The market suffered a pretty ugly intraday reversal during the final two hours today and while that is good for those that are short now it is continuing the pattern of keeping shorts too extended to be “safe” shorts for most position investors. However, knowing the facts of 130 years of stock market history, we know that the best time to short is 5-7 months after a stock has topped. Most leading stocks have only recently topped the past 1-3 months and therefore if we are about to start a really ugly downtrend then we have time before the “ideal” shorting moment is upon us. However, there continues to be plenty of other laggard stocks that either topped in October or January when the markets pulled back from the highs and if the market could actually give us a little bit better of a rally we could have a lot more shorting opportunities to select from. Tonight, I do have one new short but you have to realize that it is not like the price has failed at a low volume bounce at the 50 day moving average and is now breaking below the 200 day moving average. Those are the best setups. This stock did bounce around a bit and is now only refailing at the 200 day moving average. What makes me like this as a short is that the 50 day moving average has rolled over quite heavily and is rapidly approaching the 200 DMA and the price of the stock from the lows to the current price is still up a whopping 4,500%+ giving us much room to the downside if it decides to crack wide open. I also have three early/speculative shorts for Platinum subscribers if some traders would like to increase their exposure to the short side here.
new short position: HGSI
HGSI is reversing at the 200 day moving average, after a low volume rally, closing near the lows of the day, on quite strong volume. Cut your final loss with a close above the 200 day moving average, if the stock does not move lower immediately.
