It is one thing to keep a list of short setups in this market, it is quite another thing to act on the ones you are tracking.
Right now, the short plays aren’t rewarding investors and traders alike. When the market starts to act a bit dicey as it did on Friday, I’ll add a short position to the fold; usually a SPXU or QID just to keep it very manageable. But those don’t work either. I still don’t think they are a bad insurance policy to have when the market looks less than inviting at times and you have a number of longs in the portfolio, but they have yet to really pan out well.
I mean c’mon, we sell off for three straight days and the market can’t even pull off a meager three points combined.
Quite pathetic really.
I’ll admit though, the VIX hovering down in the 9’s for as long as it has, and almost in the 8’s at one point today, isn’t my cup of tea either. That is why it is important to have one eye on the exits, and to keep moving up your stop-loss throughout the trades that you are making. Otherwise, you risk being caught by surprise and being stuck in that “elevator down” that the market likes to take from time to time.
With that said, keep this watchlist of short setups at your side. Know that you have them in case of a market downdraft, but don’t try to predict the market top on your own. Just always be prepared and take what the market gives you.
Here’s the short setups I am tracking: