Wednesday, May 26, 2010

Shorting This Rally In The Stock Market


It's just after 11:00AM here on the east coast and I just wanted to give a quick update on the stock market. Stocks are testing the high from 2 days ago but I'm seeing some weakness so I  initiated several short positions right here.. Protective stops are right above today's high for the stocks I shorted. I'll  have more to say about the stock market after the close.

10 comments:

Anonymous said...

Tend to agree with you Kevin. Rally looks shaky and I have my doubts about being long into a three day weekend.

DG said...

Everyone is scared about holding stocks. I take that as a good sign. I am long as of the worst of the previous reversal (5/21) and sold some at 1090 today, but expect us to rally through and go for some weeks. With the McClellan Oscillator near historic extremes of oversold, as were put/call ratios and a few other items, seems like more of a bottom to me. Too, the SPX 200 day line is still trending up and we have not broken the February lows, so we are still in a bull market that I believe has simply undergone a nasty correction. I am longer term bearish, but it seems there's been too much panic lately for that to continue right now.

DG

Anonymous said...

Brilliant call on shorting equity today. I would not have guts to do so today. My money is tied in various energy positions and they did fairly well today considering the dollar/euro and general equity action.
I have to agree with DG that technically this should be a bottom.
Jack

Anonymous said...

On the money, Kevin. Love your analysis. Has your thoughts on UNG changed with today's activity?

Kevin said...

I'm still long UNG with a stop below yesterday's low. I'm not loving this trade but I'll give it a chance to work. I look at it this way, if I am wrong I will lose a small amount of money but if I am right I can do quite well. Lets see what happens.

DG said...

Boy, didn't take long for me to be short-term wrong---but the jury is still out. If we can't rally after a 1,000 point panic, the vix at near 50, and the other extremes we have seen, the next bear leg has started. If so, look out below! A market that can't rally off oversold and when it "should" is in trouble.

DG

704set said...

Here comes your rally on the opening, DG.

Kevin said...

And here comes my destruction!

Anonymous said...

Kevin, I hate to sound critical, but I was sure you took the profit before the close yesterday!
I personally don't daytrade (no time).

Kevin said...

I was tempted to take the profit yesterday but I figured being that the market closed weak, we might get some follow through today.. I was looking for a gap down this morning at which point I would have covered my shorts. I was right about the gap but it was in the wrong direction!

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