Bill; What gets me as I see people shorting they do not seem
to mention the short interest History of the stock in question,
You do know that both Brokers and Market Makers often hold short
positions ? That they have up to the minute data, & can close those
positions ahead of any rush to the gate..individual shorts
need to look at the hole cards the pros have. I like to see a person
who post LONG positions in a timely manner, as any one who hasn't
learned to pick up trending stocks first, is generally over his
head when it come to shorting.
BTW most margin accounts belong to shorts who have gotten
over extended, not to the long players. On top of that there
is more money in Money Market funds as at this time than any other
time in two years. The Market climbs a wall of worry. NYSE just reported an all time high in short interest..if you study short interest you will find the market falls , after about 1/3 of the shorts get squezed out..as long as short interest climbs, the market
climbs..while this does not hold true for "all" stocks...it does
hold true 90% of the time, and with out a history over laying
the price of the stock with the short interest increase/decrease
you can't tell. Betting aginst the odds don't make sense to me,
I done it and learned the hard way..I'm just trying to tip people off,
you need to do more home work than just finding a scam. I can show
you plenty of scams that killed a lot of people going short
on them. You better be good at playing longs "first", before you kid
yourself into thinking you know how to play shorts.
Playing the short side without cover has cleaned out many many
accounts. You may win a few..which if it makes you cocky, it just
sets you up for the big kill. Most pro shorts are hedged one
way or another, while the MM and Brokers & Mutual Funds all
have an inside track to just who is short what.
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Picking a top is the inverse of catching a falling knife, but it's
much harder..and burns more shorts than bottom fishing does
longs. A stock can only go to zero..now that is bad for a
long to the extream..but it's not as bad as to him as for a
short that sees his play over double in value..and it's not
hard to see if you check short interest..that 20 times more
shorted stocks over double in value, than the ones that
go to zero.
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I look for shorts too..but I look for stocks that just had their
short interest drop about 20 to 25% with a spike in price,
thats the signal that's seldom wrong. You know then that the
price rise was not people buying but shorts covering, this is
not easy to find..as the data we get is delayed a lot.
But you can find one from time to time. The Naz Jan12th to FEB 10th short interest will not be puplic till the 26th, as soon as
you can get it you scan it for BIG DROPS in short interest,
find any thing that spiked with a "big drop in S.I." during that time
frame..on heavy volume, but has lost it's volume yet not fallen back then also see if it's a scam type, it take a lot of digging, and
filtering, and you have to be fast. <G>
Jim
PS I've made much more money on stocks that were "over shorted"
and I went long via calls while the shorts were greedy, and followed her down shorting and shorting..On heavy shorted stocks once the volume falls off, I check the call option premiums, or if it's a
good basic stock I sometimes write puts. ( writing puts ties up more of my capital, but can be safer than buying calls )this has little to do with the value way of analyzing it's more handicapping..or ( strategy ), and the strategist..generally are over looked, but they beat the anlacyst hands down. I also look
for the past pattern in her price/short-interest history.
One I've hit over and over has been ADBE..always on the call side
when she gets down and the shorts are still heavy on her..
Cyrix was my best one time hit last year. The stupid shorts
had her beat down till 85% of her shares were short..I went
in she was about 12 and no talk of a merger in the air, I'm
beginning to think that Mergers are often preluded with with
very heavy short interest by the company that wants to buy
it cheap. I've seen this more than once, ( heavy short interest
in a beat down stock prior to a take over bid )..generally the news
comes out ( after hours ) and after the company doing most of
the shorting has discreatly closed most of it's position.
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Jim |
