When Do You Go Short?

John Blank


As editor of International Trader, I oversee a herd of volatile and high-flying stocks. We see individual share holdings rip up or down +/- five percent each day.  Oftentimes, intraday moves are even more volatile.

The reasons?  As far as I can figure, over the last 20 years, weaker shorting regulations (getting rid of the uptick rule); trillions of dollars in Long-Short Hedge Funds; and super-fast machine-traded instructions added volatility to share markets.

Take on just for one example.  The current portfolio has a consistent Zacks Ranked #1 or #2 stock that plunged -25% in a couple days during the Muddy Waters shorting exercise on Chinese internet stocks in late October. 

Then it recovered. 

In late January, the very same shares got hit again.  This time, shorts used the shock value of the Argentine peso collapse to get a quick return.

Now, the S&P 500 is pushing up towards an all-time high valuation of 1850.

My RTI question?   When and Where Do You Short This Market?

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