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It's Time to Short Global Markets

Many global stock markets and market sectors such as financial and basic materials have entered bear markets with the 1-month price of the stock or ETF dropping below the 20-month EMA. This indicates the major price trend is down. These markets have similar price patterns to the summer 2008 time frame just before the big collapse in global markets.

If you have long positions in US stocks, Chuck thinks it is prudent to hedge your portfolio by taking short positions in the weak global markets. Short positions can be entered by purchasing put options or short ETFs which profit as the underlying ETF declines in price.

Chuck recommended short positions to the members of his advisory service in the summer of 2008. These short positions turned out to be very profitable during the financial turmoil that year. In this video we will explore the best indicators to use to select markets for profitable short positions.

3 Keys to Successful Short Trading

Short trades profit as stocks or ETFs decline in price. Short trades can greatly increase your profit opportunities and open up a whole new universe of trade possibilities. Normally short trades are considered high risk as you incur almost unlimited risk if you are short a stock that continues to rally in price. The key to successful short trading is to only take only ‘limited risk’ short trades. Learn the three keys to successful short trading:

  1. Only take short positions in stocks or ETFs when the major price trend is down to prevent 'whipsaw' trades
  2. Only take limited risk short trades
  3. Confirm the price down trend with the On Balance Volume indicator
Futures trading involves high risks with the potential for substantial losses. Hypothetical performance results have many inherent limitations, some of which are described as follows. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. In fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk and no hypothetical trading record can completely account for the impact of financial risk in actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. there are numerous other factors related to the markets related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all of which can adversely affect actual trading results. Option and stock investing involves risk and is not suitable for all investors. Only invest money you can afford to lose in stocks and options. Past performance does not guarantee future results. The Chuck Hughes Inner Circle Advisory trade record does not represent actual investment results. Trade examples are simulated and have certain limitations. Simulated results do not represent actual trading. Since the trades have not been executed, the results may have under or over compensated for the impact, if any, of certain market factors such as lack of liquidity. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown.