Shorting

[bryanmcn]

Looking at the DOW and the TSX it is apparent that even before the recent shakeout, the 6 month trend is down. So I have two questions;

1) Is it getting harder to find good momentun stocks?
2) Have you considered a shorting portfolio?

Thanks

[Super Stock Picker]

Hello bryanmcn,

Definitively, when the market turns direction, it is harder to find good stocks with momentum. As we use relative filters to screen the market, we see the selected stocks coming in with a smaller performance over the last months than before.

But, in any market, there are winners. The 3 best stocks our system has been able to find last Friday were 3 gold stocks (K.TO, ABX.TO and CG.TO), not very surprising if we think a recession is ahead.

Looking for a shorting strategy, like reversing the filters we use, could be a way to find good ideas in this market. We would need though to match the shorting criteria used by as many broker as possible. Selection could be limited to a given price and volume.

Inputs would be appreciated in terms of what you would like these limits to be.

Any proposition?

[bryanmcn]

My preferences would be for stocks priced above $40 with relatively high volume (for iquidity purposes). US stocks would be preferred over canadian if your filters can search on that side. If not - I'm sure their are some possibilities on the canadian side.

[garilou]

I love shorting, and I do short US stocks too.
A agree with you that stocks priced above $40 are better, but most of all I agree that there should be a high daily volume.

But some canadian stocks are also good to short.

Thanks to SSP, I recently shorted IMN, and it alone, in very few days paid for a big renovation I had to do on the outside of my home!

[skimmy]

How did SSP help you find that stock to short, was it just based on a sell order?

[garilou]

No, it was not only the sell order: there are many sell orders that I do not short.
I looked at it the same way I look at stocks that I will buy, did some fundamentals research, waited some days to see if the trend went on after the sell order, and checked the progression of the shorts on that stock, the insider tradings; well all the same "home works" that I do when I buy, I do the same when I short.
Then I placed the order at a specific (pretty high price, good for a few days, in case of a rebound.)
I always say that stocks that you do not own (or borrow) won't hurt you.
And the order went through almost 0.50 cents higher then my limit order. That day was an rebound  day (so I lost a few dollars on that day), and then it went down fast enough.