Why Smart Traders Take Profits Into Strength

We’ve seen a new trend in premarket runners…

Spike and fail, spike and fail, spike and fail.

Does that mean the supernova summer is coming to an end?

Not at all. Nobody can predict what will happen tomorrow, let alone next week.

But the spike and fail trend means there’s one thing you MUST do…

And it’s true whether you catch an after-hours breakout or a premarket supernova.

What DOESN’T work is holding and hoping.

I rarely sell right at the top (usually I’m WAY too early).

Sometimes I miss the top and have to sell on the way back down.

But you won’t catch me riding the backside of a supernova all the way to a dumb loss.

Or holding through boring, choppy, sideways action.

So, while I still think you should get up early to learn by watching and trading these big spikers…

I also want you to recognize when the trend shifts on any given day…

What Was That About a Morning Supernova?

For weeks (months, even), I’ve been trying to get you to wake up early and take advantage of premarket supernovas.

I can’t tell you how many messages or emails I get from people who say:

“Tim, you can’t trade premarket, that’s insider trading.” No, it’s not.

Most brokers let you trade from 7 a.m. ET. Some let you trade from 4 a.m (but you might have to fill in paperwork).

Even if you’re already savvy and taking advantage of premarket, there’s a guideline my top students and I follow…

Smart Traders Take Profits Into Strength

Remember that most traders lose. You have to study and gain experience.

But if you keep reminding yourself to take profits into strength, it can save you a lot of time (and EXPENSIVE market education).

In my opinion, the best time to be long in this market is early.

It’s when you can take advantage of overaggressive shorts who don’t realize how far these plays can go.

For example, on Tuesday (June 30), 707 Cayman Holdings Limited (JEM) was up 225% by 9 a.m. ET.

Source: Stocks To Trade

JEM 6/30/26 premarket to 76/1/26 premarket, 1-min candle, sell into strength.

But by 11 a.m., it had dropped 46% off its premarket highs.

I could never hold through that. Why would anyone?

Especially when there were opportunities to lock in profits or break even (or take a small loss).

But It Could Keep Going, Right?

Why? Tell me exactly why it could keep going? What’s your thesis?

I see too many people eager to trade with zero idea of how fast these stocks can drop.

Even if you thought it could keep going (which JEM did in after-hours trading), there was no reason to hold through a big loss.

Anyone could have bought the breakout in after-hours.

Remember, these stocks are not investments (99% are terrible companies that will fail).

Short sellers know it. They are toxic and overaggressive, but over time, they take control.

You have to recognize the trend…

Like what happened with Creative Medical Technology Holdings Inc. (CELZ).

Source: Stocks To Trade

CELZ, 6/30/26 premarket to 7/1/26 premarket, another spike and fail.

CELZ was up +462% by 9:54 a.m. on Tuesday. By the end of the day, it had dropped nearly 75% off the high.

Anyone who bought early could have sold for a win, break-even or a small loss.

Anyone who bought the spike and didn’t get out … became a bagholder.

Here’s one more example…

Source: Stocks To Trade

EHGO, 7/1/26 premarket to market open, spike and fail.

Eshallgo Inc. (EHGO) has been spiking (and FAILING) every other day for the past two weeks.

Which means there’s NO EXCUSE for holding it any longer than it takes to either lock in a single, or cut losses quickly.

Hold and hope is NOT a strategy.

So, what’s the answer?

I keep trying to get people to get up early and take advantage of these supernovas.

At the same time, you MUST take profits into strength. Even tiny profits, over time, add up.

If you have ANY questions about this pattern, please, I implore you to…

Study the 7-Step Framework

I wrote about the 7-step framework here.

Remember, it can play out in different timeframes.

In this market, the entire 7-step framework can play out in a matter of hours.

There’s no giant hot sector or theme in the market right now. You just have to take whatever runner you can, for however much you can.

Try to take profits into strength. Do NOT hold and hope.

And STUDY the 7-step framework. Once you see it, you can’t unsee it.

Remember, even if you miss a play, learn from it and try to do better on the next one

The good news is, this market gives us all near-endless opportunities to try and learn and improve upon.

I’ve had to tell more than one trader in the past couple of days to stop being so desperate to trade.

Wait for good setups.

This week, we’ve seen fail after fail after fail. You have to learn to recognize the trend.

As always, sometimes the best trade is no trade at all…

If you have any questions, email me at [email protected].

Cheers,

Tim SykesEditor, Tim Sykes Daily