Time to short the weak banks and consumer discretionary names

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Subprime JD's picture
Subprime JD
Status: Platinum Member (Offline)
Joined: Feb 17 2009
Posts: 562
Time to short the weak banks and consumer discretionary names

 

 

 

 

In my opinion this rally is done, at least for the weak names. Companies light US Bank, Comerica bank and US Bank could fall at least 30%, maybe even more. Also, some consumer discretionary names such as Macy's, Saks, Borders, and others. Good luck and happy shorting.

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
Re: Time to short the weak banks and consumer discretionary ...

 BMT,

While the indicators forecast a pullback is in the cards, I think its too early to tell if the rally is done, so I'm just sitting in cash at the moment and not trying to short the markets. There have been some reliable indications that this rally could be a new bull market, and that it is likely to resume after a correction. Good luck with your shorts, be nimble in your positions, as the latest Rydex asset flow measures show that many, maybe too many, traders are jumping on the shorting bandwagon.

Just my two cents.Thanks

paranoid's picture
paranoid
Status: Silver Member (Offline)
Joined: Feb 27 2009
Posts: 140
Re: Time to short the weak banks and consumer discretionary ...

I got some SRS and FAZ - inverse ETF's ....so far they are up significantly!

jerrydon10's picture
jerrydon10
Status: Gold Member (Offline)
Joined: Mar 2 2009
Posts: 442
Re: Time to short the weak banks and consumer discretionary ...

I can't see how this rally is anything more than a "sucker's" rally. Things just aren't right for a bull market. Unemployment through the roof.....deflationary economy........bankruptcy everywhere. Who is buying stock, the FED?

JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
Re: Time to short the weak banks and consumer discretionary ...

 Jerry,

I would agree wholeheartedly with your statement, but the market may not agree with me, so I try very hard to put my personal beliefs aside when trading, and see the market for what it is, not what I think it should be. The "tuition" of this market education can be very expensive.

rickets's picture
rickets
Status: Silver Member (Offline)
Joined: Jun 8 2009
Posts: 238
Re: Time to short the weak banks and consumer discretionary ...

 

Re the SRS and FAZ....

A warning about leveraged ETF's.....over the long term they will experience whats been called Beta Decay.  In short, take a look at DIG vs DUG, or FAZ vs FAS......SDS vs SSO.  Notice that over a year, whether leveraged long or short they all have experienced long term massive declines?  This is due to the way they rebalance your position every day.  You may want to consider trading these only for super short term trades or as a hedge, as over the long haul I cant find one thats made postiive returns.

 

 
 
JAG's picture
JAG
Status: Diamond Member (Offline)
Joined: Oct 26 2008
Posts: 2492
Re: Time to short the weak banks and consumer discretionary ...
paranoid wrote:

I got some SRS and FAZ - inverse ETF's ....so far they are up significantly!

SRS down more than 8% in 3 days

FAZ down more than 11% in 3 days.

"Your honor, the people rest."

Jstic's picture
Jstic
Status: Member (Offline)
Joined: Apr 10 2009
Posts: 1
Re: Time to short the weak banks and consumer discretionary ...

FAZ is a stock that should be held for a day or two at the most, and that is pushing it.

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