Marginmike, Yeah, I started shorting yesterday and today, so far only about 7% of my portfolio, with about 20% long in gold stocks. If the naz starts to tank, it seems likely that gold will be a place where some of the money will flow, as people really start to give up on stocks.
I shorted emlx, brcm, jdsu and qlgc, although after looking at the charts, I think one could throw a dart at almost any of the big techs, including qcom, and have some success (although I would never short qcom, since it has such a fantastic franchise, if the telecoms ever get their balance sheets back in shape).
Do you have some thoughts on what % of a portfolio should be short? I like a long position such as gold stocks better, since the profits could potentially run to 2-3x if gold has a good run, whereas most shorts would yield perhaps 50% best case. Plus a long position could potentially be held for a long term gain, whereas a short position would most likely be taxed as a short term gain. But a short position offers some diversification from gold, although they are both basically a bearish position.
I suspect that one reason why the COT has become much more negative in the last two weeks is that the pros are looking at these charts as well, and seeing these 'textbook' shorting signals. It reminds of the charts in late 2000 and early 2001, in which they were almost all very bearish. The COT also got very negative at that time. I guess we might as well enjoy the short end of things, as it may be many years before the charts give such clear bearish signals again....:)
Robin |
