Forget Shorting the Stock Market

The very beginning of a new intermediate cycle is the single most dangerous time to short stocks. The average gain is 6-8% in the first 12-18 days. Yet this is the time most retail traders want to sell short as they expect the market to turn back down immediately. When it fails to do so they end up losing money.

Even in a bear market (which we are not in), a new intermediate cycle will almost always rally at least 6-8 weeks before topping. The current cycle is only on day 6 – a long cry from 6-8 weeks.

Forget Shorting the Stock Market
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  1. jhmoffett

    Interesting…as of last Friday, the SPX was already up about 6% from the ICL of 1991. The question now is whether to wait for more of a pullback before buying the dip.

  2. Anthonyo


    Is that a large inverse head and shoulders between June 19th and now in right shoulder almost done?

  3. Steffmeister

    I must quote Peter Schiff here

    “sideways is the new up”

    ZZZzzZZzzz … 2150 still unbroken after 13months.

    My Gold&Silver miners is much more fun 🙂 Victoria Gold is a nice stock imo

    1. Gary Post author

      Our stock portfolio is up 54% riding the moves out of these cycle lows.

      When that monster consolidation in the Nazdaq breaks out there is no telling how far it’s going to go. There are literally trillions and trillions of currency units to drive it.

  4. Gary Post author

    As promised the SMT metals portfolio is now significantly outperforming the Old Turkey strategy.

    Up 225% as of today.

    Before the bubble phase is over though I expect Old Turkeys will easily outperform us as they won’t pay a single penny in taxes until they sell.

  5. Gary Post author

    Haven’t heard from Jorgy in months. Looks like he blew up his account with DUST trying to short the baby bull. Ouch!

    From the point he started warning us we were going to get “dusted” the miners never pulled back enough for him to exit the position without suffering an unrecoverable loss.

  6. jreality

    Shorting always seems easy AFTER a big drop (that nobody could time) already happened. Easier said than done.

  7. Alexandru Popovici

    no sooner USX moves off its flag upper trend line than stock futures slide.
    so, what stocks will do depends on what the dollar will do.

    and it is far more likely that USX will move higher towards its YCH since it is still early in its new YC.

    1. Gary Post author

      A weak number and the dollar tanks. It hasn’t been able to recover the 200 DMA. Not a good sign.

  8. Alexandru Popovici

    bailed out of the pilot short-stocks position via SDS with a -0.2% equity loss.
    back 100% cash.

    looking forward to the aftermath of Sunday’s elections in Japan.

  9. Gary Post author

    The S&P has now completed a weekly swing. When the Nasdaq breaks out of that 15 year consolidation look out. There is no telling how far it will go. Best guess: Minimum 20,000 on the Naz.

  10. Gary Post author

    Good or bad tomorrow and the stock market goes up. Good and stocks rally because the economy is improving. Bad number and the dollar tanks so stocks go up.

    At the very beginning of an intermediate cycle stocks find any excuse to go up.

    The breakout is coming. The longer one hesitates early in an intermediate cycle the more of the easy gains you will miss.

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