Rising Market is a Head-Fake: Short with SDS

Shorting the market is a tricky task. For one, you’re betting against the long-term upward bias of the market. Over time and on the whole, stocks tend to go up. When you go short, you’re disagreeing with that trend. That’s why good short trades are usually quick and focused. The other issue relates to how stocks act. Stocks that fall hard often bounce higher, sometimes sharply. If you’re on the short end of the trade, your account can suffer very quickly and not recover. Anyone who went short the market at the March 2009 low and is still in that position could be down 60% or more. With those caveats, we still think now may be a good time for aggressive investors to consider a strategic short. The European debt…