Date: Fri May 20, 2005 3:14 pm
A fairly good strategy means balancing your long trades by some shorttrades. I know most of you hold stocks but have always traded stocks on thelong side. Try shorting stocks to minimize your risk.
Nasdaq has moved very quickly to 2040 which means there might notnecessarily be enough support. 2 possibilities highly likely.
1. Market tanks to 1980's levels cause too much gain in barely any time andthe market over the last 2 years has been extremely cyclical. If it tanks,then your good with your short anyway.
2. Market stabilizes at these levels. Go in and out on the short side whileit stabilizes.Or better put, you can easily time some shorting until themarket stabilizes at these levels. Quick in and out moves means yourinvestment in shorting is higher for good profits. Make sure when you shortyou place limit buy to cover orders to minimize losses.
So there, you have balanced your risk. If market goes higher, your longswill keep you happy. If it goes lower, your first short will come intoeffect and you will actually make money instead of just waiting for yourlongs to go higher. Shorting a stock is not like going long on it. Youshould cover your short in just a few days and make sure you put stop lossesto minimize losses.
One important thing to not about shorting is, that make sure you don't getcaught in a momentum ride. If a stock is really climbing and you think it'sbullshit... give the market the benefit of doubt. Do not fight the market :)
Monday there is no Economic news and so no real factor to make the marketmove in either direction.Some stocks to look at for shorting at current prices:
CKCM, too far too fast
CRM: technicals, 1 yr high and highly valued
IACI: has been steady at 20 - 22 but is at 24 now.
VRTS and SYMC may be if it climbs another 50 cents
