reversal of froth
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Desc Frothy stocks often reverse violently. On day 3 or 4 of a frothy run, they could easily sell off big. Anticipate a reversal, especially on day 4 of a frothy run. Don't be discouraged by the strength in the morning. They could still reverse big in the afternoon, around 1:00 PM or 2:00 PM. Once that happens, you don't have to get out at all. The toad usually would sell off into market close. Almost certainly, it'll sell off more next morning.

It's hard to hold for the big prize, though, because these toads easily rebound. It's even harder if you have fought the toad in the last day or two and it has turned your green position into red numerous times. However, it's worth a try holding for the big reversal. The money is fast and good. And the thrill is even better.

Pay attention to volume: a true reversal of froth often comes with big volume, sometimes double the average. Watch how the toad moves after a break-down. If it spikes up and down with not much volume, then it'll probably not going to sell off. If it doesn't have much rebound, chances are good it'd break down again.

Be more aggressive with really extended toads.

Entry If you're brave, short on day 3 or 4 after the toad has gone up nicely on that day. Be more aggressive on day 4. If you're conservative, wait for a break-down after a consolidation near the top.
Exit If you judge the toad is in the middle of a sell-off, stay in as long as possible. The toad is likely to sell off into the close and sell off some more next morning. However, it's reasonable to close the position for the day. You don't have to sleep on any market risk. Besides, the toad often gaps up nicely next day before it sells off more.
Stop Liberal if you entered near the top. Exit at the range top if you entered at a range break-down.

The toad had a big frothy run in the last little while. It was sold off from $51 to $44 a couple of week ago in hours. Today it sold off also this much. It's hard to stay in for such a big move because most of the time, strong toads easily come back from retracement and this frustrates the traders who look for bigger pay-offs. The key, I feel, is to look at the volume. If the volume is low, then the toads probably wouldn't be selling off.

Industry Index IBD Short P/S Shares Float Revenue Cash Debt
Metal Fabrication N/A 2 (12) 0.77 3.38 4960 4600 17.03 6.65 0.01

GHM Y! QQQQ SPY
GHM Y! QQQQ SPY Days Later

The toad had run for 3 days before today. Always look for such a reversal after day 3.

Industry Index IBD Short P/S Shares Float Revenue Cash Debt
Shipping N/A - (-) 15.24 13.13 29078 22850 8.25 7.63 35.76

GNK Y! QQQQ SPY
GNK Y! QQQQ SPY Days Later

The stupid toad, even though a giant one, has almost doubled in about a month. It started this run the day before yesterday on Cramer's pump. Today despite instant reversals in other crazy stocks such as coal and fellow fertilizers, this toad stayed strong with huge volume. Still, it reversed way into the red.

It's a good short at $59. And a safer short when it broke down at $58.60 just before 1:00 PM.

Industry Index IBD Short P/S Shares Float Revenue Cash Debt
Synthetics N/A 6 (6) 1.05 11.53 263196 259090 4.86 0.63 1.97

SQM Y! QQQQ SPY
SQM Y! QQQQ SPY

The stupid toad spiked high despite other fertilizers in the red and the market very weak. Still the spike was worth about $4 on a short. And despite stubbornness through-out the day, it had a big reversal starting just before 3:00 PM. As usual, this kind of reversal often has the toad closing near its day low. Next morning likely will see some more selling.

Industry Index IBD Short P/S Shares Float Revenue Cash Debt
Nonmetallic Mineral Mining N/A - (-) 5.19 25.62 74845 34500 2.91 0.02 1.36

IPI Y! QQQQ SPY
IPI Y! QQQQ SPY Days Later

The stupid gold stocks have been really extended. Gold at $970 may either reverse or stabilize. Even if gold goes higher, the producers may stop going up and could even come down. The stupid AEM had a $5 reversal in about 2 hours. It's a reasonble short at $80.50 soon after open and in pre-market.

Industry Index IBD Short P/S Shares Float Revenue Cash Debt
Gold N/A - (-) 2.62 24.47 143690 143290 3.14 2.26 0

AEM Y! QQQQ SPY
AEM Y! QQQQ SPY Days Later

The toad has been inching up on low volume. It's extremely extended on the daily. Based on past behaviour, it's due for a correction. Stupid stocks often reverse on a strong day in the market. Shorting the opening strength induced by a gap-up in the market is very reliable.

Industry Index IBD Short P/S Shares Float Revenue Cash Debt
Metal Fabrication N/A 1 (1) 13.1 5.25 4990 4796 18.67 8.92 0.02

GHM Y! QQQQ SPY
GHM Y! QQQQ SPY Days Later

The toad has been crazy lately. In such a bear market, it made a new 52 week high yesterday. However, the high came in only at about half the average volume. Today is day 4 of its stupidity and likely would reverse. The market crashed. However, even without the market crash, the toad might still sell off nicely.

Industry Index IBD Short P/S Shares Float Revenue Cash Debt
Basic Materials Wholesale S&P 600 SmallCap 7 (7) 7.93 0.05 29258 27590 674.64 5.71 2.35

INT Y! QQQQ SPY
INT Y! QQQQ SPY Days Later

The stupid toad has been climbing steadily in low volume for a while. In my experience, all such charts result in a big reversal. Today despite a big day in the market, this toad got sold off steadily. It's a good short right from the start. Also a good short when it broke down $46 again after the rebound. As usual, the toad closed near day low and will likely go lower come Monday.

Industry Index IBD Short P/S Shares Float Revenue Cash Debt
Regional Airlines N/A - (-) 15.92 1.91 20337 13640 23.72 6.81 3.45

ALGT Y! QQQQ SPY
SPY Y! QQQQ SPY
ALGT Y! QQQQ SPY