I'm Calling It!

     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

Mission Accomplished: MAXY

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)

How Do You Eat An Elephant?

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).

How I Sleep at Night

     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

Took More from FAZ's Fat Fingers

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.

Missions Accomplished: ARNA, SKYT

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

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... :)

My Four Horsemen

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

Triple Play

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

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

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

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...

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

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!

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

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'?

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

Patience Pays!

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!

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