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You don’t sell breakouts on the downside. Bear markets are different animals from bull markets. You enter the market short when the price rallies to the trend line and reverses.
Please note: I reserve the right to delete comments that are offensive or off-topic.
8 thoughts on “How To Sell The S&P 500 Short”
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This is by far the most interesting little note I’ve read in a long time. Would that include other commodities or asset classes? Is there some book on trading which highlights this concept or is it part or your experience?
My experience.
Id thnk we wait for a rally to get short sp, if that’s your bias.
Thanks. That’s what I said in the blog post.
Yes, I had more text but typing on Ipad can be difficult…..I assume it was deleted.
Nope, I approved what came through. I didn’t edit your comment.
very interesting, i have never heard of this before. Is this primarily because of the hopeful rebounds that occur in bear markets?
Could be a lot of things. And I don’t think I can name them all. For one,
short selling is still a misunderstood practice even among commodity
traders…some of who are long-only traders. Two, if you happen to find
yourself selling a breakout to the downside that’s particularly volatile,
you might get caught up in a snapback rally. This appears to be especially
true in many of the bull markets we have in commodities right now.