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Two Ways: Shorts on Short Leash


Strengthen your portfolio in good times and bad.

War on Evil Shorts

New rules are out on short-selling by the Securities and Exchange Commission. According to The Wall Street Journal, investors will now have access to fresh information about the volume and velocity (such as the exact time and position) of the downside bets made against companies. Traders will also have to settle their short sales within four days.

Hedge funds also won a small victory because they now won't be required to disclose details of their short positions. They had fought such disclosures because posting them would be the equivalent to revealing trading secrets. All this information will still be delayed by one month and the SEC said self regulatory organizations like the Financial Industry Regulatory Authority will start posting this information as soon as the next few weeks.

From the Bull Pen: Stocks may seem overbought in some sense but it doesn't seem like the short environment has gotten any better. Dow Theorists are pleased to see the transportation index (TRAN) break out above 3400 resistance. Investors can use any pullbacks in the ETF (IYT) to $61 as an opportunity for upside exposure.

From the Bear Cave: Yesterday we heard a story of UBS (UBS) banning all trading in the leveraged ETFs. Does it make sense to short these stocks for the longer term, especially if this becomes a trend? Minyanville has already talked about how the math simply doesn't work in these vehicles. One idea is to play the downside in something like the 3x Bear Financial ETF (FAZ) using long term puts (where your risk is equal to the premium).

Quick Check Around the World

Asian trading closed with the Hang Seng 1.84%, India -0.28%, Shanghai 0.09%, Nikkei -0.01%, and Taiwan 1.62%.

Across the pond, we see the FTSE +0.37%, CAC -0.03%, DAX -0.36%

As of 8.20 AM EST, S&P Futures are trading -6.25 to 973.75 and Nasdaq futures are -8.00 to 1591.50.

A Look at Commodities

Over in commodities, crude oil is trading -0.46 to 67.92 while gold is -1.400 at 952.10 this morning. Silver is -0.100 to 13.98 and copper +2.150to 256.20.

The dollar index is +0.0150 to 78.7700.

On the Radar


09:00 Consumer Confidence 48.7 cons.
09:00 S&P/Case Shiller Home Price Index -17.80%

Click here for the full trading radar.

Good luck! Have a great day!
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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