Another day, another penny stick pump falling to the ground.
This week my DMs are overflowing with questions from students Labor Smart Inc. (OTC: LTNC) Warehouse.
At the end of March, LTNC rose from 3 cents to 8 cents – 166% in SIX DAYS!
But as with all penny stock pumps, it was only a matter of time before the share price was forgotten again.
That’s why it’s important to know your story … 99.9% of penny stock businesses fail.
If you know what to look for, the pattern is always the same.
But why do all penny stock pumps fail?
Because the social media hype surrounding penny stocks only exists for one reason: to drive up the price. That gives someone else a chance to sell and take big profits. And if you fall for the hype and shop your way, that’s your money.
That’s why I teach my students always sell in strength … but more on that later.
This brings us to today … when LTNC is down 11% and 51% just this week.
I warned my followers about this in March, and the predictable stock promoters are after me. Check out the tweet below …
To those who are only now saying, do I warn against it? $ LTNC No, here is a tweet I had 3 months ago that accidentally called the top. It’s good to get the hype up, just NEVER believe it, especially when you have as many promoters as that #ltncarmy it just never ends well, NEVER https://t.co/87mKJzoihs
– Timothy Sykes (@timothysykes) June 23, 2021
LTNC is a perfect example of why You should learn to RIDE the hype … but NEVER BELIEVE the hype.
And in this case … the hype is EXTREME.
This company has a legion of FinTwit promoters who are #LTNCArmy (even CEO Joe Pavlik uses the hashtag regularly.)
These hold-and-hopers will do whatever they can to get the stock pumped, even now that it is 85% from its most recent highs.
But don’t get me wrong – I actually like promoters because they create volatility.
Without volatility, the penny stocks I trade would not experience such parabolic upward movements.
You’re doing me a favor and they don’t even notice.
I don’t want them to stop. But I want my students to be aware of the pattern. And now I see it in LTNC again.
Let’s look at what’s going on with this company and see what traders can learn from yet another penny stock collapse.
Fasten your seatbetls. That’s a doozy.
The war within the #LTNCArmy
You may be wondering what Labor Smart Inc. is …
Labor Smart Inc. is a temp agency that recently acquired a company called Takeover Industries Inc.
Takeover Industries is the maker of a brand of hydrogen water beverages called NXT LVL.
But why are LTNC stocks getting destroyed in the past two days?
Look no further than this takeover lawsuit against Stanley Persch (better known as @StanTheTradingMan on Twitter).
The lawsuit alleges that Barsch, a penny stock promoter who was a police officer three years ago, has secured a position as a “stock exchange advisor” with the company … and then continued trading the stock.
The complaint further alleges that as soon as Barsch realized the company was trying to build actual products and not artificially increase its share price, he contacted Danny Day. Day invented some of the technology used to make the company’s beverages. Persch is said to have asked whether Day “had thought of going public with his company”.
This may sound very sketchy to the layperson.
Worse, if the allegations are true, it shows that Barsch’s intentions have always been to make money for himself and never to help the company he “advised”.
Be careful what you see on Twitter and social media … I’ve seen many promoters come and go in my 20+ years of trading.
The key word is ‘go’. They never last long and usually leave their followers holding their bags.
Use this diagram as an example of why it’s important to make a profit, stay safe, and ALWAYS follow your plan! pic.twitter.com/upi9MV1A8A
– StocksToTrade (@StocksToTrade) June 23, 2021
Why transparency wins
Case study, @StanTheTradingMans Twitter account was mysteriously deleted this week.
What a shocker!
That’s why I’m constantly preaching the meaning of Transparency. And for the same reason, I post every single trade I make on Profit.ly. *
Say it with me: transparency. It’s one of my favorite words.
If you trust a self-proclaimed “stock market advisor”, do your research first and make sure it is him transparent with every trade.
Every day I see dealers falling in love with smooth promoters without knowing what these guys are up to behind the scenes.
You can be smarter. Don’t fall for something that sounds too good to be true. Don’t take anyone in this niche at face value.
First expand your knowledge account and then your trading account. You can start with my Pennystocking Framework DVD (the pattern still works 10 years after I recorded it.) It covers the complete 7 step framework my students and I still use for trading today.
Now let’s talk about an important lesson that students can take away from the LTNC saga.
Drive the hype, but never believe it
I say this often and it has to be repeated …
Drive the hype, but never believe it.
What I mean?
Let’s say a penny stock has a big green tag – with a perfectly timed tweet or press release. Then the promoters take to social media to hype this incredible company and new investment opportunity.
I’ll tell you a little secret: it’s not a great investment opportunity and the promoters have no idea what they’re talking about.
Sometimes they don’t even know what the company is doing.
That being said, if you’re new to trading, it can be tempting to get carried away on the hype train. You can see it on Twitter, chat rooms like Discord, and all over social media.
Don’t fall for it!
If you get on the hype train and believe that one of those Twitter pumps is more than just shitty penny stocks, you can end up with worthless stocks and huge losses.
And deep down, your trading instinct is likely to scream. They know you need to unload your stocks. But when you get caught up in the BS, you’re just another hold-and-hoper.
Here’s what you can do instead: learn to ride the hype.
Get in the habit of monitoring social media for those penny stock pumps.
If a name is mentioned over and over again, take a look at the diagram. Keep a close eye on it.
And if you’re lucky enough to get in early and trade a hyped penny stock for hundreds of percent, sell as price and volume are still going up.
In other words, sell in strength. Don’t get greedy.
It’s okay if you don’t nail the tip exactly.
Most successful traders don’t do this, they just book many small wins in a row.
LTNC is like any other penny stick
The #ltncarmy The breakdown is just the latest example of what I ALWAYS warn about, read https://t.co/QTYT7tytOA and check out https://t.co/KhqHFIe64c to learn more. Expect the worst & you don’t have to be naive $ LTNC or $ RSHN $ GGII $ OPTI $ AITX $ ENZC $ OZSC $ VPER $ HQGE $ GTLL Bag holder
– Timothy Sykes (@timothysykes) June 23, 2021
I’m still trying to explain to myself why LTNC has such a religious following on Twitter … In reality, it’s just like any other penny stick.
I know because I’ve seen it countless times … I’ve turned $ 12,415 into $ 7.1 million * by mainly trading penny stocks for the past 20+ years.
The patterns repeat themselves over and over again.
They blow at high volume and longs rush to Twitter to hype and pump.
I’ve seen penny stocks go up 200%, 500%, or 1,000% … every time greedy promoters ask for more. Ironically, many of these “cheerleaders” don’t understand what the company is doing. All they care about is that the stock goes up.
Then I tweet to warn my students about the inevitable crash, and the promoters line up to try to talk or put me in my place. You’re welcome.
It’s good. I’m a big boy … I can take the hatred. What I can’t stand is watching newbies lose money in such predictable ways.
The pattern is always the same … well learn the story and exchange your plan.
Sell in strength and never believe the hype.
What do you think of the #LTNCArmy? Let me know in the comments – I love hearing from my students!
Disclaimer of liability
* Tim Sykes has had remarkable success in stock trading over the years, totaling over $ 7 million in trading profits between 1999 and 2021, but his main income comes from selling financial education products and subscription services offered by various companies and websites in which he has a stake.
This level of successful trading is not typical and does not reflect the experience of the majority of people using the services and products offered on this website. From January 1, 2020 to December 31, 2020, typical users of the products and services featured on this website reported an average of an estimated profit of $ 49.91.