What's Been Weak Still Remains Weak
As you already know I exited my long DIA position on Friday and I added to my short position today. I have reits, airlines and now I have utilities short.
If you look at the top chart of the utility index (UTY) you'll notice that the 20 period moving average has done a great job at providing support and resistance for this index. This looks like a swing trade to short off the 20 average and that is why I shorted a few utility stocks today.
I still have the reits short and I added to them today. If you recall I covered some shorts at a profit last Tuesday when the S&P hit its 50 day moving average..Now I'm putting those shorts back on.
Even though I am cautious on the market as a whole due to what bonds have been doing recently, I am still not shorting the actual market itself...in fact, last week I bought DIA...What I am doing is shorting the weakest groups such as airlines, reits, homebuilders, utilities... I still see pockets of strength in this market such as oil stocks, FXI, ILF, EEM etc....so it's very important if you do decide to short that you are shorting the weakest groups.
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4 comments:
What about semiconductors, weak group, uh?
Sure, shorting the market is very bad idea, all energy, mining and resources are doing great, any short position must not contain any of those
I'm not touching the semis...They are a waste of time.. I think the groups affected by interest rates are much better to trade.
Kevin:
great to know you had some nice trades..
i wanted to know how you track gains/losses for tax purposes.
do you do it yourself on spreadsheet or use some software//i use IB as my broker/
thx
Semis are actually outperforming the market. They are up 16% fro the mar. bottom while th S&P is only up 12%. Probably not a good short idea.
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