Right now, going short this market has been very hard and trying on the soul as for the first time in my life that I can ever remember I am batting under 50% for my current round of shorts since the November lows. For instance, recently, I took seven shorts on a breakdown in the market. Those seven shorts are all working and in good shorting positions but this morning I closed out TRV, BRO, PRSP, and CFR. CFR I am OK with covering because that could have turned into a nasty loss had I not covered and just took the 2% gain. PRSP I am OK with too as it took out the 50 day moving average on way too much volume and way too strong of a move–so this was no big deal. The TRV short cover bothers me a little. Why? Because even though it did hit my full cover area with the close over the 50 day moving average on strong volume a day after a very bullish session on strong volume. This gave the chart a VERY bullish appearance on a 2-day chart on my Telechart. However, this AM the open indicated that it would open below the 50 day moving average. So instead of holding off on the cover, or just covering some since it is now back below the 50 DMA, I let the fear of the MARGINAL close above the 50 DMA on 1/28 scare me out. Lesson learned. Now the short cover I am upset with is BRO. I gave the FULL cover on BRO with a CLOSE above the HOD of the day I went short on 1/20. So with me having a four day gain of 7% right after going short, I was in the clear. But then on 1/28 the stock gapped above the 200 DMA then closed above the 50 DMA. Even though it was ONLY A PARTIAL cover, I let the fear of a potential short-squeeze SCARE me out before MY SET full cover signal. Now the stock has a gain of 4% for those that are still short from my short call. Congratulations if you held on correctly, unlike me. As for our new long, RNT is a very great short signal as it is rolling over and breaking down below both key moving averages on strong volume. The only problem: no red BOP! There is always something that prevents EVERY short I take from being a “perfect” short. From 2000-2002 this was never a problem. Now it is ALWAYS a problem. So keep your short within reason, even though this is a nice setup, and remember cash is still king!
new short position: RNT
RNT is breaking down below the 50 and 200 day moving average, on very strong volume. Cut your final loss with a close above the 50 day moving average, if the stock does not move lower immediately.
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