Why I Rarely Short Anymore


“The price pattern reminds you that every movement of importance is but a repetition of similar price movements, that just as soon as you can familiarize yourself with the actions of the past, you will be able to anticipate and act correctly and profitably upon forthcoming movements.” – Jesse Livermore

Everyone has had their boxers in a twist this month. The world was ending yet again and everything had to be sold. Either you sold or went to cash, if you did you missed a mega rally. I don’t care if volume sucked, volume has sucked since the age of Pericles (or at least the last few years).

Back in the halcyon days of 2008-9 I woke up short and went to bed short. Sure I had an occasional morning gap up to deal with, but for the most part it was easy money because we on the precipice of the apocalypse.

It has become so much harder to short successfully and I have that DNA. I like to play both sides. Now I’m just more comfortable holding some cash if I’m scared or confused. June was a great month because I bought the fear and the nonsense. I’ve seen the Europe movie before.

A wise man once told me not to fight the Fed. He was right. There is a bid underneath this tape at all times and sell offs are brief and shallow, these aren’t good odds for short sellers or perma bears. I play the odds.

As a trader, I probably do as much work as the macro guys who have had paralysis through analysis. I look at everything, NOT just charts. The market is still buying dips (until they don’t).

Don’t get me wrong the apocalypse will come, and I will be able to go to sleep short again. Just not yet.

Have a great Independence Day and enjoy the family.

To see how subscribers did in June, email upsidetrader@gmail to view performance.





Previous Post
Set-Ups For the Week of 7/2/12
Next Post
Sunday Set Ups For 7/9/12

Recent Articles