To judge from the headlines, the world these days is an excruciatingly interesting place, especially for investors. It is understandably tempting, then, for those with a bearish mindset to short stocks and index futures every time they ratchet higher. However, the rally since August 24’s bombed-out lows has been feeding off short-covering in ways that make bears their own worst enemy. There’s a simple alternative for all who have grown tired of getting stopped out two or three times a day trying to pick The Top. Try going with the flow for a change, using technically derived targets to get long ahead of rallies. You’re liable to discover that the best way to “feel” precisely when a market is getting heavy enough to short is when you are holding stocks yourself.
