I think it would be very hard to find shorts as a hedge against a megacorrection. A better idea there might be to buy puts for one of the index funds, as suggested in another reply on this thread by Goldbug23. I went short with SUNW, INTC, HRC, LRCX, and T in September and early October, based on technicals at that time, and I'm long on others in the same industries. I closed all the short positions early Tuesday as fast as I could get through to Schwab -- trying the web, Tbroker, Equalizer, and POTS. The delay cost me plenty, but I did post a trading profit overall. For the moment, I don't like the technicals on those five for shorts.
But, feeling exposed with only long stocks, I then bought DJX puts just in case this bounce turns out not to be a resumption of growth. I am looking now for some good short candidates, but don't have any at this time.
Nobody knows what the market is going to do, so I think hedging is the only prudent way to play, unless you have a very long time horizon. |
