopefully some from Amazon (linking to books that have helped me learn to trade) and Tim's site in the future. I'm not suppose to urge you to click on them because that breaks the contract with Adsense, but it is the only way (and trust me, the revenue is extremely minimal at this point) I know how to make money from writing this blog- which isn't my goal but it's a nice 'extra'.

4. As I've said, I work two full time jobs (Target from 6am-2:30pm and Living Word Christian bookstore from 3pm-9:30pm five to six days a week). In order for me to have this blog, it takes sacrifice (usually posting on breaks at work or drafting half before I go to sleep and half when I wake up). The human body is simply amazing- and able to be pushed far beyond what we think possible. Unfortunately, like the stocks detailed on this blog, sometimes I crash.

5. I have opened a Covestor account under the name islandminister, and will be adding Think or Swim as the account's broker in order to let the world view every trade. I do have accounts with Raymond James and TD Ameritrade as well, but they only hold my IRAs and mutual funds (whose performance, needless to say, have been less than stellar over the past two years).

That's pretty much it- oh yeah, MAXY failed to crack $8 again, but is still downtrending nicely (lower highs and lower lows).

Have a restful weekend- I'm off to the bachelor party!

Evan

Picture Perfect

2009-01-15T16:37:00.008-05:00

What a great day for this Sykes/Swing trading strategy! As mentioned in my previous post, I'm eagerly anticipating MAXY to break it's $8 support level. Today marked it's third attempt and, despite my previous 'Third time's a charm' wishful thinking, third failure to crack $8. When it couldn't break support after multiple attempts (as evident by today's chart below- courtesy of Yahoo! Finance), I decided to cover 100 shares.

To help you understand why I only covered 100 shares instead of the full 300 (already profitable) shares, here's a fairly detailed time line of thinking and text messaging to my broker (aka. future brother-in-law Eric who happened to be home with Think or Swim's software open:)

Text to Eric (10:01am): Maxy?

Text to Evan (10:15am): Down to 8.10

Text to Evan (10:23am): Low 8.04 back to 8.10

Text to Eric (10:38): Cover 100 under 8.05 if it gets back

Text to Evan (10:45am): Covered 100 at 8.05

I knew that MAXY was flirting with $8, and hoped it would break it- but when it didn't, I opted to play it safe (fearing another spike after another failed attempt). I figured (and this happened to be correct) that I could cover a portion of my shares, lock in some profits, and re-short the same 100 shares at a higher price if it bounced off support (like it did). My re-short of 8.47 basically happened because it was late in the day and I had the option to average up my short position. Below is the screenshot of my Think or Swim account's trading history over the past week to confirm. Could tomorrow be the fateful 'dip into the $7 range' day for MAXY? Stay tuned...

Happy Friday Trading!

Evan

Oh MAXY, you card!

2009-01-14T13:22:00.007-05:00

Whenever I can, I like to check in on my stocks during actual trading hours (extremely rare occasions with two full-time jobs- another reason why this strategy works well for me). When I opened Think or Swim to check in on MAXY around noon, the 1 minute chart (basically showing yesterday's close and today's action so far) made me laugh out loud. The chart below wasn't altered in any way (use any online chart to confirm), and clearly shows MAXY bouncing off 'my' support level. That's right, MY entry-price $8.33 level of 'support'.

Feel free to comment and let me know how many of you have experienced this lovely type of coincidence before- when you're certain the entire market (at least the penny stocking world) is after you;) Really, I didn't know my 300 shares were such a force to be reckoned with. Needless to say, at this precise time (1:28pm 1/14/09), MAXY is still down trending toward the $8 psychological support level (after a 'watching paint dry' full hour of sideways price action at $8.65). This next attempt will mark it's 'third time's a charm' testing of $8.

Content staying short,

Evan

Mission Accomplished: HSNI

2009-01-12T19:18:00.008-05:00

I've completely closed my HSNI short by covering the last 50 shares at $4.84. Below is a screenshot from Think or Swim showing the exact time of my fill, as well as the total P/L (profit/loss) for HSNI and running P/L for my short-in-progress MAXY.

I have to say, this stock couldn't have reacted more perfectly. Here is the progression from rise to fall (feel free to click here to follow along with the 3 month, Yahoo! chart):

1. Stock had dropped to $1.50ish in early Dec. (just a bit over a month ago)
2. After breaking out of numerous resistance ceiling's (mostly around the $4 range), volume spikes (and no doubt some short-covering) helped to push this over $6 (enter my initial short), then $7.
3. Volume began to fade along with the stock price.

This one really was that simple. I documented my thoughts all along the way with this blog, even saying that I would cover in the upper $4s. I was surprised it happened as quickly as it did, but said all along it was inevitable. After commissions ($45) my total profit for HSNI was $403.52. Not bad for two weeks and what I'd call a no-brainer play. Below is an example of a 5-day chart any short loves to see.

Thus concludes my celebrating. I'm out to find the next short (Thanks to TIM for finding HSNI) while waiting for MAXY to fall. I'd love to hear any thoughts, critiques, and/or questions on this trade.

Thrilled at my strategy's first big confirmation,

Evan

Can you say 'Afternoon Fade'?

2009-01-09T18:40:00.009-05:00

Talk about a textbook technical breakdown late in the afternoon ('fade' is the term I'm now accustomed to thanks to Timothy Sykes)! You'll notice in the chart below, that when our dear friend MAXY (please note that as of right this second- 6:44pm on 1/9/09- I have absolutely no idea what MAXY represents, the company's history, etc.- the fact that both TIM and Darkside originally mentioned them got me to watch the chart, nothing else) broke through the LOD (low of day) of 9.20, it was off to the races.

I'm still short my original 300 shares, having entered at 8.33 (if you're new, my strategy won't let me cover until a trade's profitable). Notice that the lovely AH (After Hours) price of MAXY is one cent above it's high for the day? Can we say 'manipulation'?

HSNI is slowly fading into oblivion once again. I'm still short the 50 shares I plan on covering somewhere in the $4 range.

XTXI (again, have no clue what this ticker symbol even stands for) tanked early on, so I didn't short as I'd planned if it had spiked early in the day. You're welcome to click here to see the XTXI's chart. Be my guest and click the 1 month chart to view the stock's meteoric rise. What goes up...

Enjoy the weekend,

Evan

One Down, One to Go...

2009-01-08T15:57:00.009-05:00

I've officially covered my HSNI position for a profit of about $350 so far (I say 'so far' because with so much downside potential still left in this stock, I opted to keep 50 shares short- which I'd like to cover in the $4 range). I could explain it all in detail, but I'll let this Think or Swim chart that I've used good ol' Paintbrush on, along with my past few posts, to do it for me.

You'll notice I covered for a small loss on the 26th once it broke out above it's 6.40ish high from 12/23/08. I still used solid technicals, but overall I still believe it doesn't matter all that much- 'certain' penny stocks that have gone from $2 to $7 (as I've learned from TIM) will settle back down if you can ride out the short sqeezes that can occur. I'm very pleased with this outcome on HSNI and first confirmation that my strategy is sound. Taking my emotions out of play and simply relying on time/technicals to do my work for me is such a relief- and profitable.

As for MAXY, the volume continues to wane- giving me the impression that the end is near. We shall see- if it continues to climb and test it's previous $12 resistance, I could be short my 300 shares for a bit longer than I'd hoped. Regardless, I'm sitting on a pile of cash courtesy of the Home Shopping Network (HSNI) that I'll use to short the next victim. I don't see anything that fits my strategy's description just yet (aside from XTXI which I may short on a morning spike tomorrow), but if there's two things I've learned trading that I've yet to master, it's 'don't force a trade' and 'don't enter a trade out of boredom'.

May your next cover be a profitable one,

Evan

Patience Pays!

2009-01-07T10:51:00.010-05:00

At this early stage of my blog, I'm not sure how many people are actually following my trades, but my potential profits are climbing even as I type (10:55 am EST 1/7/09). If the page views have been affected by you (and not just me making sure I posted something correctly), then you may know I'm short HSNI and MAXY.

I haven't posted since revealing my short positions because I haven't made any trades...until this morning. In the future I'll try to do better at mentioning my day-to-day thought process while watching the volatility in the stocks I short. For now, just know that my strategy (short stocks that have run too far too fast, had their first down day, and wait until the position is profitable to cover) is holding strong. Watching HSNI continue it's uptrend after the first down day (12/24/28) of it's initial run hasn't been what I'd call pleasant- but patience is the key. Below is a 5 day, Think or Swim chart of HSNI I took a screen shot of this morning. Notice that I covered 150 shares at 9:45 this morning (a profitable trade from my 150 share short at 7.20). I still have the original 250 short that I'll look to cover for a profit at a later date (unless of course it completely tanks this afternoon).

My reason for covering 150 of my 400 shares was fairly simple- I had a profit from those shares, the stock opened in near free fall once the volume picked up, and it hesitated around 6.73 longer than I was comfortable with. Covering 150 shares gives me two options: Re-short the 150 if HSNI retests it's 7.50ish high and fails, or cover the remaining 250 at a lower price should it continue to fall (as I'm typing, it has recovered to 6.84- the time is 11:18am EST). Looking at the above chart, you may be wondering why I wouldn't cover the whole amount somewhere in the $6 range. If that chart representedw more than just a few days, I'd agree with you (though I wouldn't have shorted after such a small run). If you take a look at the 20 Day chart below, you'll see that HSNI has quite a way to go before retesting any yearly lows.

I'll wait to post any charts of MAXY until it shows major signs of weakness. When it eventually breaks through the mammoth $8 support, things should get both interesting and profit forming. For now, it's creating new highs (though none to write home about).

Please feel free to comment and ask any questions (about the charts, strategy, missions, etc.). I'll be posting about future mission trips and projects as they emerge. I'm seriously thinking about taking a team to the Amazon and partnering with this ministry in the summer of '10. It would be great to profit enough from trading to fund that trip (costs about $3000 for two weeks, including everything from flights to bug repellent).

Patient Trading,

Evan

Happy New Year!

2009-01-01T19:08:00.007-05:00

This year begins with two open short positions- HSNI and MAXY. If you've followed either of these stocks over the past few weeks, you know that being short hasn't been very profitable...yet. If there's one thing I've learned from following the technique of Timothy Sykes, it's that everyone of the stocks he deems worthy to eventually short always end up lower. I'm not kidding- virtually every single stock (exception being the ones he's recently spotted as short setups) would have made you money had you stayed short long enough. Even 2008's most notable 'supernovas' such as PDO, MXC, and NTI (and others that looked like freakish, moon-bound rockets) all stalled over time to trade at prices below Tim's initial spotting. So what's the point? Simple...

I will hold these positions until I cover at a lower price. I'm short 400 HSNI average price 6.95 and 300 MAXY 8.33. I've watched too many stocks falter just days after covering for a loss or reading how others kept getting squeezed. Now if the stocks were just chosen at random, this would be an extremely risky and foolish thing to do. Having first seen these ticker symbols on Darkside Trading and Tim's Site, I'm well aware that they are the product of manipulation. Now the way I see it, there are three scenarios that could unfold with each of these stocks. The first (and hopefully correct) theory is that both will tank this week passed my initial entries, funding my account instead of draining it should I cover prematurely. The second is that these two stocks are far from being manipulated, shorts will continue getting squeezed daily, and the culprits will climb to nose bleeding heights before meeting Mr. Newton and stalling out (along with their precious volume). This would be unfortunate, since I would have to tie up my capital and potentially miss other great setups. The third and final occurrence I've witnessed in these types of stocks, such as the previously mentioned NTI (a Superman pump now known as NTIC), is where an accumulation period transpires during what I call the 'calm' before the 'pop'. A stock 'everybody knows is doomed' seems to just hang in a narrow channel, not really giving any chance of escape to either longs or shorts (hence- MAXY, with the exception being the $1 drop on Tuesday). In all of these scenarios, the final outcome is clear- the stocks eventually go lower.

Since my schedule (two full-time jobs) prohibits me from trading most days, I've had to sit by the sidelines while others shorted the monsters. I was able to reserve and short CNEX on that beautiful fateful day last year when it dropped more than 50% because I happened to be off. Like countless others, I could have been early a few days and still made a decent profit. Heck, I could have shorted both PDO and MXC around 15, watched them go to 30 and 50 respectively, and covered tomorrow for decent gains. The only problem, for obvious reasons, would have been tying up capital.

Basically, since my emotions and psychological issues during the 'heat of the trade' sometimes hinder my profits, I'm taking both out of the equation. I will stick to basic rules I've learned from hanging around the 'Dark Gift' masters: find a stock with a decent, short-term jump- say from $2 to $6-$8, wait for the first down day (which HSNI and MAXY have had), and stick to my trading plan (which happens to be disable the 'cover switch' until a 'gain' unlocks it). Any thoughts?

Happy '09 trading,

Evan

Trading Week Ending 12/26/08

2008-12-27T18:46:00.014-05:00

As mentioned in my previous/first post, my capital for trading has diminished greatly due to other investments and travel/missions. I am, however, trading extremely cautiously with an account I jointly oversee at Think or Swim. My future brother-in-law (also an experienced missionary) and I are using this account to both learn necessary skills needed to consistently trade profitably (a feat in which over 90% are said to have never achieved) and slowly add to it's bottom line.

Below, I've added charts and screenshots of the aforementioned Think or Swim account in order to illustrate this past week's trades (Sensitive account information has been intentionally left out). If you're unfamiliar with Think or Swim, I highly recommend checking out their website (I've always gotten great customer service from them, as well as reserves for hard to borrow stocks). This first screenshot details trade history (parameters set for 7 days). You'll notice the dates and times of the trades to the left, as well as the executed trade price on the right.

Below is a screenshot of a 5 minute chart for HSNI (a stock I was alerted to by both Timothy Sykes and Muddy over at Green on the Screen and Darkside Trading). My rationale for the initial short: HSNI had multiple up days in a row, and imo will inevitably fall back down to 'normal' price levels. The morning spike to 6.62ish had been the highest of the current run, so I was shorting with the prediction that, given the fading mid-day volume, HSNI would be unable to breakout passed that price. Did I short early and without confirmation? The simple answer is yes. I did have a mental stop-loss in place should my theory be proved wrong and the stock climb to make a new high. My prediction proved to be correct, and I decided to hold overnight as the stock failed to rise above my entry price late in the day (which would mark the 2nd retest of the day's/current run's high). HSNI had a nice drop most of the short trading day (which I would have covered into had I had more than 200 shares in play). I decided when the stock began to rally before close. Friday's volume was fairly unimpressive, and Tuesday's triple top gave a pretty firm ceiling for the stock to break through, so I decided to re-short after the morning spike had started to wane. I held over the weekend, wanting to see an identical drop as in the Tues.- Wed. price action. With the fading volume and failure of HSNI to make new highs after several attempts, this stock 'should' react accordingly. Knowing that stocks can pretty much do whatever they want, my mental stop-loss is in place. I'm already in the money at this point with HSNI, so barring a huge gap-up, I should be able to cover tomorrow. Again, I probably would have covered when the morning spike fell close to 6.20 if I was trading more shares.

This chart from Yahoo finance details the same time frame for HSNI as the one above, but shows the volume, clearly defined dates (both are also on the TOS chart but it would have made the image unnecessarily large) and is accessible by anyone with an internet connection. It would, however, be virtually impossible to trade using Yahoo charts because of the 10 minute or so time delay.

Below is the actual profit/loss information from the modest Think or Swim account. I've listed the top ten gainers of the last year to demonstrate the validity of shorting penny stocks that have run too far, too fast (a strategy I first learned from Timothy Sykes). It's no coincidence that 7 out of the top ten fit this description (the other three- MMM, FRE, and BBY aren't penny stocks and I probably shouldn't have been trading them in the first place). The bottom of my P/L list is made up of similar 'Big Board' stocks, and to my detriment carry larger losses than the top ten gainers- valuable lessons are all they gave me.

Merry Christmas!

2008-12-25T10:40:00.008-05:00

I'm wishing everyone a Very Merry Christmas and Happy New Year!

My goal for this blog is simple: Journal my adventure in funding a trading account, in which I will eventually be able to bypass the PDT Rule, while successfully funding short-term youth mission trips. Though funding an account is definitely not a new concept or endeavor that countless have tried, I've yet to see a blog detailing how one's profits have benefitted others by way of ministry.

Apart from trading, I've been involved in another kind of investing- real estate. At the time of this post, I'm sure I don't have to remind anyone about the less-than-stellar returns in real estate over the past few years. Having used funds from my trading account to buy various properties, I no longer have any left to fuel my two passions: Missions and the Market. I will have much more detailed posts in the near future on everything from my likes and dislikes regarding online trading sites (have personally used TD Ameritrade and Think or Swim) and lessons on trading (ie. shorting, penny stocks, options, etc.), to choosing the next country I plan to take youth for a cross-cultural experience.

Since an extreme few know me in the trading world, this post (though my blog's first) will undoubtedly be unread and probably not referred to in the future. Welcome to humble beginnings. I had planned to start posting Jan. 1st, but alas- my excitement over following my life in trades and travel got the better of me (could have said 'impatience'). I'm also using this post to learn the basics of Blogger and Google's Adsense. Though I'm currently in the design phase of this site, I welcome any questions you may have about me in general, my trading and/or mission experience.