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seeds Stem thinning problem on young seedlings

So I recently dived into the growing arena for the first time and researched plenty before starting my grow. I have encountered a problem in the last few days with my young seedlings with the stem thinning at or just above the soil level, and on the ones most affected it has thinned most of the stem and has stunted the growth.From looking up topics I think the most closely related problem this could be is damping off which I believe is either too much water or mold/bacterial growth around the stems as a result of too much water.
 
My setup is an outside grow using sunlight with them getting light from around 7am-3pm when they end up under some shade from a corner of the house. For the young seedlings I am not sure if they could also be under some sort of heat shock from too much light/heat. I am not using a fan as I live near the beach giving a light breeze on most days and I water the plants lightly twice daily using a spray bottle, giving them 5-10 sprays leaving the surface of the soil moist, not soaking. The soil I am using is Miracle Grow Organic Choice and I also have, but haven't added it to the soil, vermiculite, peat moss and limestone. I was planning on adding those when I move the plants to larger pots mixing them with the potting mix to cater to the plants.
 
Plants are currently in cups and I haven't poked any holes in the bottom yet as I thought I wasn't watering enough to warrant any drainage.
 
Here are some pics:
 
 
 
 
There are about 4 seedlings with this problem out of the 10 I have growing with the others growing fairly well by the looks of them.
 
So from what I have looked up from other topics on this website I can try a few different things to help rectify the issue:
1. Wet the area where the soil meets the stem with a mild Chamomile tea or Hydrogen peroxide to sterilize and kill off any bacteria/mold which may be present.
2. Change my watering method to placing the cups in a bucket/tray and fill the container with water to about a half way up the soil level on the cups
3. Replant my seedlings in a mix of the potting mix plus additional peat moss and vermiculite.
 
Other things I could try to assist their growth but wouldn't fix the issue could be giving them less sun during the day, start fertilizing (I am going to use a liquid seaweed fertilizer, Seasol) and try a different potting mix more specific to starting seedlings. Although these are options I am not sure about.
 
What do more experienced growers think about my issue and how I can solve it?
 
EDIT: Seems the pics didn't load the first time so here are some links.
http://imgur.com/Sid1xRh
http://imgur.com/QBgx9B7
 
Just embedding the pictures for the fellow up, you need absolute links like www.imgur.com/yourfilehere.jpg
 
QBgx9B7.png

 
Sid1xRh.jpg
 
They probsby won't make it, but on the bright side , your not far along if you start over. I want the best for you.
Happy future growing.
 
Thanks for the replies. Righto it is what I thought then. I still have a bunch of other healthy sprouts but considering trying to get the poor ones back to health could I try adding more soil to bury the stem up closer to the leaves and also try using some tea or H2O2?
 
And with the bottom watering, do you keep water always in the tray so you are topping it up to a certain level if it drops or follow a schedule to top it up every week or so?
 
I have always been a little confused as all I have read was to make sure not to over water without values or amounts, so I was always left thinking how much is too much. So I jumped in and started and if something went wrong I would figure out what to do then. Learn from my mistakes so to speak.
 
it's hard to give a right answer for overwatering because it depends on how much your medium will absorb and how fast it will dry.
 
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