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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 trading strategy 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