Short Selling Opportunities in this Crazy market.
I have noticed some trends since the beginning of the year which have been somewhat strange.
I'd like to go back to the late 98'-early 99' period in which shorting these pump and dumps gave short sellers immediate rewards coming from sharply falling stock prices after the pump. Junk like SKYM, PRFM, MZON, etc. were exposed and the stocks dived big time. They didn't linger around and have another pop like many junk stocks this year, a lot of them just died and were lifetime shorts where the stock would wither for many months.
Nowadays, those similar pump and dump stocks are going down, but not as sharply, and they linger around at high prices and sometimes stab the shorts with unexpected spikes coming from either MM-manipulated run-ups and/or panic short covering. Examples include XING, PLUG, ENBC, ELSI, etc..
Now the market has been this strange way since the start of the year and have made the short game a bit tougher, but it seems to prove that the wave of speculative high tech buyers has spread to the 4th and 5th tier POS names we're targeting in wireless, internet, B2B, and Biotech.
I don't know how long this phenomena will last, but I do know that this is the MOST speculative period I have ever traded in. Its scary at times how complete turds just seem to explode higher on spontaneous combustion. What I think this will lead to is MASSIVE losses for longs sometime later this year, when reality begins to sink in and the risk just becomes outrageously high for the rewards.
The IPO of turds like BTBC signal that absolute junk has been able to fly even when they will go bankrupt in a few short years. These are strange times indeed, but I always believe that time is on the short sellers' side, patience is the key. |
