Top Trader's Toolbox

It's Time to Short Global Markets

by Chuck Hughes

Many global stock markets and market sectors such as financial and basic materials have entered bear markets with the 1-month price of the stock or ETF dropping below the 20-month EMA. This indicates the major price trend is down. These markets have similar price patterns to the summer 2008 time frame just before the big collapse in global markets.

If you have long positions in US stocks, I think it is prudent to hedge your portfolio by taking short positions in the weak global markets. Short positions can be entered by purchasing put options or short ETFs which profit as the underlying ETF declines in price. I recommended short positions to the members of my advisory service in the summer of 2008. These short positions turned out to be very profitable during the financial turmoil that year. In this video we will explore the best indicators to use to select markets for profitable short positions.

 
Global Markets
 

FUTURES, STOCKS, BONDS, CURRENCY AND OPTIONS TRADING INVOLVES HIGH RISKS WITH THE POTENTIAL FOR SUBSTANTIAL LOSSES.

PLEASE READ. PAST RESULTS ARE NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. THERE IS A SUBSTANTIAL RISK OF LOSS TRADING STOCKS AND OPTIONS WITH OR WITHOUT THIS OR ANY OTHER ADVERTISED PRODUCT, SERVICE OR SYSTEM. ALSO, HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. SINCE THE TRADES HAVE NOT ACTUALLY BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.