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Watchlist for February 1st: Almost nothing interesting

ISCO – This is my only stock on watch. It is up on some fluffy PRs, from $0.90 to $1.35 in four days and up from $0.50 in a month. I’m short-biased.

isco

Disclosure: No positions in any stock mentioned. This blog has a terms of use and you can find all my disclaimers and disclosures there as well; my full terms of use is incorporated by reference into this post.

My Review of Tim Sykes’ Learn Level 2 DVD

After pre-ordering it two months ago and receiving it two weeks ago, I finally finished watching Tim Sykes’ Learn Level 2 DVD and here is my review.

Conclusion: This is a pretty decent trading DVD but there is not nearly enough video of Level 2 in action. As someone who has plenty of experience trading and trading using Tim Sykes’ strategies, I did not want another DVD of Sykes explaining how he trades. I wanted a DVD of him showing how he uses level 2. So most of the approximately 5 hours of video was needless repetition for me. For someone looking to learn Sykes’ strategy I would recommend Pennystocking Part Deux or TimFundamentals Part Deux (I own both). I could only recommend this to someone who has no experience with level 2 and little understanding of technical analysis who may have purchased TimFundamentals or TimFundamentals Part Deux (the two of Sykes’ DVDs that delve least into technical analysis).

Pros

  • Sykes explains important facets of technical analysis and level 2. He shows lots of level 2 data of interesting OTC BB stocks.
  • Presentation style is good and he is easy to understand. He describes the basics of Level 2 so even someone without any experience or knowledge of it can understand him and learn.

Cons

  • There is very little in the DVD that a follower of Sykes with a year of experience watching level 2 would not already know.
  • Video quality is only adequate. The first 40 minutes or so of disc 1 were shot with Tim in front of a green screen and there is some flicker in the green screen. After that disc 1 is screencast and the quality is good. The sound quality is the opposite: the first 40 minutes are very good and after that it is only okay. See the descriptions of the discs below for details on which parts of which discs are screencast and which are done in front of a green screen.
  • After watching a bunch of Tim’s DVDs, I just want him to be a bit more professional. It is okay to look unkempt and have random crazy analogies and to sing the Cotton “Fabric of our Lives” song, but please don’t have a 20-second conversation with your girlfriend in the middle of the video!
  • I would have preferred a lot less in the way of stock charts and more actual live level 2, especially of Nasdaq (not OTC BB) stocks around key inflection points. Most of the stocks Tim showed on level 2 were boring. I know it is tough to find stocks that are most interesting, but I would have preferred waiting another month for the DVD if that had meant I would have gotten to see more interesting and useful level 2.
  • The stocks that Tim shows on level 2 are either OTC stocks (for which level 2 is quite different than listed stocks) or boring stocks that were not moving much. I would have much preferred to see some interesting Nasdaq stocks.

Disc 1: Intro to Tim Sykes and then definitions and level 2 basics.
Disc 2: Looking at a few different stocks on live level 2 but also a lot of intra-day and multi-day charts. This was mostly done in front of a green screen.
Disc 3: Some random stuff about trading stocks, some level 2, Tim trading IFNY (an OTC BB stock) and showing its level 2. Half of this disc came from one of Tim’s weekly Livestock shows. Unfortunately Tim spends some time answering random viewer questions (not related to Level 2) during that segment. 75% of this DVD is green greened, 25% is screencast with Sykes in a little video box.
Disc 4: The first part of this disc does not have level 2 info, just stock charts, with Tim talking about fairly basic technical analysis and technical trading strategies he uses. I like this part, but he should have waited until the right time to record level 2 video to support his various patterns like the “cliff dive.” I do like that this disc is screen captured.

A Gratuitous Level 2 Screencast (recorded by me with little commentary)

Disclosure: No positions in any stock mentioned. I am an affiliate of Tim Sykes and earn a commission if anyone purchases his products through my links. I purchased the Level 2 DVD from Tim Sykes and I own many of Sykes’ DVDs and have certain business relationships with him. See my terms of use for full details about my business relationships with Timothy Sykes.  This blog has a terms of use and you can find all my disclaimers and disclosures there as well; my full terms of use is incorporated by reference into this post.

Q&A: Saturday morning mailbag

Questions asked include:

1. How do you set hotkeys in IB TWS?
2. How to configure charts in IB TWS for indicators other than volume?
3. How can you configure IB charts to show news?
4. Really long question about level 2.
5. What will I do when I am rich and my account is too large to trade penny stocks any more?
6. What do I do with the money I don’t keep in cash in my brokerage accounts?
7. What are the best investments for traders?

I probably do not completely any of the questions. Part of the reason is I will not do basic legwork for you, my beloved readers. I am happy to help, but please put some effort into trying to learn things on your own.

Disclosure: No positions in any stock mentioned. This blog has a terms of use and you can find all my disclaimers and disclosures there as well; my full terms of use is incorporated by reference into this post.

Former SEC attorney convicted in pump & dump scheme

I recommend reading the Justice Department’s press release for full details. Below are some choice quotes.

Phillip Windom Offill Jr., 51, of Dallas, was indicted on March 12, 2009, and today was found guilty of one count of conspiracy to commit registration violations, securities fraud and nine counts of wire fraud.

“It is a sad day when a former U.S. Securities and Exchange Commission (SEC) attorney uses what he learned in the government to later defraud the investing public,” said Assistant Attorney General Lanny A. Breuer of the Criminal Division.   “As this case shows, individuals who illegally manipulate our securities markets to line their own pockets will be brought to justice.”

“As a former SEC lawyer, Mr. Offill knew the law – and he intentionally broke it and tried to hide his crimes,” said U.S. Attorney Neil H. MacBride of the Eastern District of Virginia. “He and his co-conspirators made millions while innocent investors were left with stock in worthless companies. We are committed to pursuing these cases aggressively to protect the public and the integrity of the securities market.”

Unfortunately, I am not familiar with any of the companies involved in the case: “Emerging Holdings Inc.; MassClick Inc.; China Score Inc.; Auction Mills Inc.; Custom-Designed Compressor Systems Inc.; Ecogate Inc.; Media International Concepts Inc.; Vanquish Productions Inc.; and AVL Global Inc.”

In connection with Emerging Holdings, MassClick and China Score, evidence at trial showed that Offill knowingly participated in a conspiracy known as a “pump-and-dump” scheme to manipulate the price of these companies’ securities. Co-conspirators falsely manipulated the price and volume of some of the companies’ stock by making materially false and misleading statements in press releases and in spam e-mails to tens of millions of e-mail addresses throughout the United States in an effort to create artificial demand for the three companies’ stock. After fraudulently “pumping” the market price and demand for the companies’ stock, co-conspirators “dumped” shares by selling them for large profits to the general investing public in the over-the-counter market through listings on Pink Sheets, an inter-dealer electronic quotation and trading system.

The good thing about this case is that Offill was remanded into custody and he

faces a maximum penalty of five years in prison on the conspiracy charge and 20 years in prison for each charged count of wire fraud. He will also be subject to up to $15 million in forfeiture.

Disclosure: No positions in any stock mentioned. This blog has a terms of use and you can find all my disclaimers and disclosures there as well; my full terms of use is incorporated by reference into this post.

Nothing on watch

Nothing much interesting to me. JYHW and AENY are still on short watch as pump & dumps. Considering the poor overall market environment I am not in the mood to by breakouts.

Disclosure: No positions in any stock mentioned. This blog has a terms of use and you can find all my disclaimers and disclosures there as well; my full terms of use is incorporated by reference into this post.

Trade recap for January 28th

Daily profit: ($181.85)

Trades at IB:
+    BOT    10,000    PEIX    false    Stock    2.080    USD    BATS    09:37:35        50.00
SLD    2,500    JYHW    false    Stock    1.2560    USD    ARCAEDGE    10:44:21        12.50
+    SLD    2,500    JYHW    false    Stock    1.243    USD    SMART    10:46:34        12.50
+    BOT    1,500    JYHW    false    Stock    1.110    USD    ARCAEDGE    11:46:54        7.50
BOT    2,000    JYHW    false    Stock    1.1200    USD    SMART    11:47:34        10.00
+    BOT    1,500    JYHW    false    Stock    1.115    USD    ARCAEDGE    11:47:56        7.50

Disclosure: Long 4500 NXWI. No positions in any other stock mentioned. This blog has a terms of use and you can find all my disclaimers and disclosures there as well; my full terms of use is incorporated by reference into this post.

Watchlist for January 28th

CNLG – Huge 80% move on fluffy press release, but this is only a $7m company. It could go either way.

cnlg

ROL – Nice chart. Could be a nice long on green or the $20.00 break.

rol

AENY – Pump & dump on perpetual short watch. This has been on the Reg SHO list for the last week though, so getting a borrow to short it is nearly impossible.

aeny

Disclosure: No positions in any stock mentioned. This blog has a terms of use and you can find all my disclaimers and disclosures there as well; my full terms of use is incorporated by reference into this post.

Trade recap for January 27th

Nothing at all today except for a late-day short I’m holding overnight.

Daily profit: ($24.00)

+    BOT    100    AAPL    false    Stock    207.130    USD    ISLAND    15:26:56        1.00
SLD    100    AAPL    false    Stock    206.91    USD    SMART    15:27:04        1.00
+    SLD    10,000    PEIX    false    Stock    2.010    USD    DRCTEDGE    15:33:18        50.00

Disclosure: Short 10,000 PEIX. No positions in any other stock mentioned. This blog has a terms of use and you can find all my disclaimers and disclosures there as well; my full terms of use is incorporated by reference into this post.

Q&A: Wednesday reader mailbag

If you have a question drop me an email and I’ll try to answer it in my next Q&A post. In the video I answer the following three questions:

1) What settings do I use on my charts in Interactive Brokers Traders Workstation.
2) How does one trade without level 1 real-time data? Is level 2 necessary? How do I see a large bid and decide to cover a short because of that?
3) Who are my favorite traders and what are my favorite trading books?

Disclosure: No positions in any stock mentioned. This blog has a terms of use and you can find all my disclaimers and disclosures there as well; my full terms of use is incorporated by reference into this post.