We may still be in a bull market, but the ground is becoming more fertile for short selling.
You see, the bull market is aging. It will be closing in on its sixth birthday in March. And at some point, the market is going to catch on as to why the stocks have been surging so high for so long.
Markets – if not the whole global economy – are in for a rude awakening. With the United States just getting off its money-printing binge, the Bank of Japan accelerating its own program, and the European Central Bank likely posturing for quantitative easing sometime this year, the market rallies can't be sustained. Something has to give.
"Central banks just print money – there's no backing," said Money Morning Capital Wave Strategist Shah Gilani. "The backing they have is essentially the good will and faith of the countries that supposedly back them. If those countries falter, then who's backing the central banks? The money they print is worthless."
At some point, investors aren't going to have the same trust in the central banks that they've had through the duration of this bull market. For Gilani, there's one very profitable way to play an impending market decline.
"Short what you can – things are going to go down."
Short selling is a bet against the market. A short seller will borrow shares from a broker and sell them at the current market price. If the price goes down, the short seller will buy back those shares at a discount, and return them to the broker. The difference between the price the short seller initially sold the shares at, and the price they paid to buy them back, will be their profit.
Gilani weighed in on some stocks ready for a dive last week on FOX Business' "Varney & Co."