Yesterday was an awesome day to enter shorts! Did you pay attention to the market, or were you a “paper chaser”?
2) Laggards leading market, leaders taking a break – this is what I call “Paper chasing”, and it increases the probability for better short entry point. (See post 1/6/09 post “Leaders pulling back, time to attack” to see how to use leadership as a gauge for the market)
How effective have these 2 flags been!
Yesterday I flipped my positions and went 100% short when the market was up +140. I even tweeted to the bears to just hang in there. 3 of my shorts from yesterday are down over 8% today. Not bad, eh? It would have been 4 stocks if I didn’t get stopped out of DRYS yesterday near the close (stop was set to 15.15. Idiot.)
HOWEVER, look at the leaders today, they haven’t really continued selling off. If they were, I would add to these shorts. And volume was actually better yesterday on the Nasdaq’s rally. So, respecting that action I will cover at least two of my shorts, APEI because STRA is green today, and EGO because it’s near my buy point (under 7). I will also cover EDU which looks a little panicky.
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