PART 2: Principles & Practices of Stock Trading

[Hilander]

THESE TOPIC's ARE ALWAYS A WORK IN PROGRESS ...
Stop back by later for a fresh look and see what'll be posted in the future.

[Hilander]

Now that you've learned all this ...
YOU SHOULD KNOW WHERE TO LOOK FOR THE MINE FIELDS, IF NOT GO BACK AND RE-READ WHERE YOU FELL ASLEEP.



The World Enquirer Says

YOU MUST UNDERSTAND THAT THE MARKET IS LEGALLY CROOKED AND LEGALLY MANIPULATED........
investors must take care to be in longer term growth stocks which show promise of fundamental improvement.....check our commentary....stock index futures trading and options expiration along with the use of rumor mills are the  biggest tools used by Wall Street insiders to legally screw the American investor ...... and there is more including naked shorting.  The SEC talks but does nothing but talk...........
http://www.worldenquirer.com/

[Hilander]

Credits
It 's due to a handfull of people who encouraged me to keep a journal. Around 1997, I remember a psychologist telling me that I needed to keep a record of all important facts about life because sooner or later my memories would fade. Its gonna be that way with all of us sooner or later. So, there's one more reason for creating this document. This is a compilation of what I believe to be important facts to know about learning how to trade stocks.

Basically, my job in all this was to organize the data into a format that would be fun & easy to learn from. These excerpts are notes from my trading journal. It will be updated from time to time as I find new & interesting data to record.

The following posts came from when I was Trading Strategic Resources(SGCR) with Ad1. I called us The Lone Ranger & Tonto because for months we were the only 2 on the board. Ad1 would ask me questions and I would give him my viewpoint. Those posts became my First Draft of this research I'm posting for you to read now.

Even though I'd been collecting data for years, I didn't start sharing my opinions publicly till late 2006.

The better blogs starts with Post#55:
#55   Ad1, Your last post reminded me of my first trade.    
Hilander   2/6/2007 11:03:57 PM
http://investorshub.advfn.com/boards/read_msg.asp?message_id=16841837

Ending at around Post#154 - IS THE DOW REALLY AT ALL TIME HIGHS?
Hilander   2/18/2007 8:29:40 PM
http://investorshub.advfn.com/boards/board.asp?board_id=7993&NextStart=153

Topped Out at Post#176 - #176   Hilander I must be honest with you.   ad1   3/16/2007 12:15:35 AM
http://investorshub.advfn.com/boards/board.asp?board_id=7993&NextStart=153


WHY’D I WRITE THIS?
November 11, 2006
Notes from Hilander's Trading Journal

Many of us have reached the age where our friends are talking about the legacy they wanna leave behind. After reflecting on this idea for several months, I decided to do something while I’m alive. After all, life is for the living. My moto is, let the dead take care of the dead. Most people are uncomfortable with the topic of death. So, I've decided to post this data to see if it can help others? If so, I'm glad. After all we're members of I-Cob together. And so it is I share parts of my jounal with you now.

Cheers,
Hilander

PS:
• If it turns out this study material is useful, please give me your feedback so I know how to proceed with future postings.
• IMO, eventually everyone should create their own trading journal to learn from.

[Hilander]

28 Day's to Life Home Study Guide

Is this for you?
I'll be starting another thread on Human Behavior & Psychology just to see how we fit into the scheme of things.

PAPER TRADING
If you think you wanna learn to trade stocks, there's no better way to learn than paper trading. I recommend everyone trade for at least 6 months prior to investing real money. It should be mandatory for newbie’s to try out their newly acquired skills. I did it, everyone I know did until they were satisfied with their confidence level. Give it a try and have some fun. I had a friend in high school, he and his father traded together. Give it a try, you might find it more fun than playing golf.

https://secure3.marketwatch.com/registration/signin/portfolios.aspx?siteID=mktw

[Hilander]

COMFORT ZONE
11-27-06
LESSON #1

If you decide to embark on this field of learning, you’re gonna learn a tremendous amount about yourself psychologically. You will learn your comfort zone and you will learn when to say NO. What did I know about stock trading? Nothing. But it was when Michael Milken got caught with his hand in the cooky jar selling junk bonds that perked my interest. That’s when I wanted to know how he did it and why he did it and how he made so much money. So, I read his book which was written while he spent the better part of a decade in the big house thinking about all those little old ladies he ripped off. I thought about how he abused and misused the system for his financial gains. I figured if he could do it so could I. I just had to figure out how to do it with integrity.

In high school I played basketball and ran track. I knew the basic rules of what was fair play and what wasn't. As described above here was a guy who got greedy, got caught with his hand in the cooky jar and spent a fifth of his life in jail. Is that the way you wanna end up? For those of us who have integrity issues we yell out, NOT ME! OK,  I asked myself a bunch of questions and wondered where do I go from here. I have a chosen professional field that I was trained in. Do I keep that going until I reach obsolence or do I find something else that will sustain me till I die?

In 1990, what I was left with was the answer to this 1 question:
"What is it I can do at 85 that will still give me the mental stimulation to get out of bed and still be excited about work”?

That's why I became interested in trading stocks because I know I can do this as long as my mind is sharp. I also know that I must be very careful to pick stable companies so I do not put my hard earned capital at risk. Remember, study hard and chose wisely. What appears to be a safe bet may not be a safe bet at all.

Some people say stick with what you know and only venture outside your comfort zone when you want to learn a new hobby.

[Hilander]

2008 - 2012 FORCAST:
Why the Big Money in Gold Shares Still Lies Ahead
By David Galland
Managing Director, Casey Research, LLC.
Managing Editor, Doug Casey’s International speculator

You’d be correct in suspecting that the easy money in gold shares has already been made. It has. But it would be financial folly of the highest order to assume that it’s too late to make the big money. The big money is still on the table.

The reason has to do with something that’s simple to understand but that not one investor in a thousand has heard about: the exploration cycle.

ABC's of Exploration

In a manufacturing business, an entrepreneur buys raw materials from suppliers and then assembles the materials into cars, shoes, candlesticks or some other final product. But in the extractive industries, such as oil or gold, the first step isn’t to buy raw materials but to find them. And it’s not easy, because nature has hidden them under the earth’s crust, perhaps in a remote or even dangerous corner of the world.

Understanding the timing of the exploration process is critical to understanding why the big gold profits are still ahead, and why it is so important to get positioned in the quality companies today, while there is still time to do so.

The process, greatly abbreviated here, begins when a team of geologists -- perhaps working for a big mining company, but more often than not, for a fleet-footed junior Canadian exploration company -- come up with a geological concept. (“Geological concept,” if you’re not familiar with the term, is geology talk for “educated guess.”)

Gathering up picks and shovels, the team spends days, weeks or even months poking through the brush looking for rocks that would suggest their idea has some merit. If they find anything promising, they’ll collect samples and send them to an assay lab for a mineral analysis.

If the assay lab had nothing else to work on, our geologists might get a report back in days. But in fact, assay labs aren’t nearly as numerous as, say, donut shops. And due to the surge in exploration in recent years (a topic I’ll return to momentarily), there is a large and growing backlog at the world’s few assay labs. So explorers must wait 2 to 4 months or even longer to learn whether their rocks carry traces of a valuable deposit or are just… rocks.

Assuming the assay results are encouraging, the explorers move on to the next phase, trying to verify that an ore deposit is waiting beneath the surface. Of course, they can’t see under the dirt and rock, so they do the next best thing, which is to drill deep holes and dig out samples.

Before you can drill, however, you must get a permit to disturb the ground, a process that, depending on where your property is located, can take two months to a year – or in some ecologically sensitive areas, forever.

Because our hypothetical exploration team is on the ball, we’ll assume they get the permit. Which takes them to the next hurdle: while the shortage of assay labs is acute, the shortage of drills and experienced crews to run them is far, far worse. How much worse? If you want to drill a project in 2007 and don’t already have a drill lined up, the odds of finding one this late in the game are somewhere between slim and none.

Okay, but our team is lucky – or well connected – and so is able to lock up a drill. Now begins the long and expensive process of punching enough holes in the ground to find out what’s really there and to map out the boundaries and orientation of the deposit. The drilling may proceed just a few holes at a time, so that what’s learned from each hole can be used to point where the next ones should be drilled. Of course, at each step, the sample the drill pulls out of the ground must be sent to an assay lab to wait its turn for analysis… and the clock ticks on.

In time, the geologists are able to assemble the assay data into a reliable geological model. Around this time, the focus shifts to verifying that the minerals they’ve found are present in sufficient quantities to warrant the expense of clawing them out of the ground, that expense being influenced by a multitude of factors, not the least of which is how far below surface the deposit is located and in what kinds of rock.

But let’s say it appears to be an economically large deposit – say, a million or more ounces of gold. Now the exploration company has to confirm the metallurgy, a branch of science of great complexity. On ascertaining that you will be able to economically (there’s that word again) separate the shiny yellow stuff from the dirt and rock, you move onto the next square.

Oh, No… NGOs!

Throughout this process, the smarter explorers invest considerable time and energy in softening up the local population and politicians. Get it right, and you might only have to wait a year or two for the environmental and construction permits needed to build your mine. Get it wrong, and you could be looking at delays of a decade or more.

Throughout modern times, getting the locals to accept a mine has been a stiff challenge, whether dealing with citizens who hate the idea of a mine in their backyard or politicians who see the project as an opportunity for nationalistic grandstanding or outright extortion. Today, however, there’s a new army of nay-sayers: dozens of well-funded Non-Governmental Organizations (NGOs), whose officers earn the entirety of their paychecks by trying to stop all mining in all countries.

Make no mistake, these NGOs, some of which are playpens for committed Luddites, are well financed, well organized and increasingly well acquainted with the many ways a proposed mine can be tied up legally or by stirring up the local or national population.

If by this time a mining entrepreneur hasn’t decided to change careers and go into something less challenging, such as trying to build pipelines in Iraq, and he’s able to battle through the NGOs, he still needs to build the mine – which means securing a lot of power and water. And because mine output is not light and easy to ship, all manner of additional infrastructure is needed. One intrepid would-be Yukon miner we’re acquainted with will first have to spend $2 billion to build, among other things, a road and power line more than 60 miles long. The work, scheduled to begin soon, is expected to take until 2012 to complete.

This sort of build-out is difficult enough in a friendly environment, but most of the world’s remaining large mineral deposits are located in places such as the Congo, the high Andes or, literally, Outer Mongolia.

Of course, all of this is voraciously time consuming, and none of it is cheap.

While you may think I’m overtelling the story, I’m actually short-handing the description of the process. The reality is much, much more challenging. It is no wonder, therefore, that only about 1 in 3,000 geological targets ultimately makes it into production. And even for the rare success, years pass between the original geological idea and the first mine shipment.

Okay, Can We Get to the Making-Me-Money Part?

Between the years 1980 and 2000, gold and pretty much all other commodities suffered a grim bear market. Gold dropped from a high of $850 in January 1980 all the way down to $252 in July of 1999, after which it traded pretty much sideways until the current bull market started to emerge in Q102.
At $850 per ounce, crawling over the figurative fields of ground glass to get a gold mine into production was worth the risk and hassle. Decidedly not the case at $252 per ounce.Not surprisingly, with dark clouds cloaking the mining landscape for 20 years, the mining industry went into hibernation. Drill rigs were left to rust, universities stopped offering programs in economic geology, and former mining promoters reinvented themselves as dot-com impresarios.

Importantly, and understandably, funding for the junior Canadian exploration companies that are now leading the charge into the remote corners of the world to search for new deposits was virtually non-existent.

Exploration’s recent dark age is over now, but it had a profound effect that hasn’t yet played out. And it’s an effect that you can profit from – and profit soon.

In Chart A, Ron Parratt, President of AuEx Ventures and one of the world’s most successful exploration geologists, shows worldwide exploration expenditures between 1990 and the present (the only period for which data is readily available).

As you can see, other than the mid-1990s’ upswing -- caused by a series of fluke discoveries, one of which turned out to be a massive fraud – the default mode for this period was for exploration expenditures to bump along near the bottom of the possible range. (Even in the worst of times, expenditures don’t go to zero, because the major mining companies want to replace what they sell, so that they won’t sell themselves out of business.)

It doesn’t take going through the whole Aristotelian logic thing to figure out that a drastic reduction in exploration spending, meaning fewer geologists out in the field looking for new deposits, will, in time, result in fewer and fewer new deposits being found.

The fact of the matter is that unless you have the luxury of exploring an area contiguous with an existing mine – low-hanging fruit for which the exploration/production cycle could be as quick as 2 to 4 years – the time required to move a good geological idea into production is typically 6 to 10 years.

[Hilander]

2007 FORCAST:
 


Gold Bugs Ready to Rock
By Simon Constable
TheStreet.com Staff Reporter
12/28/2006 12:50 PM EST
Click here for more stories by Simon Constable
http://find.thestreet.com/cgi-bin/texis/author/?au=A1103339

Gold prices look set to rocket in 2007 with a sickly greenback and geopolitical tensions topping the list of driving factors, according to a broad cross-section of bullion market watchers polled by TheStreet.com.
The whole group, which includes miners, a portfolio manager and a coin dealer, sees the possibility of spot prices breaking through the 2006 high of around $725 an ounce, reached in May. Gold for immediate delivery sold for around $630 in late December, having risen from $520 in January.
What will be interesting to see is how well the group fares when compared with those surveyed for the annual London Bullion Market Association forecast, expected in mid-January.
Last year, most of those canvassed by the LBMA, a group dominated by bankers and consultants, woefully underestimated the extent of the rally, with an average forecast of $534.94. Instead, through Dec. 28, spot gold had a mean price of around $600 an ounce.
TheStreet.com asked a sample of experts how readers might best position their gold investments during the coming year based on their forecast. Each will be periodically revisited to see how the different scenarios are playing out.

Well-known gold bug James Turk sees an average price of $725 next year with a low of $600 and a top of at least $1,000. "The key here is that not that gold is going up, it's that the dollar is going down," says Turk, who explains that the budget and trade deficits will weigh heavily on the greenback.

Look for a first-quarter spike to $850, he predicts, but he acknowledged that he expected a similar high this year that failed to materialize.
He recommends investors hold at least 10% of their assets in physical metal. Products like the bullion ETFs, streetTracks Gold Shares (GLD - news - Cramer's Take) and iShares Comex Gold Trust (IAU - news - Cramer's Take), and mining stocks, aren't really the same as owning gold, but rather are "trading vehicles," he says.
Turk's company, GoldMoney, holds bullion for investors in segregated accounts in a London vault. He owns physical bullion, but neither ETF.
Frank Holmes, the chief investment officer at U.S. Global Investors and team leader managing the U.S. Global Investors World Precious Minerals Fund, sees a high of $720 to $800 next year for gold, but not before a first-half correction as the dollar stabilizes.
With low inflation, the dollar is yielding a good real rate of return, says Holmes. He sees price support for bullion at around $580 to $600, with an average price of $680 through the year.
Longer term, he says, diversification by central banks -- China and Russia in particular -- will provide solid demand, and strong jewelry buying should return as consumers become accustomed to current prices.
Holmes recommends buying in-the-money long-term options on Newmont Mining (NEM - news - Cramer's Take) if the price pulls back. He warns investors to avoid the out-of-the-money LEAPS, saying they're too risky.
His other picks include miners Northern Orion (NTO - news - Cramer's Take), Meridian Gold (MDG - news - Cramer's Take) and Randgold Resources (GOLD - news - Cramer's Take).
"Look for companies that have high return on capital," he says.
At the end of September, the World Precious Minerals Fund held stock of Northern Orion, Meridian and Rangold. A spokesman for the company wouldn't comment on the Newmont LEAPS.
Jeff Christian, managing director at New York-based specialty consulting firm CPM Group, says many investors see a world full of economic uncertainty, which will help boost gold prices to a peak of $750 during the first quarter.
Christian was the only person polled by TheStreet.com who also took part in the 2006 LBMA survey. Last year, he was the most bearish of the lot, with an average price forecast of $479. For 2007 he's clearly more bullish, at least for a while.
"There is a lot of concern that the dollar will just fall and fall and fall," says Christian. But "over the year that view will shift," with investors growing more sanguine, which should lower the risk premium for gold.
After a spring spike he sees prices for gold drifting down to $500 by year-end, with a full-year average of $600.
Clients should be "long commodities and [gold mining] equities. Eventually, though, investors will want to rotate out of out of commodities while staying in the equities, adds Christian.

He favors AngloGold Ashanti (AU - news - Cramer's Take), which he owns, and Barrick Gold (ABX - news - Cramer's Take), which he does not.
Jamie Sokalsky, CFO of Barrick Gold, sees the price going through $730, but didn't want to specify further, although he's clearly bullish. In addition to a declining dollar, he sees the political "powder keg" in the Middle East and the added uncertainty of a nuclear North Korea supporting prices.
"If the U.S. pulls out [of Iraq] there could be some additional conflict, and any uncertainty resulting from that could be positive for the gold price," says Sokalsky.
Pierre Lassonde, chairman of the World Gold Council and outgoing president of Newmont Mining, predicts a range of $600 to $800 for gold next year, with an average of around $675.
"I see the dollar continuing to go down against a basket of currencies, including the euro," says Lassonde, who adds that "80% of the value of gold is the dollar."
Other bullish factors include declining mine production and rising investment demand, says Lassonde. He notes the Gold Shares ETF now holds more than 450 tons of bullion, and he's looking for continued investor diversification into the yellow metal.
At the time of publication, Lassonde was long Newmont stock.

Neal Ryan, director of economic research at New Orleans-based coin dealer Blanchard, sees a high of about $825 to $850 an ounce for gold, a floor of $615 and an average price of $725.
The rally will be driven by Middle Eastern problems, as well as burgeoning inflation and a weak dollar. He recommends holding physical bullion rather than stocks.
"With stocks you have a proxy," for gold, says Ryan. "When you look at a mining stock vs. physical [metal] , you have to look at a variety of other factors," such as costs, management and operational risk.
He advocates precious-metals holdings of no more than 5% for most investors.
Blanchard, which is currently long physical gold, trades bullion for its own account as well as for its clients. ??P.S. A Message from Jim Cramer?Good news! You can get my new bestseller, Jim Cramer's Mad Money: Watch TV, Get Rich, absolutely free when you subscribe now to my premium investing service, Action Alerts PLUS. It's a great deal!

[Hilander]

BUDDY SAY'S "YOUR GONNA NEED A STRONG CUPPA COFFEE TO GET THROUGH ALL THIS STUFF!"

WEBSITES-for Research
Items for Research:
http://quote.barchart.com/texpert.asp?sym=UCOI
http://bigcharts.marketwatch.com/default.asp?siteid=&avatar=seen&dist=ctbc
http://www.blogcharm.com/marketbarometer/55966/Newton%E2%80%99s+Laws+of+Stock+Market+Trading.html Newton’s Laws of Stock Market Trading
http://www.clifdroke.com/
http://ww1.dowtheoryletters.com/dtlol.nsf
http://www.investorshub.com/boards/default.asp
http://www.321gold.com/
http://www.golddrivers.com/
http://www.gold-eagle.com/research/channdx.html
http://www.gold-eagle.com/research/hommelndx.html
http://www.gold-eagle.com/research/hommelbergndx.html
http://kitco.com/
http://stockcharts.com/h-sc/ui
http://www.marketwatch.com/default.aspx?siteid=mktw&avatar=seen
http://www.moneychanger.com/
http://www.elliottwave.com/features/default.aspx?cat=pmp http://www.elliottwave.com/features/default.aspx?cat=pmp Bob Prechter 
http://www.phimatrix.com/  (unveiling the beauty & power of phi)
http://www.pinksheets.com/pink/marketactivity/reg_sho_list.jsp (Shell Companies)
http://www.silverinfo.net/
http://www.silver-investor.com/archives/index.htmlDavid Morgan&Charles Savoie
http://www.silverstrategies.com/defaultNS.aspx
http://www.speculative-investor.com/new/article.html
http://www.stockhouse.com/quote/index.asp
http://members.vectorvest.com/newstockanalysis/
http://www.voy.com/65437/
http://finance.yahoo.com/
http://www.weissratings.com/products_stocks.asp (Look for: Guide to Common Stocks)
         Take the Investor Profile Quiz to Test Your Risk Tolerance
http://www.wikipedia.org/ (Dictionary) 

GLOSSARY OF STOCK MARKET TERMS
More Research:
http://www.investopedia.com/
http://www.marketwatch.com/pf/started/GettingStarted_Glossary.asp?siteID=mktw
http://www.cftc.gov/opa/glossary/opaglossary_a.htm
http://money.cnn.com/services/glossary/a.html
http://www.matisse.net/files/glossary.html
http://www.zacks.com/help/glossary/
   
SEC WEBSITES
1). http://www.archive.org/web/web.php (type in www.uncn.net)

2). This filing: '8-K' -- # 0001262463-06-000190 @ 061229-213511 --
http://www.secinfo.com/$/SEC/Filing.asp?D=16gRg.v5h&CIK=1110737

3). Filer: Unico Inc/AZ --
http://www.secinfo.com/$/SEC/Registrant.asp?CIK=1110737

4). SEC Info is the most sophisticated SEC EDGAR database service on the Web, with billions of unique links added to the SEC filings.
An SEC/CSA filing notification service of http://www.secinfo.com

5). To cease new-filing notifications to this mailbox, click here...
http://www.secinfo.com/$/EMail.asp?U=accounts@e-tes.ca&F=16gRg.v5h&T=1
Do not reply. For help, go to http://www.secinfo.com/$/Help.asp

6). http://www.cftc.gov/  (check before you trade)

7). http://www.secform4.com/ (Check Insider Trading-Shares Bought/Sold)
     http://www.secform4.com/insider-trading/1110737.htm

INVESTORS-HUB WEBSITES
AND Even More Research:
http://66.201.236.134/export/level2.jsp?symbol=DKGR Level II Quotes
http://bigcharts.marketwatch.com/
http://tinyurl.com/create.php (Directions: Copy chart properties to the tinyurl website, use the tiny url it gives you. This chart will update automatically)
http://www.thesubway.com/companydata.asp?qm_page=21405 Shows Trade Time&Size
http://www.thesubway.com/companydata.asp?qm_page=79667 Level II Quotes

[Hilander]

LEVEL II:
A look at the Market Makers:
http://66.201.236.134/export/level2.jsp?symbol=acko
http://www.thesubway.com/companydata.asp?qm_page=1256

44 MOST USED MARKET MAKERS

MPID             Name                  Location                 Telephone                 State

ABLE        Natexis Bleichroeder Inc. DOMESTIC 800-221-3365 NY
AGIS        Aegis Capital Corp. NASDAQ OTC DESK 212-813-2006 NY
ARCA        Archipelago Trading Services, Inc. OTCBB TRADING 312-442-7700
ARCX         Archipelago Stock Exchange 312-960-1318
AUTO         Automated Trading Desk Financial Services, LLC DESK843-789-2080
BAOM      Banc of America Securities LLC SAN FRANCISCO, CA 415-627-2900
BEST       Bear, Stearns & Co. Inc. OTCBB PINK SHEETS 212-272-4975 NY
BMIC       Biltmore International Corporation   732-287-6535
BNCH         Benchmark Company, LLC OTCBB 212-312-6700 NY
BRGE         Newbridge Securities Corp. FT LAUDERDALE, FL 954-229-9818 FL
CLYP         Carlin Equities, LLC NY
CRTC         Capital Group LLC STAMFORD, CT 203-569-6494 CT
DOMS      Domestic Securities, Inc. EDISON, NJ – OTCBB 732-661-0300 NJ
EDGX       Direct Edge ECN LLC JERSEY CITY, NJ 201-356-1714
ETRD         Trade Capital Markets LLC OTCBB   312-431-1268
FRAN            Wm. V. Frankel & Co., Incorporated NEW YORK, NY 800-631-3091
FSWC         First Southwest Company DALLAS, TX 214-953-4100 TX
GARC       ICAP Corporates LLC 800-937-0087
GNLN           Gunnallen Financial, Inc. TAMPA,  FL 813-600-1420 FL
GSCO           Goldman, Sachs & Co. OTCBB 212-357-4402 NY-Jap-Europe-Arbitrage
HDSN          Hudson Securities, Inc. JERSEY CITY, NJ 800-624-0050 NJ
HILL             Hill Thompson Magid and Co., Inc. NASDAQ TRADING 800-631-3083
INTL             INTL Trading, Inc. OTCBB 800-327-5703  Orlando, Fl
JEFF             Jefferies & Company, Inc. NASDAQ 972-701-3100 Stamford, Ct
JPTC          J.P. Turner & Company, L.L.C. OTCBB 404-479-8321|
MAXM          Maxim Group LLC OTCBB 212-895-3874 NY
MERI                 Merriman Curhan Ford & Co.OTCBB 646-292-1409 NY, San Fran.
NACI          North American Clearing, Inc. 407-774-6281
NITE            Knight Equity Markets, L.P. BULLETIN BOARD 800-232-3684 NY
OPCO         Oppenheimer & Co., Inc. NASDAQ-OTCBB 212-422-7813 NY
PERT          Pershing LLC|BULLETIN BOARD 201-413-2700 NJ
SACM         Sterne Agee Capital Markets, Inc. BOCA RATON, FL|800-930-3536 FL
SALI                Sterne, Agee&Leach, Inc. NASDAQ-OTCBB 800-239-2408 Alabama
SEAB            Seaboard Securities, Inc. NASDAQ-OTCBB 973-514-1699 FL
SBSH          Citigroup Global Markets Inc. NASDAQ 800-223-7743 Foreign-Deritives
SSGI                Seton Securities Group, Inc. NASDAQ 732-739-3800
TASL                Tradition Asiel Securities Inc. NASDAQ 212-791-4770 NY
TDCM         TD Waterhouse Capital Markets, Inc. OTCBB 800-500-3905
UBSS         UBS Securities LLC OTCBB-PINKSHEETS 203-719-8710
VERT          Vertical Trading Group, LLC NEW YORK, NY 212-918-1202 NY
VIEW         Viewtrade Securities, Inc. BOCA RATON, FL 561-368-6061 FL
VFIN                 Vfinance Investments, Inc OTCBB-PINK SHEETS 800-487-0577
VNDM               Vandham Securities Corp. WOODCLIFF LAKE, NJ 201- 782-3310 NJ
WDCO         Wilson-Davis & Co., Inc. NEW YORK 800-290-6875 NY
WEED          Weeden & Co.L.P. NASDAQ/OTCBB TRADING 203-861-7650
WMIN          Westminster Securities Corporation NASDAQ 800-445-6749

47 Page Listing
47 Page Listing of 3,040 Brokerage Houses See:
http://www.nasdaqtrader.com/dynamic/SymDir/mrktsym.txt
*MPID: Market Producer Identification Symbol    Date: 8-18-06; 9-15-06


MARKET MAKER SIGNALS
http://investorshub.advfn.com/boards/board.asp?board_id=9223

Penny traders believe that Market Makers (MM) will "signal" moves in advance buy using small amounts of buys or sells as "signals". The "signals" are such a small amount of shares (worth no more than 5 or 10 dollars) that no trader would have paid a commission that costs more than the amount of shares bought. The "signals" are from one MM to another.

100 - I need shares.
200 - I need shares badly,but do not take the stock down.
300 - Take the price down so I can load shares
400 - Keep trading it sideways.
500 - Gap the stock. This gap can be either up or down, depending on the direction of the 500 signal.
911 - Pending News

I always wondered about those small trades until one day I found this tidbit of information.

These are signals used between market makers:
100 - I need shares.
200 - I need shares badly,but do not take the stock down.
300 - Take the price down so I can load shares
400 - Keep trading it sideways.
500 - Gap the stock.
This gap can be either up or down, depending on the direction of the signal.
911 - Pending News
I'm not sure what 600, 700, 800 or 900 shares traded means. Maybe someone else knows?

The MM'ers will "signal" moves in advance buy using small amounts of buys or sells. The "signals" are such a small amount of shares, worth no more than 5 to 10 dollars. Most of the time the commission costs more than the "signal". It seems so rediculous to have such a small number of shares traded. They must be "signals" going back and forth between brokers who need to buy or sell. They're doing nothing more than trading marbles with our money. Those dirty dogs ... I hope they are stopped soooon! ... October 15th?

Anyone know what 600 - 700 - 800 & 900  "Signals" mean?

Verrry interesting ...

 

Penny Stock Market Makers Who Are the Players in this Game
By Bill Panetta

Let Me Start off by saying this: Level 2 Does not have the same effect like it did 5 years ago except for OTCBB Stocks & Pink Sheet Stocks. What Do I mean By This? NASDAQ is all chart plays, level 2 has no meaning as it once did for NASDAQ Stocks, and too many games can be played now on level 2. Simply put if you don't know how to read the charts you will get killed on NASDAQ Stocks.

With all the changes on Level 2 Traders have been forced to learn TA, You could had a made a killing with level 2 before 2001 with out TA; I have witnesses that have proven this.
And when I make this comment I am talking about regular trading hours, after hour's different story. Bottom Line Level 2 does not have the same effect on NASDAQ Stocks that it did 5 years ago because of the New Super Soes Trading System being implemented in 2001 and along with 1 cent spreads, it was the worst thing NASDAQ ever did for traders IMO. The Traders from 5 yrs ago know what I am talking about.
Let's talk about the 2 exchanges where Level 2 has not changed and having level 2 is really important to your trading. I am talking about The OTCBB & PINKSHEET Markets.
If you learn how to read into Level 2 on the OTCBB & PINK SHEETS it will really enhance your trading. Let's break down the Market Markets.
There are 4 categories of Market Makers let's start by talking about the first one...

Full Story:
http://investorshub.advfn.com/boards/board.asp?board_id=9260


Re: Welcome to the new Unico Discussion Board
« Reply #6015 on: Today at 12:08:52 PM »

P2,
This post is for you.

Tecch,
Thanks for the post. These articles and videos helped me to better understand this complicated mess the SEC is mixed up in.

I spoke to a Licensed CPA last night, he's never heard of any of this stuff. He accused me of being a conspiracy nut case!
It appears no one cares unless it has impacted your life directly, like the RTC scam of the 80's.

ORVIL,
How can people take the ostrich approach and just keep burying their head in the sand?


Tecch10000 Re: Welcome to the new Unico Discussion Board
« Reply #5952 on: November 06, 2007, 07:37:13 PM »

There’s a form of the securities fraud known as naked short selling that is becoming very popular and lucrative to the market makers that practice it. It is known as “Cellar boxing” and it has to do with the fact that the NASD and the SEC had to arbitrarily set a minimum level at which a stock can trade. This level was set at $.0001 or one-one hundredth of a penny. This level is appropriately referred to as “the cellar”. This $.0001 level can be used as a "backstop" for all kinds of market maker and naked short selling manipulations.

“Cellar boxing” has been one of the security frauds du jour since 1999 when the market went to a “decimalization” basis. In the pre-decimalization days the minimum market spread for most stocks was set at 1/8th of a dollar and the market makers were guaranteed a healthy “spread”. Since decimalization came into effect, those one-eighth of a dollar spreads now are often only a penny as you can see in Microsoft’s quote throughout the day. Where did the unscrupulous MMs go to make up for all of this lost income? They headed "south" to the OTCBB and Pink Sheets where the protective effects from naked short selling like Rule 10-a, and NASD Rules 3350, 3360, and 3370 are nonexistent.

The unique aspect of needing an arbitrary “cellar” level is that the lowest possible incremental gain above this cellar level represents a 100% spread available to MMs making a market in these securities. When compared to the typical spread in Microsoft of perhaps four-tenths of 1%, this is pretty tempting territory. In fact, when the market is no bid to $.0001 offer there is theoretically an infinite spread.

In order to participate in “cellar boxing”, the MMs first need to pummel the price per share down to these levels. The lower they can force the share price, the larger are the percentage spreads to feed off of. This is easily done via garden variety naked short selling. In fact if the MM is large enough and has enough visibility of buy and sell orders as well as order flow, he can simultaneously be acting as the conduit for the sale of nonexistent shares through Canadian co-conspiring broker/dealers and their associates with his right hand at the same time that his left hand is naked short selling into every buy order that appears through its own proprietary accounts. The key here is to be a dominant enough of a MM to have visibility of these buy orders. This is referred to as "broker/dealer internalization" or naked short selling via "desking" which refers to the market makers trading desk. While the right hand is busy flooding the victim company's market with "counterfeit" shares that can be sold at any instant in time the left hand is nullifying any upward pressure in share price by neutralizing the demand for the securities. The net effect becomes no demonstrable demand for shares and a huge oversupply of shares which induces a downward spiral in share price.

In fact, until the "beefed up" version of Rule 3370 (Affirmative determination in writing of "borrowability" by settlement date) becomes effective, U.S. MMs have been "legally" processing naked short sale orders out of Canada and other offshore locations even though they and the clearing firms involved knew by history that these shares were in no way going to be delivered. The question that then begs to be asked is how "the system" can allow these obviously bogus sell orders to clear and settle. To find the answer to this one need look no further than to Addendum "C" to the Rules and Regulations of the NSCC subdivision of the DTCC. This gaping loophole allows the DTCC, which is basically the 11,000 b/ds and banks that we refer to as "Wall Street”, to borrow shares from those investors naive enough to hold these shares in "street name" at their brokerage firm. This amounts to about 95% of us. Theoretically, this “borrow” was designed to allow trades to clear and settle that involved LEGITIMATE 1 OR 2 DAY delays in delivery. This "borrow" is done unbeknownst to the investor that purchased the shares in question and amounts to probably the largest "conflict of interest" known to mankind. The question becomes would these investors knowingly loan, without compensation, their shares to those whose intent is to bankrupt their investment if they knew that the loan process was the key mechanism needed for the naked short sellers to effect their goal? Another question that arises is should the investor's b/d who just earned a commission and therefore owes its client a fiduciary duty of care, be acting as the intermediary in this loan process keeping in mind that this b/d is being paid the cash value of the shares being loaned as a means of collateralizing the loan, all unbeknownst to his client the purchaser.

An interesting phenomenon occurs at these "cellar" levels. Since NASD Rule 3370 allows MMs to legally naked short sell into markets characterized by a plethora of buy orders at a time when few sell orders are in existence, a MM can theoretically "legally" sit at the $.0001 level and sell nonexistent shares all day long because at no bid and $.0001 ask there is obviously a huge disparity between buy orders and sell orders. What tends to happen is that every time the share price tries to get off of the cellar floor and onto the first step of the stairway at $.0001 there is somebody there to step on the hands of the victim corporation's market.

Once a given micro cap corporation is “boxed in the cellar” it doesn’t have a whole lot of options to climb its way out of the cellar. One obvious option would be for it to reverse split its way out of the cellar but history has shown that these are counter-productive as the market capitalization typically gets hammered and the post split share price level starts heading back to its original pre-split level.

Another option would be to organize a sustained buying effort and muscle your way out of the cellar but typically there will, as if by magic, be a naked short sell order there to meet each and every buy order. Sometimes the shareholder base can muster up enough buying pressure to put the market at $.0001 bid and $.0002 offer for a limited amount of time. Later the market makers will typically pound the $.0001 bids with a blitzkrieg of selling to wipe out all of the bids and the market goes back to no bid and $.0001 offer. When the weak-kneed shareholders see this a few times they usually make up their mind to sell their shares the next time that a $.0001 bid appears and to get the heck out of Dodge. This phenomenon is referred to as “shaking the tree” for weak-kneed investors and it is very effective.

At times the market will go to $.0001 bid and $.0003 offer. This sets up a juicy 200% spread for the MMs and tends to dissuade any buyers from reaching up to the "lofty" level of $.0003. If a $.0002 bid should appear from a MM not "playing ball" with the unscrupulous MMs, it will be hit so quickly that Level 2 will never reveal the existence of the bid. The $.0001 bid at $.0003 offer market sets up a "stalemate" wherein market makers can leisurely enjoy the huge spreads while the victim company slowly dilutes itself to death by paying the monthly bills with "real" shares sold at incredibly low levels. Since all of these development-stage corporations have to pay their monthly bills, time becomes on the side of the naked short sellers.

At times it almost seems that the unscrupulous market makers are not actively trying to kill the victim corporation but instead want to milk the situation for as long of a period of time as possible and let the corporation die a slow death by dilution. The reality is that it is extremely easy to strip away 99% of a victim company’s share price or market cap and to keep the victim corporation “boxed“ in the cellar, but it really is difficult to kill a corporation especially after management and the shareholder base have figured out the game that is being played at their expense.

As the weeks and months go by the market makers make a fortune with these huge percentage spreads but the net aggregate naked short positions become astronomical from all of this activity. This leads to some apprehension amongst the co-conspiring MMs. The predicament they find themselves in is that they can’t even stop naked short selling into every buy order that appears because if they do the share price will gap and this will put tremendous pressures on net capital reserves for the MMs and margin maintenance requirements for the co-conspiring hedge funds and others operating out of the more than 13,000 naked short selling margin accounts set up in Canada. And of course covering the naked short position is out of the question since they can’t even stop the day-to-day naked short selling in the first place and you can't be covering at the same time you continue to naked short sell.

What typically happens in these situations is that the victim company has to massively dilute its share structure from the constant paying of the monthly burn rate with money received from the selling of “real” shares at artificially low levels. Then the goal of the naked short sellers is to point out to the investors, usually via paid “Internet bashers”, that with the, let’s say, 50 billion shares currently issued and outstanding, that this lousy company is not worth the $5 million market cap it is trading at, especially if it is just a shell company whose primary business plan was wiped out by the naked short sellers’ tortuous interference earlier on.

The truth of the matter is that the single biggest asset of these victim companies often becomes the astronomically large aggregate naked short position that has accumulated throughout the initial “bear raid” and also during the “cellar boxing” phase. The goal of the victim company now becomes to avoid the 3 main goals of the naked short sellers, namely: bankruptcy, a reverse split, or the forced signing of a death spiral convertible debenture out of desperation. As long as the victim company can continue to pay the monthly burn rate, then the game plan becomes to make some of the strategic moves that hundreds of victim companies have been forced into doing which includes name changes, CUSIP # changes, cancel/reissue procedures, dividend distributions, amending of by-laws and Articles of Corporation, etc. Nevada domiciled companies usually cancel all of their shares in the system, both real and fake, and force shareholders and their b/ds to PROVE the ownership of the old “real” shares before they get a new “real” share. Many also file their civil suits at this time also. This indirect forcing of hundreds of U.S. micro cap corporations to go through all of these extraneous hoops and hurdles as a means to survive, whether it be due to regulatory apathy or lack of resources, is probably one of the biggest black eyes the U.S. financial systems have ever sustained. In a perfect world it would be the regulators that periodically audit the “C” and “D” sub-accounts at the DTCC, the proprietary accounts of the MMs, clearing firms, and Canadian b/ds, and force the buy-in of counterfeit shares, many of which are hiding behind altered CUSIP #s, that are detected above the Rule 11830 guidelines for allowable “failed deliveries” of one half of 1% of the shares issued. U.S. micro cap corporations should not have to periodically “purge” their share structure of counterfeit electronic book entries but if the regulators will not do it then management has a fiduciary duty to do it.

A lot of management teams become overwhelmed with grief and guilt in regards to the huge increase in the number of shares issued and outstanding that have accumulated during their “watch”. The truth however is that as long as management made the proper corporate governance moves throughout this ordeal then a huge number of resultant shares issued and outstanding is unavoidable and often indicative of an astronomically high naked short position and is nothing to be ashamed of. These massive naked short positions need to be looked upon as huge assets that need to be developed. Hopefully the regulators will come to grips with the reality of naked short selling and tactics like "Cellar boxing" and quickly address this fraud that has decimated thousands of U.S. micro cap corporations and the tens of millions of U.S. investors therein.

Tecch10000  Re: Welcome to the new Unico Discussion Board
 Reply #5964 on: November 06, 2007, 09:15:36 PM

one theory, or commonly accepted outlook, is that MM's "cellar box" a stock, shorting it into the .0001 - .0004 "cellar," making money all the way down by shorting. Then they hold it there. If the company goes bankrupt, the shorts never have to be covered...

But you are on to something: Buy at .0001 and sell at .0002 for a double.

But the bid has to be at .0002 in order to do that...

Watch the spreads on some of these for a few days; jot down the days when you can buy something at .0001 and then when you could have sold at .0002...

I think you'll find the ones who can consistently take advantage of this are the MMs, who rode it down to these levels in the first place...

Back to "cellar boxing": the idea is that this evolved as MM-response to decimalization. Use to they--and "scalpers" (a certain kind of daytrader)--would work the spread looking for "teenies." For example's sake, say, the spread was 2 1/8 Bid - 2 1/2 Ask. The scalper would "step in front" of the Bid, buying at 2 1/4 then turn around and step in front of Ask, selling at 2 3/8. They'd make their nut on volume, clearing, say, $125 and move to the next one. One an hour made a pretty good day...Naturally, MMs and "specialists" would rake it from their side, too.

Decimilization changed that, so the thinking goes, so MM's responded by exploiting doubles in the .0001/.0002 and .0002/.0004 range...

Re: Welcome to the new Unico Discussion Board
« Reply #5978 on: November 07, 2007, 02:55:59 PM »

AND SO,

This is a possible answere to the $5.00 trades,
-------------------------------------------------------------------------------------------------------------------------
In order to participate in “cellar boxing”, the MMs first need to pummel the price per share down to these levels. The lower they can force the share price, the larger are the percentage spreads to feed off of. This is easily done via garden variety naked short selling. In fact if the MM is large enough and has enough visibility of buy and sell orders as well as order flow, he can simultaneously be acting as the conduit for the sale of nonexistent shares through Canadian co-conspiring broker/dealers and their associates with his right hand at the same time that his left hand is naked short selling into every buy order that appears through its own proprietary accounts. The key here is to be a dominant enough of a MM to have visibility of these buy orders. This is referred to as "broker/dealer internalization" or naked short selling via "desking" which refers to the market makers trading desk. While the right hand is busy flooding the victim company's market with "counterfeit" shares that can be sold at any instant in time the left hand is nullifying any upward pressure in share price by neutralizing the demand for the securities. The net effect becomes no demonstrable demand for shares and a huge oversupply of shares which induces a downward spiral in share price.

BOTTOM LINE
• Every investor in the markets should listen to the following presentation. If you haven't I suggest you get to it.
http://www.thesanitycheck.com/BobsSanityCheckBlog/tabid/56/EntryID/663/Default.aspx
http://www.deepcapturethemovie.com/
Darkside of the Looking Glass - The Corruption of Our Capital Markets:
http://www.businessjive.com/
• YOU MUST UNDERSTAND THAT THE MARKET IS LEGALLY CROOKED AND LEGALLY MANIPULATED........
investors must take care to be in longer term growth stocks which show promise of fundamental improvement.....check our commentary....stock index futures trading and options expiration along with the use of rumor mills are the  biggest tools used by Wall Street insiders to legally screw the American investor ...... and there is more including naked shorting.  The SEC talks but does nothing but talk...........
http://www.worldenquirer.com/
• Market Reform Petition:
http://www.petitiononline.com/mrktrfrm/petition.html

>>>

S4Me  Re: Info links for SEC complaint letters
« Reply #43 on: July 27, 2007, 09:18:07 AM »   
http://investorscob.com/earsforum/index.php?topic=316.135     
Universal Express' General Counsel Charges SEC With Permitting the Destruction of Over 5,000 Public Companies

NEW YORK, NY, Jul 27, 2007 (MARKET WIRE via COMTEX News Network) --
Universal Express, Inc. (OTCBB: USXP) General Counsel, Chris Gunderson, charged the SEC today with permitting the destruction by naked shorters of 5,000 to 7,500 small public companies over the last 10 years. He intends, if requested, to testify before the Senate Banking Committee.

"The SEC has permitted the destruction of thousands of small public companies by failing to regulate naked shorting and by protecting stock counterfeiters. The now admitted naked shorting scandal, involving the sale of trillions of counterfeit and phantom shares into the market in the names of those companies, resulting in the destruction of their share prices, forcing them out of business and devastating the investments of millions of small investors, while eliminating the jobs of tens of thousands of their employees, continues today," stated Mr. Gunderson.

"The SEC has permitted the ongoing destruction of American small public businesses, without conscience. The primary source of economic expansion and job growth for our economy is that of developing public companies," continued Mr. Gunderson.

"Universal Express' $700,000,000 naked shorting judgment obviously upset and embarrassed the SEC. Since that judgment, the standard SEC operating procedure of vilifying the victim, intimidating partners and attempting to silence the whistleblower has been in force against Universal Express. Nevertheless the SEC has failed to deliver the protection to investors and developing companies attacked by this counterfeiting scandal. I applaud Senator Bennett's courageous position on naked short selling as he presented it this week," concluded Mr. Gunderson.

"Mr. Gunderson's frustration at the SEC and the naked shorting scandal, as well as his bringing these serious abuse of power problems to the main stream media is admirable. Losing billions of dollars daily in the interest of unscrupulous brokers and other dishonest interests is reprehensible. Let's count on our Senators to support Senator Bennett and act on this scandal as Universal Express awaits a jury trial to do the same," said Richard A. Altomare, Chairman and CEO of Universal Express, Inc.

Audio link to Senator Bennett's Speech: http://www.everyzing.com/viewMedia.jsp?index=4&start=0&mc=en-all&il=en&col=en-all-public-ep&q=trading+or+stock&res=14711810&num=10&filter=1&match=query,channel&dedu pe=1&y=0&channel=41&x=0&e=7909995

Text link to Senator Bennett's Speech: http://bennett.senate.gov/press/record.cfm?id=279519

About Universal Express:
Universal Express, Inc. is a 23-year-old logistics and transportation conglomerate with multiple developing subsidiaries and services. For additional information please visit www.usxp.com

Safe Harbor Statement under the Private securities Litigation Reform Act of 1995: The statements contained herein, which are not historical, are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements including, but not limited to, certain delays beyond the Company's control with respect to market acceptance of new technologies, products and services, delays in testing and evaluation of products and services, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.

Contact: Chris Gunderson Universal Express, Inc. 917-639-4157 Email Contact
SOURCE: Universal Express, Inc.
http://www2.marketwire.com/mw/emailprcntct?id=8415C46FADEBD225
Copyright 2007 Market Wire, All rights reserved. 

[Hilander]

SHORTING THE MARKET
I saved this section for last because there's people who have traded stocks for years and never shorted the market. Its very risky and unless you know what your doing, you can loose your shirt and your shorts!

Short Sale
Short Sale - Investors who borrow stock and sell it to someone else are betting the shares go down in price. Then, they can buy back the stock at a lower price and pocket the difference as profit. Going "short" is the opposite of going "long," or owning shares for the long haul. Short Interest - This is the total number of shares of a security that investors have sold short -- borrowed, then sold in the hope that the security will fall in value. An investor then buys back the shares and pockets the difference as profit.

Short Interest
Short Interest - Investopedia:
Short Interest - What Does It Mean?
http://www.investopedia.com/terms/s/shortinterest.asp
• The total number of shares of a security that have been sold short by customers and securities firms.
• Short interest is typically expressed as a percentage. For example, 3% short interest means that 3% of the outstanding shares are held short.

Days To Cover
Days To Cover:
A measurement of a company's issued shares that are currently shorted, expressed as the number of days required to close out all of the short positions. For example, if a company has average daily volume of 1 million shares and 2 million shares are currently short sold, the shares have a cover rate of 2 days (2M/1M).

Short Interest Ratio
Short Interest Ratio - What Does It Mean?
http://www.investopedia.com/terms/d/daystocover.asp
• Also referred to as the "short-interest ratio".
This ratio is somewhat unique because it measures the future buying pressure on a stock that is virtually certain to happen - short sellers must buy back shares at some point if they are to close out their positions.
• If a stock's price begins to rise significantly, investors who have short sold the stock will quickly begin to close out their positions (by purchasing shares off the open market), creating buying pressure for the stock and driving the price up even more. If a previously lagging stock turns very bullish, the buying action of short sellers can result in extra upward momentum and increased losses for short sellers who are slow to close out their positions. The longer the days to cover, the more pronounced this effect can be.

More on Short Interest Ratio:
http://www.investopedia.com/terms/s/shortinterestratio.asp
• A sentiment indicator that is derived by dividing the short interest by the average daily volume for a stock. This indicator is used by both fundamental and technical traders to identify the prevailing sentiment the market has for a specific stock. Also known as the "short ratio".
• This ratio provides a number that is used by investors to determine how long it will take short sellers, in days, to cover their entire positions if the price of a stock begins to rise. The short interest ratio can also be applied to entire exchanges to determine the sentiment of the market as a whole. If an exchange has a high short interest ratio of around five or greater, this can be taken as a bearish signal, and vice versa.

Short Covering
Short Covering - What Does It Mean?
http://www.investopedia.com/terms/s/shortcovering.asp
• The act of purchasing securities in order to close an open short position. This is done by buying the same type and number of securities that were sold short. Most often, traders cover their shorts whenever they speculate that the securities will rise. In order to make a profit, a short seller must cover the shorts by purchasing the security below the original selling price.
• Also referred to as buy to cover or buy back.
• For example, suppose a trader has sold short 50 shares of ABC stock at a price of $10.00/share, because he speculated that ABC will not be successful in the near future. Unfortunately for the trader, the company has been recently very lucky and its price rose to $15.00/share. In order to limit his losses, this trader decides to cover his short position by buying back the 50 short sold shares at a price of $15.00/per share.

Short Position
Short (or Short Position)
http://www.investopedia.com/terms/s/short.asp
1. The sale of a borrowed security, commodity or currency with the expectation that the asset will fall in value.
2. In the context of options, it is the sale (also known as "writing") of an options contract.

Opposite of "long (or long position)".

1. For example, an investor who borrows shares of stock from a broker and sells them on the open market is said to have a short position in the stock. The investor must eventually return the borrowed stock by buying it back from the open market. If the stock falls in price, the investor buys it for less than he or she sold it, thus making a profit.
2. For example, selling a call (or put) options contract to a buyer entitles the buyer the right, not the obligation to buy from (or sell to) you a specific commodity or asset for a specified amount at a specified date.

Weak Shorts - What Does It Mean?
http://www.investopedia.com/terms/w/weakshorts.asp
• Refers to the group of investors who hold a short position and are quick to exit their positions at the first sign of strength in the underlying asset. This group of investors looks to capture the gain on a move lower, but they are usually unwilling to take on as much risk as other investors.
• Weak shorts differ from other traders because they will close their position at the first sign that it will move against them. It is not uncommon for this group of investors exit a position only to see the asset move to a price that would have made the trade profitable if they had left it open.

[Hilander]

PAYING IRS TAXES

It's IRS Time Again: (Plan for the future)
OK, Now What? What are we gonna do with your profits & losses?

• I use these as my guideline and they change from year to year. I suggest you make your own.
• I update my notes yearly. It's always a good idea to review this once a year to see if there's any changes to the IRS Code. Were there anychanges for 2006? YES! Will there be any tax changes for 2007? Probably!

2-15-07 UPDATE (Do your own DD, Everyone’s tax situation is unique to themselves. Ask questions to your CPA, that way you know how this new info effects your individual circumstances. My moto is check, check, double check. That way you can sleep with peace of mind.)

CAPITAL GAINS & DIVIDEND RATES
CPA confirmed: Lower capital gain and dividend tax rates had been scheduled to expire after 2008. They are now extended through the end of 2010. Capital gains and dividend income are taxed at a maximum rate of 15 % through 2010. For taxpayers in the 10% & 15% tax brackets, the tax rate is 5% through 2007 and zero from 2008 through 2010.

This also confirms the following article Tax Traps Can Snare Your Capital Gains published in U.S. News & World Report Posted Sunday, July 16, 2006

ADDITIONAL READING
Tax Traps Can Snare Your Capital Gains 
By: Leonard Wiener
Posted Sunday, July 16, 2006 in US News.com
http://www.usnews.com/usnews/biztech/articles/060716/24checklist.htm

PAYING IRS TAXES
ETF’s - Don’t buy unless you plan on keeping more than one year.
Short Term Capital Gains Tax (less than a year) Now=35% Later=23%
Long Term Capital Gains Tax (over a year) Now=28% Later=23%
As noted, the difference in taxation between these two investment vehicles is rather large, especially in all transactions under a year in duration.

REMEMBER
One thing to consider, by holding my core positions I put myself in a position to minimize my taxes and pay long-term capital gains when I do decide to take profits down the road.


5-15-06
AT TAX SEASON VERIFY TAX RATES!!! (Old News)
Silver Institute
(202) 835-0185
Congress and Senate are scheduled to vote on lowering gold & silver tax rates. Plan to change from being a collectable to a precious metals stock. Bill #HR-574 S-611. Should be a new tax rate for 2006?

Reminder Note: Determine what the new precious metal stock tax rate will be for 2006. Sounds like there's a change coming.  “For those of you concerned that the unequal tax treatment of your gold holdings, and judging by my email there are a lot of you, J. Kent Willis has reported that "Joint legislation from Nevada Senators Reid and Ensign aka 'Fair Treatment for Precious Metals Act' passed the US Senate in 2004 with a vote of 92-5. The House has not approved it yet, but will soon."  The bill will treat gold bullion investments as it does other  equities, with short and long term tax rates of 20% and15%, instead  of continuing to treat gold as  a collectible, and thus taxable at the 28% rate”.

[Hilander]

STRATEGY
Everyone develops their own style of trading. Here’s a look at a rough sketch of a couple of friends:
• I like buying at least 100,000 shares minimum at a time. I figure if a stock is worth owning, that’s what I start out with and go from there.
• I didn’t know in the beginning, but know now, any individual stock is down 90%  of the time and only up roughly 10% of the time
• I trust the charts and keep a close eye on them. The price and volume patterns are the most important things to monitor.
• Never invest in anything when you don't really understand what the company does.
• Be careful when investing in companies that are under 5 years old.
• From experience, low priced stocks flucuate wildly but very seldom go straight up and hold their value.
• Took a lot of money to learn NEVER FALL IN LOVE WITH A STOCK! They go up and down watch level 2 and time your buys and sells!

OTCBB Rules

Do I have what it takes?

20 GOLDEN RULES FOR TRADERS
http://investorshub.advfn.com/boards/board.asp?board_id=9223

1. Forget the news, remember the chart. You're not smart enough to know how news will affect price. The chart already knows the news is coming.
2. Buy the first pullback from a new high. Sell the first pullback from a new low. There's always a crowd that missed the first boat.
3. Buy at support, sell at resistance. Everyone sees the same thing and they're all just waiting to jump in the pool.
4. Short rallies not selloffs. When markets drop, shorts finally turn a profit and get ready to cover.
5. Don't buy up into a major moving average or sell down into one. See #3.
6. Don't chase momentum if you can't find the exit. Assume the market will reverse the minute you get in. If it's a long way to the door, you're in big trouble.
7. Exhaustion gaps get filled. Breakaway and continuation gaps don't. The old traders' wisdom is a lie. Trade in the direction of gap support whenever you can.
8. Trends test the point of last support/resistance. Enter here even if it hurts.
9. Trade with the TICK not against it. Don't be a hero. Go with the money flow.
10. If you have to look, it isn't there. Forget your college degree and trust your instincts.
11. Sell the second high, buy the second low. After sharp pullbacks, the first test of any high or low always runs into resistance. Look for the break on the third or fourth try.
12. The trend is your friend in the last hour. As volume cranks up at 3:00pm don't expect anyone to change the channel.
13. Avoid the open. They see YOU coming sucker
14. 1-2-3-Drop-Up. Look for downtrends to reverse after a top, two lower highs and a double bottom.
15. Bulls live above the 200 day, bears live below. Sellers eat up rallies below this key moving average line and buyers to come to the rescue above it.
16. Price has memory. What did price do the last time it hit a certain level? Chances are it will do it again.
17. Big volume kills moves. Climax blow-offs take both buyers and sellers out of the market and lead to sideways action.
18. Trends never turn on a dime. Reversals build slowly. The first sharp dip always finds buyers and the first sharp rise always finds sellers.
19. Bottoms take longer to form than tops. Greed acts more quickly than fear and causes stocks to drop from their own weight.
20. Beat the crowd in and out the door. You have to take their money before they take yours, period.

Stressed Out?
If I'm stressin' - I'm doing something wrong
1. If you force a trade - you're screwin' up. Hope isn't a technical indicator.
2. Enter and exit an issue based only on the chart.
3. Ignore stock hype - objectivety is difficult when you have a stake.
4. Greed kills - any profit is good. There's always another POS-
5. Your capital is your most important trading tool - protect it.
http://investorshub.advfn.com/boards/board.asp?board_id=3013

Avoiding Dilution When You Can?
How to play a penny stock or micro cap stock near its bottom. You will come across a lot of stocks at or near their bottoms when trading penny stocks, here are some tips for timing your purchase correctly.

Once you have found a stock you like, take a look at its 52-week high and its 52-week low. This will give you the stock’s trading range for the year. When a stock is trading near its 52-week low it has a better chance of moving upward in the trading range. When at a 52-week high, some traders may feel its to risky to purchase and will wait until there is a retrace in price. This is a general rule for the majority of penny stocks that trade within a range. There are some obvious exceptions, such as great news causing a penny stock to continually make new 52-week highs.

When a stock you like is near or at its 52-week low, you must investigate why. Search for any S-8’s, SB-2’s, or an increase in the amount of operating shares. These filings are dilution, the company will have added shares to the market causing an increase in supply and a price drop. If these filings are not present and there is no reason for the stock to have dropped this low, then it may be a good time to invest.

You should have a good reason why you like the stock before purchasing. Some major things to keep an eye on are stocks in very strong markets. Currently gold and oil stocks are strong, therefore finding undervalued gold and oil penny stocks is a good idea. Another of my favorites is finding a penny stock with an innovative product, these types of products can garner national media attention and often will draw the interest of other big companies in that field.

Ideally, you want to find a company that has increasing revenues and a lot of valuable assets. These types of companies are hard to find and you must investigate thoroughly. Often you must assume they will generate revenues in the future. Look at the amount of shares the insiders are holding: is there a small float with a large amount of insider ownership? This would be a sign that the insiders think that their shares will be very valuable in the future. At times you will also find that institutions are holding a percentage of shares, which would also be a good sign.

Using a stock screener you will be able to generate lists of stocks with institutional holders, insider buying, small floats, and strong revenues. After you generate these lists, separate them by their fields, such as technology, oil, or gold. Find the companies that interest you most in the strongest of fields and begin to read the filings. You will be able to dismiss some companies almost immediately. Keep narrowing down your search until you have a handful of companies into which you are willing to invest your hard earned money.

If you have done your research correctly, the company should continue to grow in value and in time other investors will realize the potential and the price of the stock will continue to rise.
By Keith Guyette M.Ed, J.D

Research From:
http://investorshub.advfn.com/boards/board.asp?board_id=9223




IBD-INVESTOR EDUCATION
If all of Investor's Business Daily (IBD's) 20 rules are carefully followed (not just the ones you like), your investment results should materially improve: http://www.investors.com/editorial/editorialcontent.asp?secid=1000
1. Consider buying stocks with each of the last three years' earnings up 25%+, return on equity of 17%+ and recent earnings and sales accelerating.
2. Recent quarterly earnings and sales should be up 25% or more.
3. Avoid cheap stocks. Buy higher quality stocks selling $15 a share and higher.
4. Learn how to use charts to see sound bases and exact buy points.
5. Cut every loss when it’s 8% below your cost. Make no exceptions so you can always avoid huge, damaging losses. Never average down in price.
6. Follow selling rules on when to sell and take profit on the way up.
7. Buy when market indexes are in an uptrend. Reduce investments and raise cash when general market indexes show five or more days of volume distribution.
8. Read IBD's Investor's Corner and Big Picture columns to learn how to recognize important tops and bottoms in market indexes.
9. Buy stocks with a Composite Rating of 90 or more and a Relative Price Strength Rating of 85 or higher in the IBD SmartSelect® Corporate Ratings.
10. Pick companies with management ownership of stock.
11. Buy mostly in the top six broad industry sectors in IBD’s New High List.
12. Select stocks with increasing institutional sponsorship in recent quarters.
13. Current quarterly after-tax profit margins should be improving, near their peak and among the best in the stock's industry
14. Don’t buy because of dividends or P-E ratios.
15. Pick companies with a superior new product or service.
16. Invest mainly in entrepreneurial New America companies. Pay close attention to those with an IPO in the past 8 years.
17. Check into companies buying back 5% to 10% of their stock and those with new management.
18. Don’t try to bottom guess or buy on the way down. Never argue with the market. Forget your pride and ego.
19. Find out if the market currently favors big-cap or small-cap stocks.
20. Do a post-analysis of all your buys and sells. Post on charts where you bought and sold each stock. Evaluate and develop rules to correct your major past mistakes.


Course I - How To Select The Right Stocks At The Right Time
http://www.investors.com/learn/b.asp

Introduction:
The eleven lessons in this course explain the characteristics of successful stocks and the forces that push them up. The first seven lessons explain specific traits to look for when buying stocks. The eighth is a summary, providing you with a checklist for evaluating stocks. The ninth and tenth lessons offer instruction on how to read stock charts to give you the total picture before you make your purchase decisions. The final lesson explains how to monitor stocks once they're part of a portfolio.


Course II - How To Sell Stocks To Maximize Your Profits
http://www.investors.com/learn/s.asp

Introduction:
Buying a stock is only half of the equation. Knowing when to sell is just as important. The first part of this course discusses why it's critical to cut your losses early. The second and third lessons teach you how to spot the best time to sell and take your profits, including ways to use stock charts to detect a weakening stock.

[Hilander]

THE MANUAL
Advanced Commodity Trading Techniques:
THE MANUAL (Out of Print)
By: Ted Warren-deceased

Warren’s Trading Techniques came from his writings and experiences documented during the 1930’s through 1950’s. I like his techniques because they are simple. Simple works best for me.

Bottom line is the charts do what the charts do. Sometimes, we get lucky and sometimes we don’t. But, it does help to learn the human behavior issues. In both cases the MM’ers or the company’s shake out the week hands intentionally before releasing the Bull’s to Run. That’s what’s difficult to read. We must develop our intuition and skills of reading charts. The charts never lie.

Every trader is responsible for his own decisions. If you trade from these notes you accept full responsibility for your actions.

Notes
• Sought markets that were just ending a lengthy accumulation base. Got in when the chart gave him the right signal.
• Warren’s not interested in short term trading, too risky. Don’t have the temperament.
• Worst enemy is emotions. Fear of missing a move was primarily the worst weakness, causing one to get into the market too often.
• Soon became apparent, the importance of manipulation in the market and the psychology of the public which is the basis for interpreting future actions of the market.
• The public will sell at any price when they are scared or when they are pressed by margin calls or for many normal reasons when they are in dire need of cash.
• Charts: Pay attention to head and shoulder bottoms.
• It’s from lengthy low areas that many of the profitable large moves start.
• Only buy high after a proper formation such as a triangle, especially a flat-topped triangle or a long consolidation period of many weeks.
• If your lucky enough to have a bottom or a good formation show up once a year, play it heavily by buying on a scale-up during the early part of the move.
• Playing the small and intermediate moves is what kills you.
• “It is difficult to describe tops in the futures markets. They are almost always made up of violent action. That is the time to sell. But, the very largest moves will have violent trading actions with its shakeouts before the top is made. Sometimes there may be two tops, months apart. There are so many variations. I have sold on the top range, but rarely. Once, I sold rye on a top day purely by accident because I stubbornly held on for a long term capital gain in 1951. I realized previously that the insiders, with their huge profits must try to convert them into long-term capital gains as much as possible. Because of this reasoning I was able to hold on with confidence.”
• Because tops are usually so violent and can so seldom be picked with any degree of accuracy, I advise against trying to sell short.
• Pyramiding: After having bought about one-third of your purchasing ability within the latter part of a head and shoulders bottom during an accumulation or consolidation triangle, you should buy another one-third as it breaks out on the upside. Then after this when it has a reaction, place a stop buy for the other third above the last high. You now have a cushion of profit to help keep you from sweating. As the markup stage continues at a moderate pace with normal setbacks, after each advance into new high ground you can use your paper profits to buy more by placing stop buys above recent highs during a setback. It is very common during this early markup stage for a commodity to form a nearly perfect trend line. As momentum is gathered there may suddenly be a one-day fast rise followed by a sharp setback almost as quickly giving a weak appearance as if it has gone too high. Don’t let it fool you. It’s meant to look this way. You and others are considered to be excess baggage. This was meant to dump you overboard and to discourage buying. Normally after this shakeout with the price recovering to near the recent highs, you can buy more with your paper profits if you wish and move your stop sells to below the recent low. Remember if you have a long base behind this move you can expect a large rise. After the next fast rise, if it continues to “boil” on the upside, it may be in a top area. From here on, you are on your own. This first violent action may be the tip or it may not be. I have seen tips that appeared to be obvious but sold long before because I had misinterpreted a previous action as a tip. You may wait with patience to pick a strong appearing bottom but when you are in, you are under pressure to pick a selling spot and there comes a time when time is short.

It is important to keep and study old charts to learn to anticipate future action by studying past actions. If their wasnt excess speculation, there would only be moderate price changes.
• Hedging is selling short against commodities in trade and storage. Without speculators there could not be any hedging. Why not make use of the gullible public to absorb the risks involved by wide swings in prices!
• Strange as it seems, after all the know how one will seem to have acquired, nearly every right decision made will turn out to be at the wrong time. When a purchase was made, wasn’t everybody else buying? Obviously, it had to go up. It did but not much. All the bullish news indicated it would go much higher. What went wrong? Simply that too many traders had the same opinion.
• One can afford to plunge with a minimum of risk in the head and shoulders or triangles of long duration.
• Beware of trying for the intermediate moves.
• In the last 16 days of action, I could recognize how the manipulations in the triangle affected the average trader. I could see the internal forces that were being built up. From the trader’s viewpoint, it was obvious the rise could not continue going up. The trader does not understand that when it is obvious to him it is also obvious to the majority. Except for temporary periods, the majority is always wrong because the insiders are on the opposing side, just like a contest. They know what they are doing and have the power to do it.
• Chartist: Study the charts carefully. When I don’t have a positive appearing formation to back up my opinion, I seem to get frightened too easily.
• It’s far better to buy in at as safe a manner as possible. If I can buy into a slow rise that confirms my opinion from a sound base, I will acquire a cushion of profit against an early shakeout. There are no signs for the average fundamentalist to foresee the big move ahead except from what I can extract from the charts. Keep studying the charts.

Another Book By Warren-1966, 1993, 1994, 1995, 1998:
How To Make The Stock Market Make Money For You by Ted Warren
http://www.4starbooks.com/product.php?productid=16382&cat=0&page=1

To Buy The Book:
http://www.amazon.com/s/ref=nb_ss_b/102-4904825-9405732?url=search-alias%3Dstripbooks&field-keywords=how+to+make+the+stock+market+make+money+for+you+by+ted+warren&Go.x=0&Go.y=0&Go=Go

[Hilander]

WHEN TO SELL?
PATIENCE, PATIENCE, PATIENCE.

There is a lot of research written about selling, These articles are from my Desk Top Trading Journal.

I have compiled this in three parts to break up the information into bite size portions so it can be digested easily.

Part 1:
Bill Panetta’s 50% rule: http://www.esignalcentral.com/exchange/05_2006/third_party_spotlight.asp

http://www.trade10.com/Elliot_Wave.html (50% Drop = Sell; Price Breaks Upward=Keep)

Golden Cross
http://www.investopedia.com/terms/g/goldencross.asp
A crossover involving a security's short-term moving average (such as 15-day moving average) breaking above its long-term moving average (such as 50-day moving average) or resistance level.



As long-term indicators carry more weight, the Golden Cross indicates a bull market on the horizon and is reinforced by high trading volumes. Additionally, the long-term moving average becomes the new support level in the rising market.

Technicians might see this cross as a sign that the market has turned in favor of the stock.

Hammer Affect
http://www.investopedia.com/terms/h/hammer.asp

When to Sell a Stock?
ARTICLE By: Mike Hoy             
March 30, 2006
http://www.gold-eagle.com/editorials_05/hoy033006.html
http://www.gold-eagle.com/research/hoyndx.html

The first biggest mistake is deciding to sell stocks at prices that will prove to be pennies on the dollar before they reach their ultimate bull market highs.

First, start with the management of each company. There is no such thing as a “good investment” without a capable management team to get the job done. I do not even consider an investment if I am not comfortable with management.

Second, look at the business plan. I must know where management proposes to take the company and how they hope to get there. If management has a solid business plan then determine how long it will take for the company to accomplish their goals. It is important to remember why we made the decision to make the investment in the first place.

DECIDING WHEN TO SELL!
In a bull market practically all stocks rise in the sectors benefiting from the favorable market conditions. The key to wealth is knowing which stocks to take profits from and which ones to hold as core positions. Corrections and consolidations give opportunities to build positions. I always get a charge from people who seem to think that just because a stock rises in value an investor has to take a profit so as not to lose what he has made on paper. I liken this to my days as a broker, years ago, when I saw time and time again how investors were very easily encouraged to take a profit and reinvest the proceeds into a position that was underwater. I too was guilty of doing this as I felt it was the right thing to do. Time and experience has proven the error of this type of thinking. In practically all cases it was the losing stock position that should have been sold with the proceeds used to buy more of the winning stock. Often investors will take a profit from one company to purchase an investment in a new company. I have never been able to understand how this logic is supposed to lessen an investor’s risk when the capital is reinvested in a new venture. Seems to me the investor is starting the risk all over again.

In my three favorite companies my money has more than doubled in one and tripled in the other and up more than tenfold, on my initial investment, in the third. Once an investor sees returns of this nature on the stocks in their portfolio they will then have the confidence to not worry about the day to day price volatility in their portfolios. This type of attitude can very easily be adopted when one is in a bull market in the sectors that you own. As time moves forward I am automatically checking the progress of my investments with the business plans that the management of my investments have laid out for them to accomplish. If I find that management is successfully moving my investments towards a final goal, which inevitably is proving up an ore body or putting an already proven ore body into production, then I am a happy camper and I will continue to own and build positions in my investments. Most investors do not realize that the companies they own could be considered more undervalued at two or three times their purchase price as management successfully delivers on their business plans. This is where the boys are separated from the men. Being able to understand true value from building a company from the ground floor up versus a stock that simply has a very good marketing team telling a good story is the key in knowing when to take a profit versus owning a stock as a core holding. In the three stocks I referred to I am very happy to say that I have added to my positions as management has proved up additional value to the companies. I have taken money from companies whose management failed to deliver and used that as the additional funds to build my winning positions.

IMO, the reason I have been drawn to making investments in start up junior mining and natural resource companies deal directly with the rewards of finding the company with a resource that becomes a positive cash flowing mine. I know that very few companies have bodies of ore that will ever see the day when they will be called a producing mine. The odds are stacked against every junior mining company ever becoming classified as a successful producing company. However, the rewards of being successful in finding a junior that is bought out or becomes a producing company far outweigh the risk associated with making the investment. Huge profits and returns await those who are successful and patient.

The ironic part to this story deals with companies that may falter in being able to timely deliver on their business plans. There are many reasons why a company may fall behind; some of these reasons are totally acceptable as being normal in the mining industry. In cases like this positions should be built to take long term advantage over a short term holdup. The “boys” also get separated at this point as many times these failures are warning signs that something is not right. I like to refer to these failures as “Material Changes.” Time always separates fact from fiction. A shrewd investor can recognize material changes as time brings the truth out of fiction. As time reveals that management has made mistakes, overestimated ore bodies, underestimated costs, fudged the truth about what they hoped to have, or simply did not have a clue what they originally hoped to accomplish in the first place; there is consolation in knowing that all is not lost. In a bull market there is a strong possibility that good money can still be made when an individual owns a company like this. Remember a rising tide will lift all boats. Knowing that “all is not well” is the first step in knowing that this company is on its way out of my portfolio. I will make sure I liquidate companies of this nature as they move up in price and liquidity offers a timely exit. I get a charge out of being able to make money on companies that deserve to be liquidated at a loss. Have you ever noticed that stocks offer excellent liquidity to sell as they move higher in price? The important point to make here is; if you decide to sell a stock out of your portfolio do it when liquidity gives you the opportunity to do so not when your emotions stir you to sell.

THREE SECRETS
The three secrets to making big money in the markets are:
1) Accumulating good quality stocks or stocks that have great potential when no one wants them
2) Being able to let loose of the stocks that encounter material changes when they rise and liquidity offers the opportunity to delete them from your portfolio
3) Knowing which stocks should be considered core holdings where weakness should be viewed as an opportunity to build positions at a discount

CONCLUSION
Like I have said, knowing when to sell a stock can be very complicated. Ultimately my decisions to sell are based on the accomplishments of management in being able to deliver value to their shareholders. By holding my core positions I put myself in a position to minimize my taxes and pay long term capital gains when I do decide to take profits down the road.


Indicator to Sell or Buy
http://quotes.barchart.com/texpert.asp?sym=ucoi


Course II - How To Sell Stocks To Maximize Your Profits
http://www.investors.com/learn/s.asp

[Hilander]

WHEN TO BUY?
Patience, Patience, Patience.

In past articles I have touched upon how to play a penny stock or micro cap stock near its bottom. You will come across a lot of stocks at or near their bottoms when trading penny stocks, here are some tips for timing your purchase correctly.

Once you have found a stock you like, take a look at its 52-week high and its 52-week low. This will give you the stock’s trading range for the year. When a stock is trading near its 52-week low it has a better chance of moving upward in the trading range. When at a 52-week high, some traders may feel its to risky to purchase and will wait until there is a retrace in price. This is a general rule for the majority of penny stocks that trade within a range. There are some obvious exceptions, such as great news causing a penny stock to continually make new 52-week highs.

When a stock you like is near or at its 52-week low, you must investigate why. Search for any S-8’s, SB-2’s, or an increase in the amount of operating shares. These filings are dilution, the company will have added shares to the market causing an increase in supply and a price drop. If these filings are not present and there is no reason for the stock to have dropped this low, then it may be a good time to invest.

You should have a good reason why you like the stock before purchasing. Some major things to keep an eye on are stocks in very strong markets. Currently gold and oil stocks are strong, therefore finding undervalued gold and oil penny stocks is a good idea. Another of my favorites is finding a penny stock with an innovative product, these types of products can garner national media attention and often will draw the interest of other big companies in that field.

Ideally, you want to find a company that has increasing revenues and a lot of valuable assets. These types of companies are hard to find and you must investigate thoroughly. Often you must assume they will generate revenues in the future. Look at the amount of shares the insiders are holding: is there a small float with a large amount of insider ownership? This would be a sign that the insiders think that their shares will be very valuable in the future. At times you will also find that institutions are holding a percentage of shares, which would also be a good sign.

Using a stock screener you will be able to generate lists of stocks with institutional holders, insider buying, small floats, and strong revenues. After you generate these lists, separate them by their fields, such as technology, oil, or gold. Find the companies that interest you most in the strongest of fields and begin to read the filings. You will be able to dismiss some companies almost immediately. Keep narrowing down your search until you have a handful of companies into which you are willing to invest your hard earned money.

If you've done your research correctly, the company should continue to grow in value and in time other investors will realize the potential and the price of the stock will continue to rise.

About the author:  Keith Guyette M.Ed, J.D. is a professional trader and the owner of a stock talk board thepennystockblog.com as well as the head stock analyst for bottompicks.com.


Indicator to Buy or Sell
http://quotes.barchart.com/texpert.asp?sym=ucoi


Course I - How To Select & Buy The Right Stocks At The Right Time
http://www.investors.com/learn/b.asp

MACD Lines
Googled 8 Items:
http://www.google.com/search?client=safari&rls=en&q=macd+lines&ie=UTF-8&oe=UTF-8
http://www.streetauthority.com/terms/macd.asp
http://upload.wikimedia.org/wikipedia/en/thumb/6/64/Lesdeuxmagots.jpg/800px-Lesdeuxmagots.jpg

Developing a Trading Strategy

Prior to buying a stock see if it's listed with Global OTCBB Companies?
http://globalwebpartners.com/OTCBB-directory-active-companies.html

Sponsored by BarChart http://quotes.barchart.com/texpert.asp?sym=ucoi
http://www.ddmachine.com/default.asp