Share This Article

Facebook LinkedIn
Twitter Reddit
Print Email
Pinterest Gmail
Yahoo
Money Morning
×
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
  • Retire
    • Income Investing Guide
    • Retirement Articles
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
Login My Member Benefits Archives Research Your Team About Us FAQ
  • Invest
    • Best Stocks to Buy
    • Stock Forecasts
    • Stocks to Sell Now
    • Stock Market Predictions
    • Technology Stocks
    • Best REITs to Buy Now
    • IPO Stocks
    • Penny Stocks
    • Dividend Stocks
    • Cryptocurrencies
    • Cannabis Investing
    • Angel Investing
    ×
  • Trade
    • How to Trade Options
    • Best Trades to Make Now
    • Options Trading Strategies
    • Weekly Trade Recommendations
    ×
  • Retire
    • Income Investing Guide
    • Retirement Articles
    ×
  • More
    • Money Morning LIVE
    • Special Investing Reports
    • Our ELetters
    • Our Premium Services
    • Videos
    • Meet Our Experts
    • Profit Academy
    ×
  • Subscribe
Enter stock ticker or keyword
×
5 Ways to Beat the Fed (and Crush Inflation)

Email this Article

Send with mail | ahoo instead.
Required Needs to be a valid email
Required Needs to be a valid email
How to Play a Heavily Shorted Market
https://mney.co/2GfjRcW
Required Please enter the correct value.
Twitter

short selling

Article Index

  • Here's Your Chance to Take Short Sellers' Money
  • You Can Thank the Bears When These Gains Pile Up
  • The Bears Are About to Get Slaughtered in These Stocks
  • The Short Sellers Are Set to Hand Us Another Two Big Winners
  • Why I Know Best Buy Stock Is About to Pop Higher
  • The "Weirdest," Most Exciting Chart I've Seen in Four Years
  • It's Official: 2017 Is the Worst Year Ever for Store Closings... Here's How to Profit
  • 3 Underperforming Energy Stocks to Short Before June 2017
  • Top 3 Retail Stocks to Short Now
  • The 3 Best Stocks to Short in April 2017
  • The 3 Top Stocks to Short in March
  • A List of the Most Heavily Shorted Stocks in 2017
  • Top Retail Stocks to Short Today
  • 3 Top Stocks to Short Before 2017
  • Profit from One of the Worst Stocks on the Market Now
  • One of the Best Stocks to Short Now
LIVE
Visit Money Morning Live

How to Play a Heavily Shorted Market

By Lee Adler, Liquidity Specialist, Money Morning - December 12, 2018

The market-reversing "Magic Hand" appeared again Monday, just when it looked as though all was lost. Is this the bottom?

One thing is certain: There is a crucial support area from 2,590 to 2,630 on the S&P 500. On Monday it was stretched beyond the limit, when suddenly, out of nowhere came the Magic Hand.

In this instance, the bulls can thank the shorts again, because with liquidity tight and getting tighter, there's not enough intrinsic demand for stocks to mount a massive, lasting rally. But in a market that has become thin because prices have crossed the same range over and over, short covering can drive a fast rally – but only until the short covering exhausts itself. And those times are getting shorter.

Nevertheless, when the earth is in its final hours, with the core about to explode and obliterate the last remaining vestiges of life, there is one thing that you can count on.

The shorts will cover.

I remember the old saw of the ancient, white-haired, wise-men traders I sat with in customers' galleries at Walston & Company back in the late 1960s and early 1970s, when bear markets were the rule: "He who sells what isn't his'n, must buy it back or go to prison."

And short sellers have hair triggers. Once they see that support isn't breaking down, they pile in all at once to cover their positions. That also tends to pull in a few long-side buyers who have cash. They're in short supply now, however.

Ultimately, each of these short-covering rallies weakens the market because they deplete the demand that is coming from short covering. So, what about short interest today? Will it continue to drive rallies every time support is threatened?

Examining Primary Dealer and customer shorts gives us some obvious answers...

This "Uncooked" Data Proves It: Another Housing Crash Is Coming

By Lee Adler, Liquidity Specialist, Money Morning - October 9, 2018

The housing market is rolling over - and it will get worse as mortgage rates and house price inflation continue to rise.

Of course, you're not seeing or hearing about this out in the media... yet. That's because, initially, these events will make little difference to the now-booming U.S. economy. Housing stopped being a major economic driver after the last bubble collapsed. 

But make no mistake: It will matter, big time.

I've got some charts that will show you what it's going to look like this time, why it's happening, and most importantly, how you can make some money (think John Paulson or Michael Burry of "The Big Short" fame) when the brewing crisis explodes...

Here's Your Chance to Take Short Sellers' Money

By Chris Johnson, Quantitative Specialist, Money Morning - October 2, 2018

Chris Johnson

Our Quantitative Specialist's Best in Breed system has identified biotech as the most heavily shorted sector in the market right now.

What's more, he's showing you two of the "best of the best" bullish stocks in the sector right now...

You Can Thank the Bears When These Gains Pile Up

By Chris Johnson, Quantitative Specialist, Money Morning - August 14, 2018

Our Chris Johnson is back with his Best in Breed system to determine the best short interest stocks.

In fact, he's bringing you two opportunities that are the strongest in their sectors...

The Bears Are About to Get Slaughtered in These Stocks

By Chris Johnson, Quantitative Specialist, Money Morning - May 30, 2018

Short Selling

One of our Chris Johnson's "10 Commandments of Trading" is that short sellers are usually a bull's best friend, and that's bad news for the bears, because they're about to have a rough ride. But we're set to make a killing...

One of our Chris Johnson's "10 Commandments of Trading" is that short sellers are usually a bull's best friend, and that's bad news for the bears, because they're about to have a rough ride. But we're set to make a killing...

The Short Sellers Are Set to Hand Us Another Two Big Winners

By Chris Johnson, Quantitative Specialist, Money Morning - May 14, 2018

Breakout Stocks

Our Chris Johnson is here to tell you about a powerful and accurate technical indicator that confirms a breakout stock and the potential for high profits that short-sellers are set to hand over to you...

Our Chris Johnson is here to tell you about a powerful and accurate technical indicator that confirms a breakout stock and the potential for high profits that short-sellers are set to hand over to you...

Why I Know Best Buy Stock Is About to Pop Higher

By Chris Johnson, Quantitative Specialist, Money Morning - May 4, 2018

Best Buy Stock

When it comes to short interest, our Chris Johnson knows that it often provides the fuel for strong rallies, especially when there's too much of it.

Find out how you can end up on the right side of it with Best Buy stock...

The "Weirdest," Most Exciting Chart I've Seen in Four Years

By Chris Johnson, Quantitative Specialist, Money Morning - March 29, 2018

Short interest

One of my favorite, most powerful tools that's been at the heart of my trading for more than 20 years is short interest.

In fact, I love it so much, I've written about it before, showing how I use it to help pick the best stocks for my Seismic Profits Alert subscribers.

Today, though, I want to approach short interest a little differently, because it's telling us something very important about this market that all traders need to know...

It's Official: 2017 Is the Worst Year Ever for Store Closings... Here's How to Profit

By Shah Gilani, Chief Investment Strategist, Money Morning • @ShahGilani_TW - October 30, 2017

store closings

If you aren't a subscriber to my Zenith Trading Circle service, you might have missed some lucrative good news: Retail think tank Fung Global Retail & Technology reported U.S. retailers plan to shutter 6,700 retail locations this year. Credit Suisse says that figure handily beats the old record of 6,163 closings set in - big surprise - 2008.

"But wait," I can hear you ask, "2008 I get, but the economy's humming along now, so why the closings? And why are these closings good news?"

Well, I'll tell you.

As to the first question, these overleveraged, maladapted-for-the-21st-century retailers could screw up a free lunch; the U.S. economy could grow 'til the cows come home and they just couldn't handle their debts.

The retail sector as we once knew it is now teetering on the edge of absolute destruction, and there's nothing - and I mean nothing - anyone can do to save retail stocks. Diagnosis: TERMINAL.

Which brings me to your next question, of course. This is great news for well-positioned investors because Wall Street smells money - big piles of it - on the table... and it smells as irresistible and tasty as scratch-made chocolate chip cookies baking on a snowy afternoon.

Mmm... Hungry? Good. We're going to sneak into the kitchen while Wall Street's not looking and take a bunch of those rich, delicious cookies for ourselves.

We're going to make a lot of money.

And we won't have to own a single one of these clunkers to do it.

So let's go get some...

3 Underperforming Energy Stocks to Short Before June 2017

By Ashley Moore, Associate Editor, Money Morning - May 8, 2017

energy stocks to short

The energy sector as a whole is down with low energy prices, but these energy stocks to short are underperforming their peers.

Oil and coal prices are expected to remain low in 2017, providing little to no increased profitability for energy stocks this year.

Here's how to profit from low energy prices...

Top 3 Retail Stocks to Short Now

By Money Morning News Team, Money Morning - April 21, 2017

Retail stocks to short

It's no secret that traditional retailers are on their way to the grave.

The sector as a whole has been underperforming the market for years, and this year one of our top retailers to short is closing 100 stores.

But there are still profit opportunities with our top retail stocks to short...

The 3 Best Stocks to Short in April 2017

By Ashley Moore, Associate Editor, Money Morning - April 5, 2017

Best Stocks to Short

Abusing adjusted EPS is a great way to get on our best stocks to short list.

And that is exactly where these three companies landed with their overinflated earnings.

Here's what you need to know about the potential for collapse for these EPS offenders.

The 3 Top Stocks to Short in March

By Ashley Moore, Associate Editor, Money Morning - March 16, 2017

top Stocks to short

The markets have been rising rapidly since the November 2016 elections.

However, not every stock is a winner in this bull market, creating some unique opportunities to profit.

In fact, some of the biggest profits can be found in the top stocks to short now...

A List of the Most Heavily Shorted Stocks in 2017

By Ashley Moore, Associate Editor, Money Morning - February 17, 2017

Most Heavily Shorted Stocks

The markets are at an all-time high, leaving many investors wondering how to profit from a potential market pullback.

Shorting stocks is one of the best strategies to use in a market pullback. This strategy allows you to sell high and buy low and markets drop.

We compiled a list of the most heavily shorted stocks to help you profit in 2017...

Top Retail Stocks to Short Today

By Ashley Moore, Associate Editor, Money Morning - February 7, 2017

Stocks to short

Retailers have been struggling despite the recent rally and make up this month's list of top stocks to short.

One of the stocks to short this month has already dropped over 20% since the beginning of the year, making it a prime candidate for shorting.

Here's why these stocks are this month's biggest losers...

First
  • 1
  • 2
  • 3
NextLast
    QUICK LINKS
    About Us How Money Morning Works FAQs Contact Us Search Article Archive Forgot Username/Password Login to Private Briefing

    © 2022 Money Morning All Rights Reserved. Protected by copyright of the United States and international treaties. Any reproduction, copying, or redistribution (electronic or otherwise, including the world wide web), of content from this webpage, in whole or in part, is strictly prohibited without the express written permission of Money Morning.

    Address: 1125 N Charles Street | Baltimore, MD 21201 | USA | Phone: 888.384.8339 I Disclaimer | Sitemap | Privacy Policy | Whitelist Us