Many “suggested” traders on Twitter urged you to short-sell homebuilders like PHM a few weeks ago. These are the same types of guys who invariably get caught leaning heavily the wrong way at market inflection points, dating back to 2010 at least. As you can see above, though, despite that shakeout (arrows note it) the 50 day moving average was still rising and shorting was a very high risk play. As many traders might sound intellectual, articulate, and seasoned on your local Twitter streams, with their own indicators and methods, the reality is that you are better off not trying to engage in “fancy play syndrome,” such as shorting stocks in uptrends.

While I have been far from all-in long since the spring, I have continued to note the rising 200 day moving average on the major indices as a primary reason to tread lightly, if at all, on the short side. Seeing those shades of gray might not boost your ego or reputation on the Twitter stream, but it sure does put you in a good position with your capital and confidence now to adjust with the market.