Violent Swings Make It Hard to Short THE Top

You can feel it in your bones that the bull market begun in 2009 is in the throes of a violent death. But how do you get short — and stay short — when hysterical spasms, short-squeezes and swoons continue to occur almost daily?  I discussed this with my trading partner yesterday and we decided the best way to handle the chop is to try to buy the bottom of swoons so that we can rack up enough profits on the rallies to cushion each new short bet.  Trouble is, our 1954.50 bid for E-Mini S&P contracts yesterday fell two points shy of the day’s swoon low, and so the rally took off without either of us aboard.  A friend who trades aggressively but whose main business is real estate development said he was simply staying short and that he would gut it out if stocks get squeezed to new highs. While that may yet prove to be the best strategy, it can be unnerving to watch the Dow swing 200-300 points or more against you while you’re waiting for The Big One.