No New Short Positions For Monday’s Stock Market Session

December 28, 2007

There were no new shorts to take tonight as the majority of stocks that had any volume to them were already down over 25% plus from their tops. There are a few stocks that I am watching right now for potential shorts in the future that were in the high priced scan. The cheapest one here is $86 which tells us two things. 1) If these stocks do setup and breakdown from nice short patterns, this stock market is going to be in trouble as they are all leaders in their groups. 2) And if they do breakdown they are all going to produce for us some huge gains because having all of these leaders break down (they are creating similar topping patterns!!) in all these different sectors would indicate major weakness in the economy. GRMN LLL FLR CEO and CHL are all stocks I want to short and all of them are worth watching here for short entries. Some brave souls can test the waters but I am not a big fan of ever shorting a stock before it is below both 50 and 200 day moving average. “But Joshua, isn’t that too late?” If you would read William O’Neil’s book on shorting, you would know that the fastest, quickest, and safest drops in stocks happen after they setup, rally on low volume, and fail at these moving averages. If they don’t make this pattern and fall to earth like ERS did back in 2006…well then, there is nothing you can do about that. Better safe than short too early and be real sorry. Always make sure the market is a bear before shorting. How many of you have tried to outsmart this market and failed? I am sure many have. Be careful out there shorts.

new short positions: none