$DEXO thoughts and Watchlist Dec 6, 2011

S&P warns 15 EU Nations on negative credit watch (Article Here). This started hitting Twitter around 12:44, as you can see a sharp drop in the market right after that. Then around 2:15 I'm guessing CNBC finally caught on and caused another sharp decline in the markets. The 2nd drop we rallied back and nearly recovered from, but for me I am bearish going into tomorrow. I just think we see a drop in futures and gap down in the AM. I don't have large statistical analysis computers that compute this for me...for me knowing that the markets absolutely freak out on any piece of bad news shows, and having the S&P threats out there...I just feel like we will see a gap down, or fade away from the open.

I may be biased because I have short positions in $SDS (S&P Ultrashort Proshares), $BAC, and $DEXO (still, yes. Still.)

Speaking of $DEXO, I went to short another 2k shares at $1.82 today. I wasn't able to because the security is now "Hard to Borrow". I called TradeStation and they still didn't have any shares to short that were available. I'm not mad about that at all. There are 2 real reasons why a security becomes hard to borrow after previously being easy to borrow:

• The price to borrow shares has become too expensive, so the shares are labeled hard to borrow. You then have to call in to see if there are any shares ... if you're really set on shorting.

OR

• The shares available to short are now NOT available because so many people are shorting the stock now.

The most probable answer to the shortage of shortable shares is most likely the latter, being as I called in and they STILL didn't have shares to short. Here is a 5 day 30 minute chart:

Obvious resistance at 1.60 today, and that is where I saw massive sell orders as well. I have a goal of 1.35 area if this sucker cracks 1.53 and fails on a bounce. If it really starts selling off, next stop for me will be 1.25 area.

1. HSOL - One of the picks from yesterday is still on watch as it tapped around the 20dma again today. I have learned from @bman_microcaps that plays that tap dma's and hang around that same area have great potential. Right now HSOL is trading between its 20 dma and 13 dma. I decided if this cracks 1.32 I'll cut losses and move on. I dont want to wait for it to drop to 1.12 to pick up agian, it's not a stock that moves fast enough. Also, if you take that most recent big green candle and take a 50% retracement on it you get 1.34. There you have it.

2. MAGS - Not lookin for a play on this one, but I recommended a short on it a few days ago if it stays out of the upper Bolinger Band. Though I can see this one recovering and breaking out, its a good demonstration of a possible strategy in shorting.

3. GFA looks good to add on a 20dma break with volume to confirm the move. This a home builder company in Brazil. Market cap is 1.25 Billion. The beta on this bad boy is 2.58 and short interest is only 3 days to cover, so don't expect a huge squeeze...but if this can break the 20dma with strength then you have momentum buyers jumpin in as well.

4. GBG - This is probably one of my top picks for tomorrow. I like the MACD action, the increase in volume over the past 3 days and close to bustin out of the 8dma and market cap of $392 million. I don't like that beta is only 1.02 and short interest is low, but those aren't essential to make a stock move.

5. GTIV - I like this one on a break of 6.35...day trade it or swing it to 7.40. If this doesn't break out I would say the 20dma will be good support to pick this up ... around 5.52.