From Stock Timing....
SHORT ALERT!!! Be concerned when the rats jump ship? I bring this old saying up because huge amounts of capital are being moved from German to Switzerland. That's a sign of fear and panic starting to rise in Germany. Some are saying that Germany's short ban was the trigger, but I don't believe that is the case. Some German gold dealers are reporting that they have run out of Krugerrands.
We are still in an environment where we can get high volatility whipsawing, but we are also at a critical juncture where a very fast and steep drop could occur. Fast enough where you would be hesitant to go short after it happened. Alternately, we may not get that fast drop and instead get more whipsawing or another upside bounce that creates a right shoulder which would mean we should wait to short.
So, what's the best answer here? There is no perfect answers here, and sometimes you just have to take some level of risk in a trade. That may be the case here, as we are going to recommend shorting the Russell 2000 and the S&P 500 at the open. That means you BUY the RWM and the SH. [ProShares Short Russell2000 ETF (Symbol: RWM) ProShares Short S&P500 ETF (Symbol: SH)] You can do an equal mixture of the two, or favor the RWM with higher exposure. Alternately, if you watch real time data, it is often advantageous to wait 5 to 10 minutes into the open before deciding the best time to short. That may not be the case here, because we could be seeing a panic market sell off.
So bottom line, we are going to enter Short Positions this morning by Buying two short ETFs: the RWM and the SH. If we should get a whipsaw to the upside, we will consider risking 3% before closing the positions. You can do equal amounts in the RWM or the SH or favor a higher percentage invested in the RWM.
