Short SIgnal

[Pascal]

Hi Pascal,

I assume there is no such over-ride on your Short Term Trading Stock Selections b/c you have taken short positions in the last few weeks? Can we expect to see the individual stock opportunities lead to a short bias in the portfolio in the coming days?

Any thoughts on the likely success and/or strength of this Short signal?

Shawn

Shawn, whenever there is a short 20DMF signal, I start a short position using an ETF. In the past, I used to buy SDS. These days, I prefer shorting TNA, because small caps will continue to lag as I believe that money moving out of Treasuries will land into the S&P500 linked ETFs.

The reason why a buy a short ETF position on a 20DMF signal is purely psychological. It is not to make money. I do that so that i can control my urge to short if the market goes lower. Shorting a down market during QE has alwyas been leading to losses and my best gains have been when I bought weakness during QE.

Now that I have a TNA short, I do not need to enter new short positions. I already have one. I can hence be more selective and even buy long positions against the short TNA.

Regarding the stock selection, I did not start working on it for next Monday... and I have no way to rating the strength of the short signal.

What I see is that the Jobs market is doing better, that company eanrings are great and that official inflation is below target. So, no need to raise rates for the Fed, but certainly an opportunity to end QE.


Pascal