The Shorting of Frauds, Overhyped and Bankrupt Stocks Journal

When to short is simple - when the price action AND other factors start acting bearishly. That is all you need to focus on.

The common mistake is to short when other factors are bearish but the price action isn't - or, worse, when the price action is bullish. That is how you get screwed.

Think about it - when do the biggest, fastest price declines happen? In bear markets, or in crashes after parabolic blowoff tops. They don't happen in grinding bull markets or during the blowoff process. So it is insanity to position yourself short in those 2 conditions.
 
UNXL lol, what a fucking scam. CEO and COO resigned days ago and they announced 'producting delays' today, scam artists
 
The biggest catalyst for a stock to go up a lot is not earnings or good news right now but rather is to be added to the RegSho List. Anything that shows up there goes up quite a lot
 
QCOR: blowoff top!
AAMC: looks like pump and dump. Be very cautious though, I am out at the moment. Volume is very low and manipulated.
 
PLUG: it has to do equity raises to stay in business. Just did one after its stock ran up, of course. I figure it'll keep doing well this quarter, and then after this quarter is over reality should set in again. Will look at shorting it at that time. Figure it'll see 2.5 again at minimum once the hoopla dies down.

TGT: been writing about this on the Trader P/L thread. Interesting thing here is that it doesn't seem to be alone. Got into it because of the breach, but a whole slew of retailers seem to be having major problems, it looks like because of competition from online. BBY just got hammered today, JCP is getting it in the neck, again, and so on.
This one is, I think, being supported by value folks who look at the history of dividend increases and think "sound company". Which it no doubt is, but its sales have been flat for the past two years, and now this breach hits them right where it hurts: in their red card promotion. It's going to be a while before they can get a lot of people to sign up for their red cards again, and the problem with that is that folks who sign up for one have been found to spend 50% at Target more than folks who don't have one.
I'd say its not as implausible as it sounds that that dividend might be in danger. Even if it isn't, I doubt they'll be raising it again anytime soon. Once that realization sets in, value folks may start leaving this behind.
Anyway, I sold 63.5/64.5 calls, and figure I'll play "whack-a-mole" with this by repeating that every time it bounces to within decent shouting distance of that level. 63.5 is the level it most recently sold off at, and should make decent resistance for the foreseeable future.
62 may be another good resistance level, as it bounced up to very close to that on the open yesterday morning before diving for the rest of the day.
 
Quote from Chuck Krug:

QCOR: blowoff top!
AAMC: looks like pump and dump. Be very cautious though, I am out at the moment. Volume is very low and manipulated.
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AAMC is just plain weird. Even if we assume the "reason" for the high valuation is because of a thin float, surely the insiders would be smart enough to sell out now at these crazy prices?
 
Quote from m22au:

AAMC is just plain weird. Even if we assume the "reason" for the high valuation is because of a thin float, surely the insiders would be smart enough to sell out now at these crazy prices?
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Its hard to reason about pretty much anything in this current market. To be short and alive you got to play small and take profits fast (and losses fast too), anytime you hold for a bigger decline it seems that you get killed. I didn't follow this rule this week and had some unnecessary losses

its a crazy bull market
 
Hey Daal, do you ever play a lot of these small/micro cap runners that are essentially pump and dumps? It seems like there are a lot of guys who swing them short.

Symbols like
PLUG
RNN
CNAT
OXBT
TNXP
VISN
 
Quote from Daal:

Its hard to reason about pretty much anything in this current market. To be short and alive you got to play small and take profits fast (and losses fast too), anytime you hold for a bigger decline it seems that you get killed. I didn't follow this rule this week and had some unnecessary losses

its a crazy bull market
More...

Yes, I guess the simple explanation ("it's a bull market") is probably sufficient.

But the thing with AAMC is that insiders could dump their stock, and buy RESI instead. But that would make too much sense and logic!

Why bother buying RESI which only went up over 100% last year when you could buy AAMC that goes up 1000% last year!

Disclosure: not short AAMC, because if it could go to 1200, then what's stopping it from going to 2400 or 4800?
 
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