Short-Selling, Puts & Inverse ETFs 02 (Feb 12 - Dec 25)

[winston]

How to Make Money Betting Against Stocks

By Dr. Steve Sjuggerud

How do you profit when stocks are falling?

The short answer is, "Not very easily."

Betting against stocks is a tough business. That's a big reason why the sophisticated computers behind my True Wealth Systems service haven't signaled a "short" trade in the last five years.

But earlier this month, they did for the first time.

This doesn't mean the market will crash. In fact, this is a specific bet. And today, I'll show you why this type of bet can work… And exactly what to look for if you want to profit on the downside.

Let me explain…

In November, I explained what to look for when betting against the entire market. In short, you only want to bet against stocks when they're expensive and in a downtrend. But betting against individual stocks or sectors is different…

What do we look for when we bet against a sector? It's simple – the opposite setup of what we want when we buy a sector…

When we buy, we want to see a sector that is
1) hated, but
2) in an uptrend.

This is my longstanding investment prism. By following it, we ensure we buy
1) good value, when
2) no one is interested, and
3) after the trend has moved in our favor.

Following these rules can lead to outsized gains and actually lower our risk.

And in order to bet against a sector, we want to see the exact opposite… We want to see a sector that is
1) loved by investors, even though it's
2) in a downtrend.

This doesn't happen often. Investors usually end up scared, quickly, after a downtrend begins.

Think about how it feels in the markets today.

Stocks have had a rough start to 2016. They're now nearing multiyear lows. But you don't hear anyone preaching about "buying the dip."

Everyone is scared right now. No one sees this fall as an opportunity. No one is saying "buy."

That's normal. I'd really be scared if investors were extremely bullish in spite of a dramatic fall in prices. That would be the recipe for larger losses.

We've seen this in recent years in places like Russia…

I explained what was going on in Russia to DailyWealth readers in November 2014. In short, Russia's stock market was crashing. But foreign investors were ecstatic to buy.

Shares outstanding of the Market Vectors Russia Fund (RSX) had soared… which showed investors were pouring money into Russian stocks.

This was a case where a market was crashing, but it was still loved by investors. So what has happened since?

Shares of RSX are down 36% since that essay was published. That would have been a great time to bet against Russian stocks.

This is just an example, of course. But the idea is important. In order to make money on the downside, we want to see a sector that is
1) loved by investors, even though it's
2) in a downtrend.

If you're looking to short a stock or sector, find one that investors love despite a downtrend. That's the recipe for further losses.

Source: Daily Wealth

[winston]

Short Sellers Making an Even Bigger Killing Than You Think

by Camila Russo

Most costly U.S. stocks to short underperformed by 26% in 2015

China, Fed, gap between winners vs. rest of market is helping

Source: Bloomberg

http://www.bloomberg.com/news/articles/ ... -you-think

[winston]

This is the secret to bigger, safer long-term gains… in any market

Crux note: This week in The Crux, we’re sharing an extremely valuable series from DailyWealth Trader editor Ben Morris. In it, he shares his advice for DWT readers to prepare themselves for the good possibility of a prolonged bear market.

Yesterday, Ben covered “Your first line of defense against financial disaster.” Below, he shares the way that many of the World’s best investors and traders view the stock market… and how adopting this view can cut your risk and help you profit no matter what the broad market is doing.

by Ben Morris

Source: DailyWealth Trader

http://thecrux.com/how-to-protect-your- ... ar-market/

[winston]

5 ETF Plays for a Bear Market

By Sweta Killa

Source: Zacks

http://finance.yahoo.com/news/5-etf-pla ... NlYwNzYw--

[behappyalways]

Thanks. Could be what I am looking for.

5 ETF Plays for a Bear Market

By Sweta Killa

Source: Zacks

http://finance.yahoo.com/news/5-etf-pla ... NlYwNzYw--

[winston]

iPath SP 500 VIX Short-Term Futures ETN
Proshares UltraShort Oil & Gas
Direxion Daily S&P 500 Bear 3x Shares
Direxion Daily Small Cap Bear 3x
Direxion Daily Financial Bear 3x

Source: Zacks Equity Research

http://finance.yahoo.com/news/zacks-inv ... 02669.html

[behappyalways]

Thanks

iPath SP 500 VIX Short-Term Futures ETN
Proshares UltraShort Oil & Gas
Direxion Daily S&P 500 Bear 3x Shares
Direxion Daily Small Cap Bear 3x
Direxion Daily Financial Bear 3x

Source: Zacks Equity Research

http://finance.yahoo.com/news/zacks-inv ... 02669.html

[winston]

The 3 Best Downside Protection Equity Mutual Funds

By Stephen Vita

Source: Investopedia

http://www.investopedia.com/articles/in ... er=YahooSA

[winston]

4 Strategies to Short the S&P 500 Index (SPY)

By Stephen Vita

Source: Investopedia

http://www.investopedia.com/articles/in ... er=YahooSA

[winston]

4 Inverse ETFs to Short Oil as Crude Prices Tumble

By Madeleine Johnson

Source: Zacks

http://finance.yahoo.com/news/4-inverse ... 04788.html