Watchlist for August 6th

There is not much to look forward to tomorrow. Instead, go back over GGC’s chart and study it. Memorize it. Such great opportunities are rare. Do not be like me: be prepared for the next one.

Also look at SUF as a potential long on strength only. It is a horrid company so I won’t trade it, but it may be good for a second up day.

Disclosure: No positions. I have a disclosure policy.

How I missed an easy $8,000 on Georgia Gulf Corp. (NYSE:GGC)

GGC an easy short once it went negative on the day. It was quick, but a smart trader would have nailed it for $4 per share in under 20 minutes. Unfortunately, despite anticipating this and having my 2000 share short order ready at SogoElite (which had shares of GGC to short), I completely missed the trade.

See the video:

Short 2100 GGC  @ 31.062 (at SogoElite)
Cover 2100 GGC @ 30.977
+$177.24

Other trades for the day:

SLD    200    WUHN    false    Stock (SCM)    4.00    USD    ISLAND    09:31:17        1.00
SLD    200    WUHN    false    Stock (SCM)    4.00    USD    ISLAND    09:31:22        1.00
SLD    200    WUHN    false    Stock (SCM)    4.00    USD    ISLAND    09:31:29        1.00
BOT    600    WUHN    false    Stock (SCM)    3.84    USD    ISE    11:06:20        3.00
+$90

+    SLD    2,050    SCLN    false    Stock (NMS)    4.200    USD    ARCA    09:39:12        10.25
+    BOT    2,050    SCLN    false    Stock (NMS)    4.170    USD    ARCA    09:40:08        10.25
+$40.50

Short 1300 WUHN @ 3.798 (at SogoElite)
Cover 1300 WUHN @ 3.585
+$277.28

+    SLD    6,000    CHINA    false    Stock (NMS)    2.792    USD    SMART    15:41:25        30.00
+    SLD    6,000    CHINA    false    Stock (NMS)    2.780    USD    SMART    15:41:28        30.00
+    BOT    6,000    CHINA    false    Stock (NMS)    2.763    USD    SMART    15:42:58        30.00
+    BOT    6,000    CHINA    false    Stock (NMS)    2.770    USD    SMART    15:43:30        30.00
+$118.30

Today’s profit: $703.82

Disclosure: No positions. I have a disclosure policy.

Scanning for supernovae

Yes you read that right. The plural of supernova is supernovae. I am obsessive about grammar. By the way, the plural of index is indices, not indexes. Anyway, supernovae are stocks that are up an insane amount, over 100% in a couple days; Tim Sykes originated the term. The supernova du jour is GGC, which I am now looking to short aggressively on the right price action (what do I mean by the right price action? Buy Sykes’ excellent DVD

I am a happy user of Stockfetcher.com. Here is the code I use to scan for supernovae.

show stocks where close gained more than 99 percent over the last 5 days
and price is between .25 and 15
average day range is above 8
and volume is greater than 500000

set{ DayChg1 , close – close 5 days ago }
set{ DayChg2 , DayChg1 / close 5 days ago }
Set{ 5DayPctGain, DayChg2 * 100}
add column 5DayPctGain
and sort column 5 descending
Set{5DaysAgoPrice, close 5 days ago}
and add column 5DaysAgoPrice

Looking for my watchlist? This is it. GGC is the stock I’ll be watching tomorrow. WUHN is also almost a supernova but I couldn’t find shares to short. AIG may be interesting, along with other finance plays, but I don’t like trading finance stocks. CMLS also on watch, more likely a good buy tomorrow than a short. I probably won’t play it.

Disclosure: No positions. I am a customer of Stockfetcher.com, subscribing to their cheapest package. I have no other relationship with them. I have a disclosure policy.

August 5th Trade Recap

Another video recap today.

Here are my trades:

Short GGC 1000 35.514
Cover GGC 1000 37.16
($1626.00)

GGC was bouncy and my entry wasn’t great. I should’ve shorted at $36.80 on break of $37 resistance, not on break of the day’s low.

+    BOT    6,000    SCLN    false    Stock    4.164    USD    ARCA    14:58:19        30.00
+    BOT    6,000    SCLN    false    Stock    4.173    USD    ARCA    14:58:22        30.00
+    SLD    4,000    SCLN    false    Stock    4.220    USD    BATS    15:00:36        20.00
+    SLD    6,000    SCLN    false    Stock    4.214    USD    BATS    15:00:52        30.00
+    SLD    2,000    SCLN    false    Stock    4.320    USD    BATS    15:11:49        10.00

SCLN was a TimAlert. +$661

+    SLD    0    ICOG    false    Stock    .000    USD    SMART    16:16:17        30.00
+    BOT    0    ICOG    false    Stock    .000    USD    SMART    16:16:27        4.50
+    BOT    0    ICOG    false    Stock    .000    USD    SMART    16:15:51        23.00

I had made $980 on ICOG but the Nasdaq canceled all those trades so instead I lost the $57.50 I paid in commissions.

Overall profit today: ($1,022.50)

FRNTQ.pk and WUHN did what I exptected them to do. WUHN a bit too choppy and too wide of a spread to easily trade. FRNTQ.pk easy short but I was distracted; I had a sell order ready but didn’t execute because it was already down 10%. At one point it was down 42% on the day.

Disclosure: No positions. I have a disclosure policy.

August 4th recap and watchlist for August 5th

I received some positive comments on yesterday’s video. In the future I will post trade recaps and watchlists in either video or text, whichever seems most appropriate for the job at hand.

Today was an all GGC day. I messed up my first trades, going long GGC (as I suggested in my watchlist from last night) on its cross of $27 (breaking yesterday’s highs). Besides messing up by having too tight of a stop (about 50 cents for my mental stop), I was unlucky.

BOT    200    GGC    false    Stock    27.3300    USD    SMART    09:31:35        1.00
+    SLD    200    GGC    false    Stock    26.870    USD    SMART    09:32:22        1.00

After my first attempt at buying I got back in and was stopped out again a mere 12 cents above the day’s low. Luck plays a critical role in trading.

BOT    200    GGC    false    Stock    27.1600    USD    NYSE    09:34:17        1.00
+    SLD    200    GGC    false    Stock    26.615    USD    ARCA    09:34:57        1.00

But no matter, that was only a $205 loss on the pair of trades. When GGC spiked to $47.19 (up almost 100%) I looked to short as it faded. While Interactive Brokers had no shares, Penson did:

GGC 200 shares shorted 39.8189 covered 35.81

I got almost exactly $4 per share on 200 shares, netting +$801.77. Overall, not a great day but not bad either.

+$596.77 for the day.

While I missed playing it, NLS from last night’s watchlist behaved nicely and would’ve made a nice short. VHC was down a little more. FRNTQ was up big.

Watchlist

GGC – Could be a nice short on green/red action.

FRNTQ.pk – Will be a good short on green/red action someday soon. Currently there are shares at IB.

WUHN – Up 60% on no news with huge volume? This thing will very likely be up big tomorrow too. Buying it when it breaks today’s high of $3.51 would probably work. Short on breaking below today’s close (but it is unlikely to do so).

Disclosure: No positions. I have a disclosure policy.

Trade recap for August 3rd & watchlist for August 4th

Today’s trade recap is in video format! Please take a look at it on Screencast.com to see it in high-definition.

Trades:

+ BOT 200 TSPT false Stock (NMS) 9.080 USD ISLAND 09:34:01 1.00
+ SLD 200 TSPT false Stock (NMS) 9.072 USD SMART 09:43:38 1.00

+ SLD 6,000 VHC false Stock 2.960 USD BATS 13:50:58 30.00
+ BOT 500 VHC false Stock 2.770 USD SMART 14:02:59 BookTrader 2.50
BOT 500 VHC false Stock 2.75 USD ISLAND 14:03:21 BookTrader 2.50
+ BOT 5,000 VHC false Stock 2.960 USD SMART 14:21:11 25.00

+$134.40 on the day.

Watchlist

This is a bit abbreviated tonight.

NLS – big move from $1.12 to $2.90 in eight days with no red candles. No news, short watch.

GGC – still on watch until it stops moving. I am long-biased. When this tanks it may tank quickly, but any strong move above today’s high of about $27 might make a good buy.

VHC – a bit choppy but still finished red without me in it. We should see more downside; I probably won’t play it but there is good risk / reward on the short when it goes red tomorrow. A tight (mental) stop would be a good idea.

FRNTQ.pk – up big on news it will get bought out of bankruptcy, likely by LUV. The equity is still probably worthless. Shares to short will be impossible to find though.

Disclosure: No positions. I am a customer of Tim Sykes and InvestorsUnderground and an affiliate of both of them. I have a disclosure policy that gives details on those relationships.

August 3rd watchlist & poll

First, a poll:

Watchlist

USCN (OTC BB) – Potential short, absolute crap financials and it has been pumped endlessly. This should be a great short on green/red action although there likely won’t be any shares available to short when the time comes.

VHC – they did not win a patent ruling, only got a preliminary ruling that increases the odds of them winning. The fade after the brief spike following the news last Friday indicates that this will likely fall more, and it closed the day up about 100% so there is plenty of room for a 20% fade. I would look to short on green/red action. It may also be a decent buy if it shows strength but considering I got burned buying it Friday I will not play it that way. Friday it was shortable at IB.

INO – after PIPE financing news Thursday it fell 50% (from the insane price of $3.40 it closed at Wednesday from $0.80 on Tuesday). That move was overdone and it bounced Friday. I am not looking to play this as its next moves will be less predictable.

Reader Watchlists

I am perfectly happy to give my thoughts on stocks my readers mention. Keep in mind that I give only my  opinion and what I write is never personalized investment advice and should not be taken as advice to buy or sell particular securities. Preston mentioned a few in a comment on my last post. He said:

I know your not a fan of these but here is my watchlist.
I like AEM after Cramer pumped them and they had decent news, short above 58 and cover under 55.
MCD, long under 55 and sell over 58.
I also like ACH for a long term play on CHina but would like to see a pullback first, I bought this first around 12 and sold at 16 and of course it flew after that.

AEM & MCD just do not interest me. Their charts are too choppy and I have no insight into their fundamentals or why people would want to buy or sell them. ACH has a great chart and might be a buy over $30, but its average daily range (ADR) is very low. I am not a swing-trader so it doesn’t interest me.

One point I will make over and over again is that stock trading is like baseball with no called strikes. If you choose to not make a trade you cannot lose. So the best traders only trade when they have a clear edge. Stock trading is one of the few ‘jobs’ when you can show up drunk for a week and do nothing and you won’t get fired or suffer any harm (as long as you avoid trading). If you ask me my opinion on 99% of stocks I will say that I have no opinion. I can make plenty of money only if I have an edge in trading a few stocks on any given day.

Disclosure: No positions. I have a disclosure policy.

July 31st trading recap

As I wrote last night, I have some house-guests, so this is a short post.

Here are today’s trades, with little comment:

  • +    BOT    200    GGC    false    Stock    16.410    USD    SMART    09:31:38        1.00
    +    SLD    200    GGC    false    Stock    17.610    USD    SMART    09:41:51        1.00

GGC was negative in pre-market. I bought it just a minute after open after it jumped green. I had incredible patience for me, selling 10 minutes later after it twice failed to take out big offers at $18.10. This turned out just like I thought it would.

  • +    BOT    800    IBNK    false    Stock (NMS)    1.829    USD    BATS    10:01:47        4.00
    +    SLD    800    IBNK    false    Stock (NMS)    1.760    USD    SMART    10:16:04        4.00

Pre-leader long on breakout to new high. Small trade. My winning ratio on this type of trade is poor and I net about breakeven overall.

  • BOT    200    GERN    false    Stock (NMS)    8.8397    USD    SMART    11:12:34        1.00
    +    SLD    200    GERN    false    Stock (NMS)    8.970    USD    ARCA    11:13:50        1.00

Bought on red/green (a bit slow). Halfway decent trade.

  • BOT    500    INO    false    Stock    2.01    USD    BATS    11:21:02    BookTrader    2.50
    +    SLD    500    INO    false    Stock    2.040    USD    ISLAND    11:22:18    BookTrader    2.50

Pre-leader long. If I had given it more room to run I wold’ve had an easy 30 cent profit.

  • BOT    500    VHC    false    Stock    4.38    USD    SMART    14:26:39        2.50
    +    SLD    500    VHC    false    Stock    3.898    USD    AMEX    14:27:50        2.50

Dumb play on VHC, I had the right idea but I was slow to sell and buy. I am generally bad at quick-moving plays like this that can go either way.

  • +    SLD    3,000    PAL    false    Stock    3.110    USD    SMART    14:25:52        15.00
    +    SLD    3,000    PAL    false    Stock    3.088    USD    ISLAND    14:28:29        15.00
    +    BOT    3,000    PAL    false    Stock    3.020    USD    ARCA    14:59:31        15.00
    +    BOT    3,000    PAL    false    Stock    3.030    USD    SMART    14:59:48        15.00

PAL was what I call a fat-fingered short. I don’t mind going reasonably large in these; risk/reward is good although this strategy leads to occasional big losses. In this case it was CNBC pumping it. 40 cents (18%) vertical moves in 30 seconds are in general good shorts unless there is real news. It didn’t turn out as I predicted but I still had a halfway-decent profit.

For your reference, here are my year-to-date profits for the above-mentioned trading strategies:

Fat-fingered shorts:

Total Profit $2,889.99
Avg Profit % 0.55%
Wtd Avg Profit 0.86%

Pre-leaders longs:

Total Profit $67.89
Avg Profit % 0.66%
Wtd Avg Profit 0.26%

Today I netted +$348.39.

Disclosure: No positions.

More evidence on how most traders lose money

CXO Advisory Group did a study using data from Collective2, a website that lets users auto-trade off of public trading systems submitted by ‘expert traders’.

Here is some of what they found:

the typical stock trading system available on Collective2 substantially underperformed the broad U.S. stock market over the past few months. Over the past 30 days, only about 18% of these trading systems matched or beat the S&P 500 Index.

Note further the following from the Collective2 disclaimer: “All performance claims on this web site must be regarded as hypothetical. …Commissions, fees, or trading system leases/subscription fees are not included in any of the results you see here. There is often a vast difference between hypothetical results and real-life trading results achievable in a real brokerage account, and real-life results are almost always vastly worse than hypothetical results.”

If this Collective2 data is representative of the short-term trading of expert individual investors, then short-term trading generally does not work well.

Check out the full article for more details and charts.

Disclosure: I read the CXOAG blog and you should too.

Watch list for July 31 & daily recap

Sorry this won’t be the most organized or prettiest post: I’ve got house-guests coming tomorrow and need to clean up! First up, review of today’s trades.

INO – Arggh!!!!!!

It was shortable at Sogo. It was shortable at Sogo. Arrgh. I really should’ve shorted this, even after the 15% gap down. But no, I was too busy losing money on this next stock:

OHB – TimAlert trade

Readers of my twitter feed know I got back in that this morning. I should never have even gotten in considering it held up pretty well yesterday and closed green. My entry sucked ($2.87) and I made the mistake of not covering when Tim Sykes covered. If you trade illiquid stocks and you know a bunch of people are going to buy / cover, it pays to buy before they do. So that was two mistakes. My third mistake was tripling my original position on the spike caused by Sykes’ followers covering but getting bad fills. If I could have gotten filled at $3.50 or even $3.40 that would’ve been okay. Instead I got filled at $3.17 and $3.30. I later covered when it spiked back to $3.50; that was the only thing I did right in this trade. Total damage: -$1552. Annoying, but for someone with a big account like me, not huge. The loss didn’t even wipe out all of this week’s profits.

GGC

I saw this alerted in the IU stock chat. But, because I am horrible at buying breakouts, I did not buy at $8 or $9, I bought at $13. I scalped it twice quickly with 200 shares each time and made a respectable $121.34. Things I did right: kept my position small and actually tried buying a breakout that has run well previously.

DDRX – TimAlert Trade

TimAlert comes out: “Bought 300 DDRX On Probable Breakout At $24.83” I of course bought quickly, partly to get a few cents from slow TimAlert subscribers. Below are my actual trades copied from IB.

+ BOT 961 DDRX false Stock (SCM) 24.905 USD ARCA 14:44:04 4.80
+ BOT 6,000 DDRX false Stock (SCM) 24.950 USD SMART 14:44:07 30.00
+ SLD 5,468 DDRX false Stock (SCM) 25.033 USD ARCA 14:47:20 27.34
+ SLD 893 DDRX false Stock (SCM) 25.000 USD BATS 14:48:20 4.46
+ SLD 200 DDRX false Stock (SCM) 25.110 USD ISLAND 14:48:41 1.00

I held onto 400 shares long because I agreed with Tim’s thesis.

TimAlert comes out: “Sold 300 DDRX at $24.98, Looks Toppy”

+ SLD 400 DDRX false Stock (SCM) 24.958 USD ARCA 15:32:39 2.00
+ SLD 500 DDRX false Stock (SCM) 24.802 USD ARCA 15:34:45 BookTrader 2.50

I quickly sold (learning my lesson from OHB this morning) and went short a tiny bit. Holy crap that thing tanked quick.

+ BOT 500 DDRX false Stock (SCM) 24.680 USD ISLAND 15:35:01 BookTrader 2.50

Wait, it tanked over $2 and I covered my short for a lousy 14 cents??!!? Oyvey. I’m not gonna cry about this though. It is a garden variety mistake and the tank was not caused purely by Tim Alert subscribers; there was some big stop loss sellers. As it fell more I was incredulous that it would fall so quickly. I thought to play for a bounce but did not want to get burned.  So I placed a low-ball bid. Most of my 1000 share order was filled.

+ BOT 900 DDRX false Stock (SCM) 22.662 USD BATS 15:38:29 4.50

The bounce looked weak so I decided to take profits around $23

+ SLD 900 DDRX false Stock (SCM) 22.977 USD ARCA 15:46:31 4.50

Overall on DDRX, +$838.98 today. It helped to make up for my horrid $1552 loss on OHB. Some halfway decent trading on that and GGC helped keep this day from really sucking.

Watchlist

The only thing really interesting on my watchlist is GGC. They had financing news that looks like it will keep them out of bankruptcy. This is a low-volume stock; it was up 112% today on only 2.6 million shares. Back in March the stock was up 200% in one day, and the following day the stock went from $32 to a high of $50 and then closed at $42. Oh, and this company is heavily shorted. So I think this may be a great buy tomorrow. We’ll see if I actually play it. I would wait to see how it looks in the few minutes after the open before buying.

Wait — this was supposed to be a hurried post. Oops.

Disclosure: No positions. I am a customer of Tim Sykes and InvestorsUnderground and an affiliate of both of them. I have a disclosure policy that gives details on those relationships.