Update : "Playing the top"...
Just some quick notes on likely scenario if we are indeed coming to a near term top on the SP500 (and thus, all stock markets) if you were thinking about dumping and shorting....
Aggressive shorting option:
- Using 3453 as the top, and as long as we remain above 3433, we will have selling pressure.
- If you want to short, establish SMALL short positions at 3453 and using "Average to Range" (ATR) which is 40 right now on the 21 setting, double that to 80, and you want to set your short stop loss at 3533 (this gives you a cushion for a higher top).
- Once the market rolls over, keep moving your stop loss on short position down to the previous recent high (currently the June high of 3232 would work)... rinse and repeat.
- Market could rally higher again to a new top above 3500 after hitting the 34 EMA (currently around 3330), that why you want small short positions.
- This is ALL current Wave 5 up move, pre-Wave 2 down move (so, to be clear, not the big move down).
Conservative shorting option:
- SP500 hits 3453 or higher.
- Wait for a drop below 3380-90.
- Wait for a pull higher.
- Then short and set your short stop loss above.
In either case, if either option DOES turn into the big Wave 2 down, you can add to your short positions.
Again, personally, for "shorting," I'll just use inverse ETFs for major indexes/sectors/commodities. I know that some here say ETFs are only for "day trading," but here are the returns on several since buying in on May 19th:
- 50.34% (QLD)
- 60.26% (UCO)
- 72.19% (two different Silver ETFs, but dumped out of both at that return, got back in on one of them which is the 14.55% bullet point at bottom).
- 33.32% (SSO)
- 14.55% (but this one purchased on July 29th)
By comparison, these positions were bought on May 15th:
- 31.12% (FB)
- 17.48% (GOOGL (class A))
- 35.38% (AMZN)
- 13.38% (NFLX)
- 15.71% (JPM)
To each his own... ;)