links for 2010-07-28

links for 2010-07-26

Watchlist 7/26/2010 – Boring list to follow up on a boring week.

No trades and nothing worth watching towards the end of last week. Boredom looks to continue this week. I managed to get my ass stuck in ARNA by working on the go all day Friday. Dumb. Hopefully it was just a lame Friday afternoon short squeeze but the stock has gone from looking pretty weak to now looking strong. Something a part time trader should NEVER do is get into a position when you can’t pay it full attention. That is normally one of my primary trading rules. Hmm guess I broke that one eh? Fucking stupid… Futures were up when I went to bed but now this morning they are fading, annoying. It would be nice if the market would get decisive and go one way and stick to it instead of this chop. Well here are five stocks barely worth watching.

Full list from Yahoo Finance


I’ve said enough already, now I just need to decide to hold until their drug is proven worthless and continue to get squeezed or just cut and run. Still a short in my opinion, but not right now based on the chart. SHORT


Shady looking biotech, lame little spike, but I see no reason for it. SHORT


A few shares out there to short, I’m tempted to take them into Friday’s spike. Good chance this stock ends up right back at a $1. SHORT


Ton’s of positive news, big revenue gains, analyst upgrades etc. Somewhat “real” company so I will probably just watch, but curious to see where this big spike goes. SHORT


I’ve been watching this for a week and would really like to short. But everyday I hesitate and the borrows dry up at IB. They are back again today, I just need to get decisive and enter a position. This stock will almost certainly tank 30% soon. Just a bummer its right at a dollar, I would like to see it run more before shorting. SHORT

Why stock chat is like hard liquor, good in moderation, TERRIBLE in excess. $$

First off lets pre qualify by stating I have no problem with booze, hell anyone who knows me will tell you I enjoy a beer quite frequently but in trying to find an analogy for my distaste of stock chat, hard liquor was the most accurate method I could find. I kept wanting to make it analogous to hard drugs, but while stock chat is annoying beyond belief and seldom useful, it is not nearly as insidious as hard drugs. Stock chat has a much more slow and gradual infiltration method that soon brings most unwitting users to their knees and penniless in the gutter. While booze doesn’t have near the completion percentage of creating personal worthlessness that stock chat does I still think its a decent comparison for the sake of a blog post and a chapter in my forth coming ebook.

That’s right I’m writing a “Part Time Pennystocking” ebook. It will probably suck and will probably be late and delayed many times, but it will happen nevertheless. Since there is a very good chance I will be presenting at Tim Sykes Pennystocking conference in Vegas in mid November I have roughly sixteen weeks to completion in order to have it ready for presentation at the conference. Ideally I will write a chapter a week ending up with roughly 10 chapters leaving me five or six weeks of editing.

This is week one and I begin with part one of the chapter “Ignore Everybody”, obviously starting with ignoring stock chat as the first section of the chapter. I may link back to this article frequently since it is the first post and details my plan. So hence the sampling of history and the outline of my “howto” on writing an ebook. Ideally I hope to accomplish two goals, one produce a shippable product, no matter how crappy and two, learn a process to further hone titles going forward, and maybe in twenty years produce something worthwhile. Since I like the idea of “open sourcing” a project like this, I will use my blog to write the book. Each chapter will be published on the blog weekly and open to comments. My thoughts are to use my target audiences comments to refine the work into the editing stage, hopefully using a mild crowd sourcing model to improve the quality of the book. While my blog is pretty low profile I do get occasional comments, and who knows maybe by creating some real content my readership will see value and increase.

Ok enough background and setup, back to the topic at hand.

While the purveyors of stock chat will constantly tell you how incredibly useful their sometimes free and most often pay service is, refuse to believe them. They are like the bottle staring at you from across the room, saying “We won’t get that drunk and hook up with some nasty skank again tonight.” While the skank and the stock chat moderator do serve purposes the lingering effects of their talents are seldom desirable. While I don’t doubt individuals have found the love of their life in the middle of a bender and gone on to live a happy and fruitful life, far more often nothing becomes of the affair but regrets. While you may find a decent alert or stock pick in chat from time to time. You will be constantly assaulted with randomness and useless information. One of my most hated parts of stock information is randomness. There will be a chapter dedicated specifically to the explosion of worthless information that creates nothing but noise and non tradable confusion.

Another disadvantage to stock chat is the “drinking buddies” scenario. This is by far the most evil and diabolical scenario presented to the foolish stock trader who wanders into a chat room. I will be the first to admit this has burned me far more then any other setup in a room. While with a little discipline a trader can ignore most random and useless ideas from individual participants, it is very difficult not to get sucked into ideas that many chat participants all start to gang up on. As in my younger days of drinking with several buddies, it is amazing how group hysteria can make normally rational young men think that standing on the roof of a moving car is a good idea! Or any other countless stupid ideas that “seemed good at the time.” with a belly full of booze and a bunch of yayhoos at your side.

So in summary, I recommend avoiding stock chat altogether except for two situations. Number one, using it simply as a tool to locate breakouts and or breakdowns. Since it is very difficult to watch all stocks with either a HOD list or screening tools, stock chat can be very effective in assisting the momentum trader in locating tickers. Investors Underground is the very best room for this, while it does not suit my style of trading if you are looking for pure momentum setups it is a solid tool for using hundreds of eyes to help you trade. Situation two is using chat to gain information about why stocks are doing what they are doing, of course this needs to be used with an enormous grain of salt, since 99% of participants in chat are fucking idiots. But the remaining 1% and the moderators are usually useful in locating news or the rational behind rapid moves. Since most moderators participate in multiple chatrooms, they can scale out into finding real info quickly. Of course this information may or may not be useful and or tradeable, but the room can find it faster then you can in most situations.

My weekly deadline for this project will be Sunday evening, while I think I got the gist across I also feel this post was greatly rushed. I will do better next time, due to an ENORMOUS project at my day job this week I was unable to get started writing until Sunday evening. And even then I was rushed due to other commitments. This will also be the last time excuses are offered up. But hey I showed the fuck up and got it done at least, what did YOU do towards your book or other creative project this week?

Please post any criticism or ideas for this post, and or suggestions for future posts. I will continue with part two of the “Ignore Everybody” chapter in the next two days. Then post part three over the weekend thereby wrapping up the entire chapter for week one.