So here you are, champing at the bit to short because your favorite blogger who has been bearish since 2011 has been on fire this year. You see the DOW down 300 points, and you are completely convinced that this 2008 all over again. Well, shorting is just not the opposite of going long, the dynamics are entirely different, and the last thing you want to do is short in the hole or short an oversold market (presently I don’t think we are oversold).
Here is one significant fact about shorting in bear markets:
The biggest rallies happen in corrective/bear markets, exactly when bears should be making a killing. The minute you get overconfident that this is the end of the world you get a mere 3-5 days dead cat bounce that wipes you out. If we are truly in a bear market that bounce will fade and lead to lower prices, be patient, short the rips.
This information is issued solely for informational and educational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. None of the information contained in this blog constitutes a recommendation that any particular security, portfolio of securities, transaction, or investment strategy is suitable for any specific person. From time to time, the content creator or its affiliates may hold positions or other interests in securities mentioned in this blog. The stocks presented are not to be considered a recommendation to buy any stock. This material does not take into account your particular investment objectives. Investors should consult their own financial or investment adviser before trading or acting upon any information provided. Past performance is not indicative of future results.