Time To Start Shorting….

Jim Cramer states “there is always a bull market somehwere…”

He might be right, but now isn’t the time to be long if you want to make money. Let’s take a look at a few factors that veritably ensure the market will continue to drop through the end of the year.

  1. Interest Rates – With housing, credit, jobs, and the economy struggling, it is highly unlikely that the Fed is going to budge on interest rates.
  2. The U.S. dollar will continue to be very weak, F
  3. Food and oil prices will continue to be high. Yes, I know oil pulled back to $123 this week; almost $24 from it’s high. While that seems like quite a bit, oil is still $50 over valued, and isn’t likely to get much lower until our dollar can buy more of it.
  4. This means less cash for consumers, more bad economic news, and a weak stock market.

All of this considered means it’s time to make money on the short side. While shorting is probably something many of you have never done before, it is a viable way to make money in a struggling economy. It can also be a very bumpy and stressful investment tool as short covering can come hard and fast.

Finding Sectors, and Stocks To Short

I am going to be writting a series of strategies for finding good sectors and stocks to short, and am going to start today with two good stand-by methods for finding individual stocks:

  1. Screen for stocks in which price has crossed below the 200 day Moving Average
    1. This is super easy to find. Microsoft has a screen for this here
    2. Enter symbols from the search into this analysis tool:
  2. Stocks whose 50 day MA crossed below the 200 day MA
    1. Open This Link: StockFetcher.com
    2. Enter this into the Stock Filter Text:
      Show stocks where close is above 5
      and average volume(30) is above 250000 do not draw average volume(30)
      and MA(50) crossed below MA(200)
      and draw MA(20)
      and draw Bollinger Bands(20)
      and draw MACD(12,26,9)
      and draw ADX(14,14)
    3. Click on Fetch Stocks in the Lower Right Corner
    4. Enter the symbols found from this search in the Analysis box above

I will be creating a video for using these screens and what things to look for when chosing stocks to short. Look for it comming soon

Popularity: 1% [?]

Print Friendly
Tags: ,