Tim Fundamentals Part Deux  - DVD #4 NOTES

Tim Fundamentals Part Deux -Disc 1

 

Overview

 

• Goal is to find the most volatile & liquid penny stocks
• Put them all into one main watchlist for trading
• Have multiple backup watchlists just in case
• Plan out trades the night before to be better prepared
• Prefer stocks with daily volume of 200,000 +, but not too liquid like 50 million (too many traders creates fakeouts)
• $2-$7/share stocks are my sweet spot, but it varies
• Stocks are often hard to borrow, great barrier to entry for most/can get frustrating
• Nerve racking to buy scam stock breakouts but I do
• Find stocks breaking out/pumped up due to hype & manipulation
• Stocks with the most fickle traders/suckers are easiest to predict
• Goal is to predict moves of $0.50-$1/share or 15-30% for stocks under $2
• Remain open to buying, but I prefer to short
• Many daily hot penny stocks rarely do the setups offer high odds of making $0.50-$1 /share
• Overtrading is a problem, trading can be addictive
• No such thing as undertrading patience is good
• Not cutting losses quickly when wrong is the #1 problem people have
• Rarely will I take more than 1-2 positions at a time, I watch every trade to "get a feel for the price action"
• My account is usually 100% liquid cash, waiting, reseaching, stalking my prey
• Never use more than 50% of assets per play, usually 20-30%, which is aggressive
• No matter how sure you are, NEVER go all in
• Rarely will I hold a position for more than a few days, predictability drops price action doesn't play out EXACTLY as I expected
• Yes, you read that correctly, I think I can predict stock price action
• Based on thousands of examples & a decade of study
• I even cut gains short if a stock acts incorrectly

 

What Is A Pump and Dump

 

• SEC.gov says "Pump and Dump" schemes, also known as "hype and ump manipulation," involve the touting of a company's stock (typically microcap companies) through false and misleading statements to the marketplace. After pumping the stock, fraudsters make huge profits by selling their cheap stock into the market.
• Wikipedia says Pump and sump is a form of microcap stock fraud that involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme dump their overvalued shares, the price falls and investors lose their money.
• Tim says: Pump and dumps are difficult to tell if fraud/illegal activity is involved but who cares. The penny stock or its shareholders use various tactics to push (pump) their stock price higher, allowing them to sell at inflated prices (dump). People can learn from past examples & increase their odds of profiting from future ones by buying pumps & short selling dumps. 

 

Trading Pump And Dumps

 

• Excessive price swings both up & down, sometimes excessive trading volumes
• Finding available shares to short is tough
• Pumps can go higher than anyone expects, dumps can go lower than anyone expects
• Stock pumpers are out to lure in as many suckers as possible not make it easy for traders to profit
• Ride pumps higher as they breakout, shorts get squeezed
• ALWAYS LOOK FOR SHORT SHARES (ALFSS)

 

1999-2008 Pump and Dumps

 

• Al outlined & detailed in my book/instructional DVDs
• Vary based on manipulation method, market environment, sector type
• Reading pumps & trading them gets easier over time
• No way to be perfect, each pump is a bit different, focus on catalysts to better adapt to future ones

 

Summer 2009 Pump and Dumps

 

• Busiest summer in the last few years as a result of the bull market, the promoters are back!
• Manipulation methods and the stocks change but the pump and dump pattern is remarkably steady
• As always, it's frustrating finding shares to short
• Unfortunately, most were under $1, making these plays even tougher
• It was the summer of love for stock promoters
• Shorting worked well, but the market was so hot, buying the pumps was more successful
• Incredibly similar chart patterns, very little deviation
• Impressive volumes and share availability for shorting, ahhhh I miss the summer of stock promoter love

 

Fall 2009 Pump & Dumps

 

·         It's been a busy few months, don't get spoiled

·         My short selling strategy ironically does best in bull markets (more pumps & dumps to short)

·         The SEC has gotten quicker at halting these stocks

·         I missed some, but nailed some too story of my life

 

Current/Winter '09 Pumps & Dumps

 

• All are potential shorts if I can find shares to short!
• Some have more upside, but I cannot buy as 50%+ collapses happen at any time
• All have paid someone or manipulated their stock higher to sell shares
• Look back at these stocks 1 year from now, you'll laugh out loud (most if not all will be down 90%+)          

 

 

DVD #4: Tim Fundamentals Part Deux Disc 2 – Notes

 

Tim Fundamentals Part Deux

Disc 2

 

Ghosts Of Pump & Dumps Past

 

• Amazing the patterns haven't changed one bit
• Still possible to ride up and short down
• Look at the charts in my "old" DVDs, exactly the same
• Momma says they were "my magic charts"....it's not magic, it's just manipulation and it's predictable

 

Every Penny Stock Investor's Dream

 

• Exponential gains within days and weeks
• these do happen, but like 50-1 odds in horse racing, they are long-shots for suckers
• Great for buying breakouts AFTER big news-based run-ups due to predictable short squeezes
• Short sellers can't believe their eyes, think "it's impossible for it to keep going up"(wrong)

 

Dream Examples Help Lesser Stocks

 

• Everyone's looking for the next "multi-bagger"
• The dreaming/excitement creates irrational exuberance in the worst of the worst
• Great for shorting into excessive spikes
• Medium-term uptrends possible, but usually can't old gains for very long

 

Tim understands how certain news can affect the overall market and uses that information when he sees it as a catalyst

 

Oldie But Goodie Runner

 

• Traders love trading them over and over again, remembering past spikes & setups
• On my watchlist often as the presence of fickle day traders make them somewhat predictable
• Choppy price action & lack of blatant manipulation make them NOT ideal
• Always keep on one of your watchlists, but not main

 

How To Find Stocks To Trade

 

• Spend anywhere from 1 to 5 hours/night researching
• If you're lazy/busy, use nightly watchlists from TIMalerts.com & StocksToTrade.com
• Depends on how many great setups there are
• Depends on how much effort you want to put in
• Two kinds of research plans: abbreviated or detailed
• Abbreviated catches most & it's a great time saver
• Detailed research catches ALL good plays
• The question is will you feel guilty missing a perfect play or do you want a life?
• New tools & automation are coming soon....
• www.mailerstocks.com & www.stockstotrade.com
• Nothing beats manual research/analysis
• I don't always find every ideal setup, take pride if you find one I don't....it won't happen often
• Yesterday's price action is the best indicator of today
• Stocks remain on my watchlists for weeks or until they become too boring
• I need to do a better job keeping track, lately, there's been too many stocks in play every day
• Bear markets have fewer plays but shorting is easier

 

Abbreviated Scan

 

• Should take no more than 1 hour nightly
• I used to do this when I was rich & lazy
• Know about most hot penny stocks, but miss some
• Ideal for busy/lazy people
• Visit sites listed below to find ideal setups
• Compile list of tickers & do basic research
• Write down key technical breakout & breakdown points
• Be prepared to act if and when those prices are triggered the next day
• Don't get too excited as shorting in the morning is risky
• Don't expect to trade the next day
• You shouldn't WANT to trade, it's time consuming & nerve racking
• Let the ideal setups come to you, patience is key
• Abbreviated Scan: Compiling Tickers

 

Yahoo! Finance % Gainers

 

• Find stocks that fit my specs: $1-10/share, 50,000+ in volume, up as much % as possible
• No takeovers, mergers or upcoming FDA news plays
• No analysis before I get my whole list of tickers set

 

StockPromoters.com Largest $ and % Gainers

 

• Register for free, but don't use your main email, it's owned by a promoter!
• Sort promoted stocks by largest $ gainers, largest % gainers and largest $ volume
• The more cash and shares paid to promtoers, the harder the stocks will fall (and rise to0)
•  

Learn which promoters are better than others

 

Clearstation Tag & Bag % Gainers sorted by price, lowest to highest, graphs in bulk

 

• Go to tag & bag then technical events, then % gainers for all indexes
• I like sorting by lowest price first, then click graphs in bulk to look for
• Stockreads.com most promoted stocks
• Look at charts of all the most promoted stocks
• Calendar option on right side is also useful to connect price moves with promoters
• Chatroom takes you to StockHideout.com, Beacon Equity promotions
• Beacon is the Godfather of promoters, but they do so many deals, most aren't worth shorting

 

Abbreviated Scan: Researching Tickers

 

• Check news on Yahoo! Finance & message boards
• Determine Reason for runup
• Fundamental runups = potential buy (with the proper chart pattern & price action)
• Hype/Manipulation runups = potential short (with the proper chart pattern & price action)
• TheLion.com Wall Street Pit
• Handy ALO (all-in-one) message board search on upper right corner
• I hate trading stocks without clear reasons for a runup ... upcoming news is unpredictable
• Just get basic reasons why the stock is in play

 

DVD #4: Tim Fundamentals Part Deux Disc 3

Tim Fundamentals Part Deux Disc 3

 

Spent the first part of the DVD going over his watchlist exactly how he does it

He gets pretty in depth in the research after he finds all the stocks that chart something he likes

Key to Remember: Look and note support and resistance levels when doing research so you know what to look for during the day

Detailed Scan

• This can take anywhere from 1 to 4 hours nightly if there are enough interesting plays
• I CANNOT stop researching when I find red flags galore
• Detailed research is educational not just about $
• Starts the same way as the abbreviated scan, just add more research & websites
• Goal is to never miss an ideal trade, time matters not
• Do this and you'll feel a sense of duty to profit from the pump & dumps with which you are blessed
• Be careful, sometimes the amount of research is overwhelming
• Pinksheets.com for news and SEC Filings
• Yahoo Finance! key statistics for company stats like marketcap
• TheHotPennyStocks.com message boards & promoter websites for promotion details & reactions
• Visit the company's website & dig through old news, partners looking for red flags

 

Michael Goode Presenting

 

• People get excited about trading
• Most traders trade too much 
• People get emotional a lot of the time
• You need to keep your emotions in check
• To do this just stick to your trading plan
• You want to know when you have a good probability of success and only trade those

 

Investors Live – Nathan Michaud.

• uses high day low day list
• High Low Ticker on Speed Trader
• it takes 3 to 4 months to start remembering the impact of former runners
• take your profits
• cut your losses
• different times show different things
• sometimes a stock will spike, even out and then fade
• other times it will spike flatline and then spike again

T. Bohen – Stock to trade Header

 

• Uses Tim's watchlist as a homework assignment
• Doesn't open it until he does his and compares them
• To avoid over-trading he just sets alerts and does other things until the alerts go off
• Cut losses quickly
• do not look for random trades
• trades about 3,000-4,000 shares in the $3-5 range

 

 

DVD #4: Tim Fundamentals Part Deux Disc 4

Tim Fundamentals Part Deux

Pop Quiz #1

 

·         Is stock promotion legal?

o    Who cares! Profit 100% legally by piggybacking/short selling into the sketchy promotions

·         What websites are best to track stock promoters?

o    Mailerstocks.com, StockPromoters.com, StockReads.com

·         What are good sites for daily watchlists?

o    StockToTrade.com, TimAlerts.com, ReaperTrades.com, IvestorsLive.com

·         How much can you make off PennyStocking?

o    It varies, but the key to success is no expectations

 

Pop Quiz #2

 

·         So many penny stocks, which ones to focus on?

o    I focus on the biggest daily $ and % gainers, ideally trading over 200,000+ shares per day

·         What % of assets should be risked per play?

o    As a veteran I use 20-30%, that's far too aggressive for most, especially beginners. 2-4% of assets maybe

·         When to cut losses?

o    I usually cut losses at 3-5%, but risk pain on pump & dumps due to lack of available shares to short

·         When to take profits?

o    I can be impatient, but I usually take 10-20% profits

 

Pop Quiz #3