ETF Proxy Shorting the Market

I can safely say that shorting at the right time, right place, can yield huge gains.  However, math isn't on your side.  In post "this time its different", when the market falls, valuations drop around 50%, but gains are over 100%.   To properly short and gain valuations requires a commitment of time and careful positioning.

I do not have the time, nor the desire to embrace shorting the market as I did in 2006-November 2008. (I couldn't short Dec 2008 to march 2009, I didn't have the guts)

Aside from simply buying fixed income, which by the is the safest play normally, there is an alternative.
There is an ETF called HDGE that manages active shorting.  Meaning, they change their composition and try to remain nimble.  The fund was made public in 2011, and has wiggled around since then.  It's valuation isn't impressive.  Then again, the SPX has moved from 1300 to 1450 in the same time period, (up 11%).

So purchasing HDGE is pretty risky.  But I wanted to share with readers as I am buying some shares the last two weeks, and I'll follow up with some posts as the market develops.

HDGE is available recently around $20.50, I can reference this post in the future.

To find out more about HDGE, here are some handy links.

HDGE fact sheet, video, and current shorting macro allocation.

Short idea - Buffalo Wild

I have learned my lesson about shorting, its for truly brave, stupid, or lucky. When the world wants stocks to go up always, its tough to bet against the world.

One of the rare shorts I have left, and my biggest, (no not DECK!) is BWLD. Recently it has been giving me love, something I haven't gotten from a short in years!

But it is at an interesting chart support level. If it hits say...40 bucks a share, pretty good chance it will take the express to 35, if not lower.

See chart below. This is not a recommendation to buy or short, just a chart observation for the brave, stupid, or lucky. :)

Also check out XTrends post on their call time to short the market.

This Week in Charts

rket continues to look weak. It better close higher this week or I think quite a few market watchers may throw in the towel for another leg down. SPX 950, which would be ironic, since I started shorting it there back in August 2009!.

Anyway, this week in charts. Use the charts to gauge for yourself the likely future trend.

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

From WebSufinMurfs FinancialBlog2

Stock Trader to watch

There are tons of 2 bit (like here) blogs where plenty of BS for stock trading is available.

But there is a bottom line, and that is, what is the RECORD of the trader.
My record for 2007-2009 spring was pretty darn good. Not so good since July.
But I'm not going to go into detail.

There is a site called KaChing where traders can tie their trading to the web site to have verified positions and results. Basically put up or shut up. The site is pretty interesting.

One trader I have been half watching for a year now is Atilla Demiray of blog xTrends. He is a "bear" on the market, but to his credit will flip sides as he see's fit. But definitely leans towards shorting.

Atilla is up 60% since September, not too shabby. As of this blog entry, he is down about 3 million on his most recent positions (wow), but I guess when up 60% and trading capital of 40 million, all in a days work.

Better yet, find a KaChing designated "genius" and you can setup your interactive brokers account to mirror the genius traders moves automatically! Who needs a stock broker giving advice "do as I say not as I do"? These guys show the money they risk, proving their personal conviction. All of this is high risk, of course, but interesting none the less.

Adding shorts back on

Unfortunately for me, my job will prevent me from checking stocks all Tuesday, which is very very unfortunate. Tuesday the 17th marks what from a charters perspective is the turning point for this ridiculously high move we have seen.

So let me share my plan of losing tons of money with you.

I'll wake up Tuesday AM, check the markets, if down substantially, I'll put some orders in to get into the short side. If the market is flat-ish or up, my orders will trigger on S&P 500 hitting 1120 (1121 is target) to hit the bids on some shorts, and inverse funds. I can do this though Interactive Brokers, which allows trigger orders based on any fund or index.

So if the markets blow right through S&P500 1120 tomorrow, you can just imagine how bad of a day my account had. However, if you are able to watch the screen and you see the markets turn, jump on board.

Target is for S&P500 to resist falling below 1,000, we'll see. The market still goes higher with a lower dollar, god help us all when a weak dollar brings the market down, and a strong market brings the dollar down, then, there is nothing left to counter the stock market slide.

Good luck, and I went flat the gold miners today, GDX at 51.25.

All of this is subject to change, without notice. :)

Home Builder Short?

The Housing market has way too much inventory, and prices are dropping.
Home builders kept on doing their job....building houses.
They where beat down hard in stock price, but recently rebounded significantly.
I don't believe sky is the limit for them....yet. We need to eat away at the multi-year excess built up in houses and free up lending.

Toll brothers, Centex, KBHome and others have recently rallied. But I like Toll brothers as a short.
Toll is probably not going to zero, but I doubt their stock is poised for a rocket ride.
So a short at 25 buck, if/when we hit it, and a "cover" of 26-27, so 1-2 buck risk if wrong. Otherwise target cover at 15, 2 buck risk if wrong, 10 buck reward if right.