Rule #1 in the short sellers handbook says “Ye shall not short boring stocks that do not go down, especially when they should.”
If something doesn’t seem right, that’s because it isn’t. Had you listened to the advice in rule #1 in the short sellers handbook — you would’ve saved yourself a small fortune over the past 2 months. Sure, stocks “should’ve” traded lower — but they didn’t. Here we are in a boring Friday, post massive melt up, and the Dow is off by 120. But the VIX is flat, in spite of oil down 5% and the smallest of the smallest of caps are still catching bids. Dare I say this market does not want to trade lower?
I really want it too, especially since I have a 15% position in SOXS. Today is a Friday we all know markets do not bottom on Fridays — but the morning move has concluded and if we’re going to trade lower — it won’t happen now. If it does, it will trade lower after 3pm.
Ergo, time to cover said shorts and look for some reversal to the upside trades. What else is new?If you enjoy the content at iBankCoin, please follow us on Twitter