Hedge funds, whose bearish bets on stocks have held their returns to half the Standard & Poor’s 500 Index in 2013, pushed short sales close to the highest level of the year just as the U.S. budget impasse spurs a doubling in volatility.Bloomberg
These hedgers think the market will correct by some 20%. They are right, but when? If they bet that stocks decline, what to prevent Bubbles Yellen from pumping the bubble? When stock rise, then the shorts have to buy the stock and deliver it to the other bettor for a cheap price. This is the old canard, the bubble can stay up longer than you can stay liquid.
If I were betting, I would short the stocks after a bout of Yellen Bubblmania. Once our gal pumps the stocks, bet the short. After a few days the Bubblmania will subside, and the stocks will be cheaper again.
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Ambrose Evans Pritchard wrote, “Rejoice The Yellen Fed Will Print Money Forever to Create Jobs”, thus describing quite well the October 10, 2013, rally in stocks, on the announcement of Janet Yellen as Obama s choice for Federal Reserve Chairperson.
The Yellen Pumping Effect is now over as there is no long term resolution of the US Government Budget Deficit in sight. A stockmarket sell off will likely commence the week of Monday October 14, 2013, thereby presenting the short selling opportunity of a lifetime, continuing a Bear Market that commenced with a market top on September 20, 2013, which came from the No Fed Taper Rally.
In a bull market, one buys in dips, and in a bear market, one sells into pips. The Great Bear Market commenced on September 20, 2013, as evidenced in the Market Off ETN, OFF, rising in value.
A strategy to go short the 40 ETFs/ETNs, IBB, PNQI, FDN, TAN, BJK, RZV, FPX, IST, FLM, CSD, PBS, IAI, PSCI, XTN, FXR, CARZ, XRT, EUFN, PJP, SMH, WOOD, PSP, RWW, PPA, SLX, RXI, ENZL, EIRL, GREK, EWP, YAO, TUR, ARGT, EPHE, SCIN, THD, EGPT, EWZS, EWY, UJB, seen in this Finviz Screener, ... http://tinyurl.com/n7zrdsg ...is likely to provide great financial reward.
One might use the 10 ETFs/ETNs, OFF, STPP, HDGE, XVZ, GLD, FSG, JGBS, YCS, SAGG, GSY, seen in this Finviz Screener, ... http://tinyurl.com/lbqm2pp ... as the basis for one s margin account, as these will increase in value with rapidly growing financial instability, as carry trades unwind, and as the Interest Rate on the US Ten Year Note, ^TNX, rises from 2.68%.
Alternatively one may want to invest in the following
Grizzly Short Mutual Fund, GRZZX, Leuthold, 33 South Sixth Street, Suite 4600, Minneapolis, MN, 55403.
Ranger Equity Bear ETF, HDGE, AdvisorShares, 2 Bethesda Metro Center, Suite 1330, Bethesda, MD, 20814.
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