Tax Loss Selling Plays

January is a frigging nutty month for trading beaten up small cap, penny, china ding dog stocks. (except for last year when the market was in freefall). What you will see is with the aftermath of spring 2009 a lot of big caps, smallcaps become microcaps! There can be great opportunity in these names as January starts. See many hedge funds, mutual funds, index funds don’t trade or cant hold smallcap stocks. But they do hold midcap and large stocks. What you have seen this year is many funds liquidated huge amounts of holdings either from deleveraging, margin selling, or just the liquidation of the fund itself essentially driving down many stocks below the 5 dollar threshold. Once it goes below that level many traders will also start to dump the stock as numerous brokerages wont let you hold these type of stocks on margin. Then months later when the Russell or any other index ore even an etf does its rebalancing it drops the stock out of its collection which then starts more forced selling. Next a mutual fund that is supposed to mirror said index will also have to sell….which means more forced selling. It’s a never ending cycle of selling. This type of forced selling can make a stock excessively oversold. Just when these type of stocks rebound slightly comes tax loss selling. As this was a great year for many investors many will unload their dogs to offset their ridiculous gains for the year. People will sell their biggest percentage losers to offset their capital gains this year.

Short sellers themselves this time of year will prey upon these stocks as they know that many longs have to unload them. If they can apply pressure on many of these weak stocks the volatility of the drop can be tremendous

These stocks can pop for a few different reasons

Shortsqueeze: You can get short interests data from shortsqueeze.com it will give u the interest and the days it takes to cover. This is all you need to see how much gas is in the burner. As they have pushed down the stocks for the last quarter January is a perfect time for them to cover their positions since the tax loss selling is over. A big short position can really magnify the gains and make a small cap stock go Parabolic (your getting double the buying pressure). The second force involved in this is the guys like us. The momo traders. Once somebody like me sees the squeeze he goes in and starts buying blocks, other traders see this too and get in for the fun. Now with twitter you get a viral action since people relay the information to each other in real time. The squeezes are much harder and stronger due to the advent of social networking. This squeeze could potentially go on for a week.

Also all the tax selling has subsided. No overhang or dark cloud over the stock. Overtime you will see the stocks drift back towards their natural range and valuation. As over time the fundamentals do play out and stocks will slowly and naturally drift to that level of equilibrium. You will also get the buying pressure from the guys who were dumping for tax reasons but now they want their stock back to get back their money ( most people are frigging banana blowers and cant just let a stock go and take a loss. 90% of traders) So they start buying.

Now you got a booooooooom baaaaaaaaalin scenario. The banana biters who want their stock back, the short sellers covering, the momo traders jumping in for the epic squeeze, the twitter leaches who miss the first 10% of the move but see so00000 many posts on it that they chase the squeeze. And bam there you go a big punch in the nuts to anybody who is still short.

Its already happening look at some of the stocks this week $pip $etrm $ftk $gtxi $rprx $banr a whole host of them are already starting to pop. They got the secret sauce that I listed above.

I have below a list of small caps that could. ( I narrowed it down as it was too long) I have in order from the stocks that experienced the biggest losses for the year on down.

No.	Ticker	Performance (Week)	Performance (Quarter)	Performance (Year)	Average Volume	Volume
1	CORS	0.00%	-55.56%	-96.40%	552.47	0
2	HRZB	-17.86%	-72.29%	-95.15%	167.83	87675
3	PCBC	-9.01%	-39.88%	-93.92%	1529.91	688252
4	RPRX	1.49%	-26.88%	-93.54%	1503.57	1795779
5	STSA	0.00%	-70.44%	-93.18%	1538.27	471840
6	FTBKD	-15.32%	-67.02%	-91.38%	145.45	0
7	CACB	-17.86%	-44.80%	-89.78%	222	141635
8	FRP	0.00%	-9.76%	-88.72%	702.51	0
9	CPF	9.09%	-49.03%	-86.85%	1137.52	380604
10	MDTL	-14.29%	-80.65%	-86.67%	340.19	0
11	CIGX	15.25%	-28.42%	-82.25%	1163.1	791385
12	TONE	9.52%	-79.09%	-81.60%	130.21	59490
13	BOFL	24.24%	-66.12%	-80.52%	103.91	113418
14	CTZN	-8.33%	-44.30%	-79.05%	131.97	46473
15	SQNM	3.67%	22.54%	-78.63%	4901.51	945452
16	FBP	-11.45%	-22.92%	-78.54%	1286.21	1228159
17	BUSE	1.08%	-20.59%	-78.47%	300.41	366407
18	BBX	-1.54%	-57.19%	-77.78%	384.01	158800
19	BEAT	0.86%	-13.93%	-76.19%	686.11	363205
20	ABCW	4.76%	-47.20%	-76.09%	261.08	52103
21	GTXI	12.53%	-68.75%	-76.01%	746.88	1107787
22	UCBI	2.21%	-35.71%	-75.77%	1048.17	918283
23	DPTR	-14.39%	-33.52%	-75.00%	9138.67	5639052
24	SNV	0.98%	-44.20%	-74.73%	19313.16	7021434
25	MTXX	3.17%	-26.18%	-74.35%	417.68	169524
26	JTX	-23.18%	-22.32%	-73.17%	722.43	1822009
27	PVTB	0.44%	-63.15%	-72.07%	2017.72	436489
28	MBHI	2.56%	-47.37%	-71.43%	115.6	95566
29	BANR	14.53%	-4.29%	-71.24%	312.84	186679
30	CBC	13.00%	-22.60%	-70.76%	150.87	289636
31	PACR	2.90%	-14.25%	-69.42%	715.8	278157
32	AMFI	-27.39%	-29.63%	-68.51%	476.88	551736
33	RZ	11.32%	-23.87%	-68.36%	730.01	5146220
34	CATY	4.21%	-7.02%	-67.17%	1256.98	567517
35	CTBK	-2.82%	-34.85%	-66.92%	109.63	72317
36	SMTB	7.36%	-55.33%	-65.99%	114.77	128841
37	IBCP	4.17%	-59.68%	-64.62%	165.01	79776
38	CHB	0.00%	-58.33%	-64.29%	1531.67	0
39	YRCW	15.73%	-77.80%	-64.11%	9038.14	4860930
40	CT	15.93%	-58.81%	-63.61%	412.14	248930
41	OSIR	2.46%	2.17%	-63.10%	247.89	183139
42	FCF	0.22%	-18.39%	-62.26%	510.37	337786
43	MBRK	5.56%	-51.69%	-62.00%	370.17	378999
44	WAL	3.69%	-40.99%	-61.05%	696.77	278671
45	SUSQ	4.31%	0.83%	-60.43%	905.46	797091
46	HURN	5.56%	-8.31%	-59.53%	545.21	155070
47	HNSN	13.96%	-17.03%	-58.17%	470.02	682072
48	ENER	-3.64%	-11.02%	-58.03%	2595.38	1910405
49	NPBC	4.96%	-4.67%	-57.65%	1586	962620
50	PGNX	1.85%	-19.08%	-57.23%	158.67	70339
51	CHP	-8.11%	-36.74%	-56.55%	210.84	166842
52	HNBC	2.37%	18.86%	-54.36%	208.69	116009
53	PNFP	7.90%	13.67%	-51.46%	265.8	150773
54	STC	10.47%	-10.17%	-51.24%	286.29	131504
55	HBAN	-1.34%	-15.95%	-51.13%	20907.28	6343774
56	DRL	25.00%	-1.06%	-50.00%	167.5	136005
57	QCOR	9.32%	-15.34%	-49.62%	691.08	646856
58	ESLR	7.28%	-17.77%	-49.22%	3004.18	4505581
59	RAS	-2.19%	-56.35%	-48.46%	746.69	1447906
60	STBA	2.20%	35.09%	-48.33%	135.7	66148
61	PCS	2.12%	-19.85%	-48.08%	8848.28	2216861
62	EBS	8.00%	-23.12%	-47.80%	340.66	143085
63	ZION	-3.48%	-29.87%	-47.66%	6244.31	2791898
64	LDK	0.43%	-21.71%	-46.42%	4712.92	1805508
65	ABMD	3.51%	-11.16%	-46.16%	237.3	181399
66	FTK	34.31%	-32.51%	-45.63%	568.81	730663
67	NWBI	-0.27%	-51.17%	-45.13%	559.95	1999643
68	GMXR	-3.90%	-7.38%	-44.51%	1174.94	347871
69	VLNC	10.99%	-44.51%	-44.51%	797.3	8321605
70	DRYS	-1.17%	-12.92%	-44.37%	20981.83	7099190
71	FMBI	1.18%	-2.63%	-44.06%	542.55	244422
72	ASBC	5.18%	-0.09%	-43.83%	1795.44	795014
73	DSCO	-4.55%	-43.24%	-43.75%	4940.19	2216707
74	FNB	-1.84%	-1.84%	-43.69%	728.72	425913
75	BBI	2.90%	-39.32%	-43.65%	2426.3	1105550
76	WL	-0.32%	-11.60%	-41.81%	761.04	384809
77	WTNY	1.31%	-4.33%	-41.75%	1230.41	287874
78	HAFC	-1.61%	-26.06%	-40.78%	400.62	300762
79	JAKK	-1.69%	-15.96%	-40.77%	344.76	182254
80	LAB	4.03%	-20.67%	-40.71%	393.47	121739
81	CUZ	-1.29%	-11.84%	-39.89%	1059.44	694608
82	SUN	-1.62%	-8.05%	-39.16%	2880.98	1665066
83	WNR	0.00%	-26.77%	-38.66%	3316.02	1398237
84	SPTN	3.86%	1.06%	-37.80%	158.89	57358
85	WINN	-0.50%	-29.27%	-37.70%	420.2	322613
86	LCC	5.43%	-0.41%	-37.26%	9749.65	8448132
87	MATK	4.87%	-17.72%	-36.72%	406.38	201617
88	AOB	-1.14%	-11.59%	-35.94%	1003.52	2016246
89	VPHM	0.72%	-15.15%	-35.48%	1073.86	405248
90	ABK	5.00%	-52.81%	-35.38%	17183.4	4003341
91	CCRT	0.66%	-23.94%	-35.38%	211.88	173298
92	SPWRA	-2.04%	-21.12%	-35.11%	2467	1341832
93	EK	0.00%	-12.93%	-34.50%	6834.25	1574814
94	LEAP	-1.07%	-11.13%	-34.36%	4002.14	1130018
95	IMN	-1.11%	-7.36%	-34.12%	286.81	220443
96	FLWS	12.00%	-28.21%	-34.03%	188.56	107982
97	UBSI	5.76%	6.31%	-34.02%	321.06	347812
98	ABR	16.07%	-33.45%	-33.90%	145.84	80471
99	LPHI	2.70%	23.15%	-33.29%	100.92	125041
100	DAC	-1.09%	-6.19%	-32.69%	179.65	71691
101	RST	0.00%	-26.82%	-32.32%	194.35	514157
102	ALY	7.18%	-14.06%	-32.18%	467.25	187143
103	HOTT	7.11%	-17.47%	-31.72%	1324.93	561611
104	MGM	-1.16%	-24.54%	-31.61%	26961.43	10566678
105	AVD	2.69%	-8.13%	-31.10%	100.62	91357
106	TRST	-3.09%	-1.26%	-30.56%	263.91	225987
107	RF	-2.19%	-16.77%	-30.48%	30219.44	10357782
108	CONN	5.36%	-47.70%	-30.42%	294.85	222896
109	LMNX	2.95%	-14.27%	-29.68%	326.3	113181
110	CXM	0.00%	-70.06%	-29.33%	1464.74	2696966
111	STI	-3.16%	-8.78%	-29.15%	8506.59	3490376
112	FR	5.11%	-9.17%	-29.14%	1032.89	459928
113	CMED	-0.50%	-15.03%	-28.54%	514.58	389421
114	KNDL	3.82%	8.07%	-28.11%	189.49	75975
115	ONB	3.80%	14.57%	-28.07%	951.26	928686
116	FTEK	-4.13%	-31.97%	-27.67%	180	428699
117	SUF	-10.53%	-53.42%	-27.66%	427.98	394956
118	ISYS	5.95%	23.86%	-27.63%	124.4	49468
119	MBFI	3.34%	-3.18%	-27.39%	452.89	155549
120	AMR	1.70%	-2.88%	-27.18%	15568.31	7841384
121	ALNY	4.71%	-22.29%	-27.13%	282.58	103191
122	XNPT	7.25%	-14.95%	-26.28%	357.23	279427
123	PFS	-0.28%	4.23%	-26.23%	359.98	140683
124	TBSI	-2.37%	-15.33%	-26.22%	273.27	186020
125	EGLE	1.20%	-2.50%	-25.81%	2770.69	1075396
126	PRKR	5.14%	-55.88%	-25.51%	309.46	453306
127	GB	1.65%	-13.38%	-25.40%	197.16	144622
128	COGT	5.70%	1.29%	-24.83%	671.63	298288
129	GBCI	1.92%	-6.18%	-24.81%	737.52	283423
130	ZLC	-6.99%	-66.62%	-24.02%	973.49	3177037
131	ACAS	4.60%	-24.24%	-22.84%	4745.13	4624702
132	BLUD	5.91%	16.52%	-22.50%	582.99	263170
133	TLT	-1.20%	-7.94%	-22.45%	3520.95	1919066
134	PSYS	0.14%	-18.51%	-22.41%	1223.78	353290
135	JBLU	0.36%	-6.59%	-22.11%	6642.96	6527411
136	CVBF	7.77%	14.29%	-21.76%	1117.38	1078253
137	ISIS	10.76%	-25.02%	-21.58%	1465.4	823199
138	VLY	2.98%	16.69%	-21.43%	917.94	317324
139	GMR	-1.40%	-8.32%	-21.23%	948.53	447316
140	CMTL	3.23%	8.60%	-21.21%	292.91	251792
141	AKRX	-2.67%	30.00%	-20.87%	440.6	168684
142	CBST	2.03%	-6.36%	-20.82%	820.21	297407
143	PACW	10.88%	5.29%	-20.59%	290.08	226762
144	BRNC	-2.84%	-23.74%	-20.43%	336.12	138464
145	VMC	4.51%	-1.49%	-20.42%	1123.71	652703
146	GVA	4.05%	14.94%	-20.38%	691.16	205405
147	APOL	5.52%	-15.96%	-20.36%	3351.2	1166411
148	JEC	1.99%	-17.24%	-19.98%	2261.3	1093426
149	REG	3.58%	-4.26%	-19.85%	1464.76	514732
150	TRE	10.65%	20.77%	-19.29%	428.78	214170
151	BKC	2.15%	11.82%	-19.27%	1750.51	694240
152	UMBF	1.94%	-3.03%	-19.18%	160.89	123942
153	CEPH	4.25%	7.16%	-19.15%	2256.35	902273
154	TPC	4.45%	-8.87%	-18.73%	257.32	165155
155	AVAV	3.06%	6.24%	-18.61%	160.8	100161
156	KIM	5.16%	4.45%	-18.43%	8055.72	3083379
157	TGIC	-11.43%	-76.87%	-18.42%	171.67	0
158	AF	0.95%	13.66%	-18.29%	1081.2	718395
159	TITN	5.20%	-4.86%	-17.92%	213.85	168523
160	PMTI	4.64%	-41.03%	-17.87%	172.33	192052
161	EMKR	-1.83%	-20.15%	-17.69%	679.41	2245486
162	TASR	-2.03%	-9.75%	-17.61%	447.75	388919
163	MIR	0.58%	-6.37%	-17.49%	1604.9	596123
164	WTI	-1.44%	-1.77%	-17.42%	721.42	384581
165	SGMS	0.00%	-9.48%	-17.27%	1182.07	345595
166	CVA	3.64%	6.00%	-17.08%	1110.85	930007
167	ALJ	-0.80%	-24.24%	-17.00%	183.51	1085561
168	THOR	-1.28%	-11.79%	-16.65%	845.97	556191
169	HAWK	2.45%	-31.62%	-16.42%	129.08	64794
170	TWGP	4.50%	-5.49%	-16.05%	305.96	138370
171	DCGN	-11.11%	-68.63%	-15.79%	3889.96	1777191
172	COCO	3.92%	-25.42%	-15.76%	2731.04	1299442
173	BEBE	2.84%	-19.05%	-15.62%	704.59	495937
174	ARNA	-5.88%	-21.43%	-15.59%	2311.05	2637792
175	CYPB	-2.53%	-29.82%	-15.35%	341.53	356794
176	BPFH	0.88%	-13.25%	-15.17%	661.05	468520
177	RRR	-0.14%	-0.68%	-14.91%	578.62	190844
178	EPIQ	5.32%	-3.59%	-14.72%	289.71	105560
179	ONXX	2.60%	-8.76%	-14.37%	1154.31	428041
180	CBU	1.69%	7.48%	-14.27%	167.78	97953
181	PVA	2.04%	-5.01%	-14.26%	524.97	284581
182	ELY	1.94%	4.10%	-14.18%	1102.71	479861
183	ASTE	3.82%	4.54%	-14.08%	197.31	83259
184	NLS	-6.40%	11.76%	-14.03%	111.54	142052
185	MBLX	-2.32%	6.73%	-13.92%	165.13	142557
186	GDP	2.58%	1.02%	-13.82%	914.46	605838
187	MMR	12.67%	10.17%	-13.78%	1810.37	2332246
188	PNX	-3.40%	-13.94%	-13.15%	1458.14	554634
189	USU	-4.18%	-18.75%	-13.14%	1638.14	1117145
190	SONC	2.81%	-4.33%	-12.82%	600.35	424504
191	MYGN	8.49%	-4.34%	-12.75%	1459.2	314254
192	KSWS	3.52%	10.50%	-12.28%	119.63	80211
193	TOL	2.39%	-5.71%	-12.18%	4268.49	1170936
194	HW	-1.66%	49.37%	-12.15%	1194.7	2245220
195	VIVO	0.79%	-14.04%	-12.02%	221.6	179353
196	ECHO	-3.19%		-11.52%	214.54	16028
197	AGP	-0.11%	15.85%	-11.38%	721.73	711553
198	STXS	-4.88%	-13.33%	-11.36%	299.57	248451
199	ESE	-1.78%	-9.64%	-11.18%	228.52	105023
200	WTR	0.62%	4.05%	-11.12%	1407.06	899892
201	IBOC	5.11%	14.86%	-11.08%	386.1	308191
202	WBS	0.00%	-2.48%	-10.81%	718.25	403830
203	HAIN	9.64%	-12.56%	-10.63%	497.2	361099
204	IAT	-0.38%	-0.05%	-10.53%	157.03	47033
205	CRK	0.33%	4.32%	-10.52%	658.32	326231
206	OPTR	-2.43%	-20.82%	-10.49%	184.92	274189
207	ALKS	2.03%	1.16%	-10.23%	919.13	1061760
208	JACK	0.91%	-3.30%	-9.78%	765.39	287892
209	AFAM	3.86%	34.70%	-9.74%	162.31	100399
210	SVU	-0.24%	-15.91%	-9.59%	4228.5	1829728
211	ERII	-3.38%	14.91%	-9.50%	357.91	291690
212	SKH	1.46%	-7.62%	-9.48%	139.01	58115
213	LNG	-0.77%	-13.13%	-9.47%	554.02	485837
214	UCO	14.35%	22.34%	-9.20%	4866.17	3475178
215	SRDX	-3.69%	-5.90%	-9.18%	139.92	56269
216	EXM	-5.19%	-3.47%	-9.09%	2001.61	696890
217	INWK	3.83%	24.63%	-8.85%	156.07	112326
218	CMLS	0.00%	29.71%	-8.84%	150.86	48825
219	SMBL	5.98%	1.47%	-8.82%	539.87	319212
220	PHM	5.84%	-12.31%	-8.78%	7747.32	4039398
221	SBIB	5.05%	-26.29%	-8.46%	989.18	922290
222	APEI	3.99%	-0.73%	-8.17%	173.04	143384
223	MHGC	-4.04%	-25.04%	-8.15%	301.74	122373
224	SWY	1.85%	8.77%	-8.06%	5600.74	1829357
225	OPEN	-0.97%	-3.50%	-7.91%	135.84	53013
226	HOMB	3.97%	12.23%	-7.73%	111.63	76859
227	CNVR	0.00%	-4.00%	-7.69%	106.76	8400
228	CCC	2.21%	-6.47%	-6.77%	735.01	1063645
229	PARD	-5.26%	-75.94%	-6.74%	3233.05	1953737
230	HEV	8.46%	-3.75%	-6.71%	749.21	1450982
231	PQ	-2.77%	1.12%	-6.66%	1623.84	572120
232	CLH	-0.79%	4.57%	-6.51%	169.21	108589
233	AOL	0.73%		-6.46%	3940.56	1714166
234	FORR	4.25%	0.88%	-6.13%	101.71	50513
235	UMPQ	4.72%	26.38%	-6.13%	1066.33	1077714
236	IRM	-0.73%	-14.50%	-6.07%	1236.54	901020
237	FCEL	29.89%	-14.92%	-5.93%	774.15	7465936
238	STEM	-0.78%	-22.42%	-5.88%	2834.13	1041782
239	WMGI	2.67%	6.83%	-5.82%	390.3	130691
240	FULT	1.25%	20.76%	-5.82%	1308.1	517270
241	NUVA	7.05%	-18.64%	-5.37%	1088.79	462842
242	FTO	3.25%	-14.17%	-5.24%	2806.01	1797449
243	ROYL	-2.21%	26.67%	-5.00%	370.3	102886
244	NAL	0.99%	14.51%	-4.90%	901.32	336241
245	GTIV	2.54%	9.30%	-4.82%	224.98	109371
246	WIBC	12.77%	12.92%	-4.77%	137.25	86490
247	MRTN	0.33%	8.13%	-4.64%	134.95	55639
248	ALGT	-1.66%	21.99%	-4.61%	376.39	188326
249	FRED	2.73%	-19.29%	-4.60%	331.81	259877
250	GAME	-0.19%	-10.61%	-4.37%	2265.13	584078
251	NITE	2.45%	-29.66%	-4.27%	2190.06	1650567
252	PBI	0.53%	-7.55%	-4.23%	1751.13	1778812
253	LXK	1.21%	19.63%	-3.72%	2137.32	525727
254	NAT	-1.44%	2.97%	-3.55%	504.28	266783
255	LHCG	2.12%	15.68%	-3.50%	151.24	78807
256	RGLD	-0.25%	5.03%	-3.17%	731.15	574588
257	ALSK	3.16%	-10.61%	-3.08%	454.89	796008
258	TWI	4.43%	-5.76%	-2.79%	666.29	380067
259	BJ	0.36%	-7.25%	-2.51%	1191.39	1119352
260	CAL	-0.40%	6.60%	-2.49%	7229.1	5168750
261	MLM	1.89%	-0.71%	-2.24%	464.24	376346
262	IDCC	4.71%	15.05%	-2.15%	863.31	416315
263	BRKL	0.92%	0.71%	-1.88%	340.83	144020