- This topic has 105 replies, 10 voices, and was last updated 10 years, 10 months ago by
.
-
Posts
-
Stopped out of AUD/USD short for -25 back in @ 0.9530 1st target 0.9480 .
Well done Arkangel on getting your target for last week. GL for this week.
Please feel free to trade the opposite to me - but whatever take responsibility for yourself and above all DYOR !
Republicans and Democrats remain at loggerheads over the government shutdown – and, more importantly, the debt ceiling.
That’s got the supposed “smart money” trading scared. By that I mean, they’re increasingly selling stocks short, looking to profit from a nasty market slide.
In fact, an index compiled by ISI Group LLC, which measures hedge fund long versus short bets, fell to 48.4 last week. That’s a mere 0.2 above the lowest reading of the year. (A lower number represents a more bearish indicator.)
So with hedge fund managers so bearish, shouldn’t we – the supposed “dumb money” – be following their lead?
Not just no…But hell no!
<b>It’s Follow the Leader, <i>Not</i> the Laggard</b>
Instead of getting caught up in the headlines – and selling first and asking questions later – we need to get some perspective.
And, I’m sorry, but the bearish sentiment for hedge funds hardly qualifies as a breaking development. To the contrary, they’ve been betting against stocks all year. And the trade has completely backfired.
I mean, the S&P 500 Index is up 19% year-to-date. And a rising market doesn’t lead to profits for short sellers. It leads to <i>losses</i>. So instead of cleaning up, short sellers continue to get cleaned out.
Case in point: The average hedge fund continues to grossly lag the market, up only 9.2% through the third quarter.
Again, this isn’t a new development. Not only have hedge funds been lagging the market all year, but their struggles extend back more than <i>four years</i>.
Consider that, since the March 2009 bottom, the S&P 500 is up 111%. Meanwhile, the HFRI Equity Hedge Fund Index is up only 48% over the same period.
When it comes to investing, we want to follow the leaders, <i>not</i> the laggards. So, given the dreadful track record for hedge funds, we should look to do the <i>opposite</i>of what they’re doing.
And as it turns out, a compelling, empirical case can be made for doing just that…
<b>Smarter Than the Average Bear</b>
You see, the companies that hedge funds presumably expected to <i>fall</i> the most in price in 2013 actually <i>increased</i> the most, based on data compiled by <b>Goldman Sachs</b> (GS).
Specifically, the 50 most heavily shorted stocks in the Russell 3000 Index are up an average of 38% year-to-date. That’s double the return of the S&P 500.
Now, part of the outperformance can be explained by the fact that many hedge funds got “squeezed.”
As stocks rose in price, they were forced to cover a portion (or all) of their short positions at a loss. Of course, doing so means actually buying shares in the open market. And in the end, the added buying interest pushed prices up even higher.
“There still are people out there who are convinced the whole market and financial system is some house of cards,” says Brian Barish, President at Cambiar Investors.
That includes hedge funds.
However, the more time that passes without a correction, the more convinced hedge funds become that one is inevitable.
In other words, their stubbornness is only increasing.
Eventually, though, they’ll have to capitulate, which should lead to the most heavily shorted stocks outperforming the market even more.
Such a turn of events could happen as early as this week, once the politicians flesh out a compromise.
With that in mind, here’s a list of the 10 most heavily shorted stocks in the S&P 1500 Index at the end of the third quarter.
Clicked on one of your adverts K. thats 5p in the bag for you …lol!
If you mean 1 advert yesterday Gekko, its 1p lol.
Thanks
Plan your trade, trade your plan!
Bludy hell.
Total mega crooks. Absolutely ridiculous.
Please watch this video
Plan your trade, trade your plan!
My goodness….. I don’t remember those posts last night, too much red wine !!
closed last nights shorts too early, but hey profit is profit. Longed that heavy dip for a bounce, out for a quick set of points reversed short and now flat again, I don’t have the bottle to run anything in case it does a flash 100 against me !
lol Ark re: red wine. Fond memories of when you stayed over at my place after a Kpad getogether.
Indeed I am in deep shock over that link. Bludy total mustard crooks. Always said it and will always maintain it.
Excellent trading.
Today for me nothing but negative SYSTEMS but a GFS triggered after open also (and gave us a gap fill)
Plan your trade, trade your plan!
So there is that +100 flash I was worried about, but I can’t see a reason why, nearly reached agreement and Fitch puts US on negative watch and a deadline of tomorrow, I think it’s gonna be one whippy market today, any hing with stops could get hit and then its back to its starting point in a nano second, or it just keeps on going in the direction it starts, today I do feel may be a stand aside day for me as numerical and trend support/res may not be relevant……. Pah, look at me thinking bout funny-mentals (fundamentals) rather than just the charts !! Unheard off but I thina perhaps a position on the close of the US session may be an order of the day today instead for me.
October 20th, 2013.
Debt Ceiling Day is upon us, as Congress and the President have one more day to get’er done. Wouldn’t it be great if five people, the President, and the Democrat and Republican leaders of the House and Senate, were locked inside a room starting tomorrow morning, without food and water, and no bathroom, and were told they will not be allowed out until a deal is struck? We would know when they have struck the best deal possible when all emerged equally ticked off, famished, parched, and hustling to the bathrooms. Will they or won’t they? Wednesday promises to be volatile and one of those days to be glued to the news stations. The divisiveness and apparent insanity of the process of governing gives a glimpse into how polarized the nation has become, perhaps as polarized as du ring the Civil War. Back then they chose war over negotiated compromise. Will we see something similar again?
The Coming Economic Ice Age is being foretold by the completing Jaws of Death pattern. Could extreme polarization inside the U.S. blow up into a self-destructive civil war once again? We may be witnessing the seedlings of the crop (crap) that is coming. The pattern tells us the unthinkable is coming. McH.
WE know a big move is coming but if unsure which way, look for cheap binary tunnels for Wall St, no need to worry about the stop and low risk.
Good morning Ark.
I am so impressed with THE SYSTEMS lately. Yesterday it was nothing but negative SYSTEMS and we got a -15 low.
For today (posted last night) it was nothing but positive SYSTEMS with a DDUD system also (+10 print).
I longed last night with limits in to close at +10.
I saw the news before going to sleep with the FITCH pollux and NO AGREEMENT pollux and had 4 points or so profit it in just prior before seeing that wiped in seconds.
I kept faith and see my 10 point profit limits have been hit.
Lets see what the crooks have got planned now and for me it will be over to SYSTEM GFS at the open
Plan your trade, trade your plan!
Hoggy thanks for the above. Interesting as always.
I have corrected your post with all the formatting problems.
The way to post html is in TEXT mode and not VISUAL MODE.
You will see in the POST box on the top right there are two tabs VISUAL / TEXT. Html codes ie <b> etc, get formatted correctly in TEXT mode.
Hope it helps.
Plan your trade, trade your plan!
- You must be logged in to reply to this topic.