Hey everyone, Ross Cameron here! In last week’s episode, I exposed the wild pump and dump scheme behind CHSN, a Chinese stock that shot from around $5 to over $44 in one day, only to tank back to its original level after. The crazy part? That stock is now suspended by regulators. They’re investigating it after I blew the lid right here on YouTube. That’s good news. But what I witnessed today—well—I’ve never seen anything like it in all my years of day trading.
Let’s talk about a Chinese stock that went completely nuts today, with a pre-market move that still has my head spinning. This is a clear example of how volatile and unpredictable the market can be.
A Wild Pre-Market Squeeze Without a Catalyst
So, here’s the setup. Pre-market, I noticed TWG starting to squeeze up, and as a momentum trader, that immediately grabs my attention. A move without a clear reason usually makes me suspicious, but also, it’s an opportunity. The first thing I did was look for a news catalyst—some kind of announcement, earnings report, or anything. After a thorough scan, nothing came up. No news at all. Sometimes stocks will move on what’s called a technical breakout, often caused by a short squeeze. But when I checked the short interest for this stock, it was only 1.6%. That’s nothing. No short squeeze here.
Without news and no significant short interest, the whole thing felt sketchy. Still, as an active day trader, I trade the charts. If the setup is strong, I’ll usually take a shot—but with caution.
Sketchy Price Action and Spoof Orders
The stock was hitting all my scanners: running up, hitting new highs, and leading in percentage gains across the entire U.S. market that morning. But as I pulled up the charts and started watching the volume closely, something caught my eye. Suddenly, I saw a massive 40,000 share buy order at $3. Usually, a huge bid like that makes me think there’s serious buying interest. You could almost consider it like having a form of support under the stock.
But here’s where things got dodgy. In my years of day trading, I’ve seen these big orders put out just to create an illusion of strength—these are called spoof orders. It’s a manipulative move where someone puts up a huge buy order to make the stock look stronger than it is. Then, if the price starts to drop, they yank the order. If you were banking on selling into that “support,” you get screwed when that buyer disappears. That funny feeling kicked in, and I was hesitant to take a trade.
A Closer Look at the Company’s Valuation
What made this all even stranger was the company itself. They make their money from selling wine and caviar—not exactly a booming tech stock or biotech breakthrough. The company did about $2 million in net profits last year, but suddenly it’s valued at a whopping $250 million during this move? That screams overvaluation to me, but like I said, I trade charts, not fundamentals. Still, a valuation like that should make anyone trading this stock pause.
Playing It Smart on the Technicals
I didn’t trust it fully at first, so I passed on some traditional entries I’d normally take. That big 40,000 share order had just thrown me off. It held for a while, then the stock went up to about $4. But when it finally came back down to $3, the massive buyer had vanished. I was glad I hadn’t jumped the gun on it.
There was a lot of choppiness as the stock bounced between different levels. But then it formed an ascending support line, and that gave me a little more confidence. I took a position as it started curling back up, and that’s where I made $5418 before the market even opened. Not a bad start, but I knew this stock had serious risk. I decided to take the money I’d made and be done for the day—especially since it was a Friday. Better to wrap up the week with money in the bag than risk it all on something unpredictable.
The Curveball—A $10.8 Million Public Offering
Then the bomb dropped. Right at 9 AM, news finally hit, and it wasn’t good. They announced a secondary offering of 27 million shares at $0.40 a share to raise roughly $10 million. Now, when a company does something like this, they’re basically dumping more stock into the market, diluting the value of existing shares. Normally, this type of news sends a stock tumbling down to the price of the offering—in this case, around $0.40. And at first, that’s exactly what happened. It dropped from $4.50 all the way down to around $2.70, and I thought the stock was dead.
The Insane Bounce
But here’s the twist that caught everyone off guard: after that massive drop, the stock ripped back up to $5.15—a jump of nearly 100% in under a minute. This kind of price action is unheard of. How did it happen? With no clear answers, I suspected that traders saw the drop and figured it was a chance to buy in for a quick bounce. Shorts who piled on during the drop were suddenly scrambling to cover their positions, adding fuel to the fire.
This was one of the most chaotic moves I’ve ever seen in day trading. A stock that drops 50% on bad news only to double again within seconds? Unreal. And look, I’ve been doing this for a long time, but this kind of volatility makes even the most seasoned traders pause.
Managing Risk in Wild Market Conditions
Look, you’ve got to be smart about this stuff. There’s a lot of talk out there about how some trader might’ve made $160 million overnight on this move. Big money was definitely made, but there’s also big risk. After hitting my goal early, I chose to sit out the craziness that followed. Trusting your gut is key in this business. The volume was wild, but there was an undeniable feeling that something wasn’t right—probably due in part to that secondary offering.
What’s Next for the Stock?
What happens from here? I wouldn’t be surprised if regulators take a hard look at this situation, especially after we saw similar issues with CHSN. A public offering announced as the stock skyrockets? That’s strange, to say the least. It feels like we’ll find out more about who was really behind this move soon. But for now, we just need to watch how it plays out.
One thing is clear: When stocks move like this, you have to know when to step in and when to pull out. For me, it was about locking in some profits and stepping back. The people who held on too long—whether they were long or short—probably got burned.
Final Thoughts
This trade was a wild ride, and it’s a reminder that the stock market can be a crazy place. You’ve got to stay sharp, manage your risk, and know when to walk away. That’s the difference between successful day trading and losing everything. Today’s move was one for the history books, but I wouldn’t touch it again without watching how it plays out in the coming days.
Markets are unpredictable, but managing your risk is always the key to survival in this fast-paced world of day trading. Thanks for reading! Catch you all next time.
— Ross
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Warrior Trading was founded by Ross Cameron in 2012. Today Warrior Trading is a thriving community of thousands of day traders learning to trade under the curriculum designed by Ross
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Disclaimer: The results shared are based on my personal trading experiences and are not typical. Trading involves significant risk, and past performance is not indicative of future results. Always practice in a simulator before trading with real money.