The Simplest Way to “Short” the Market

Welcome to the Rude Awakening for January 11, 2021…

Starting a new trading week, we are at brand-new all time highs once again…

Recording premarket, the S&P and Nasdaq futures were looking to open at a bit of a downturn. The S&P was somewhat flat opening up about 20 points up, and the Nasdaq did open up a bit lower 1.15%.

It is not atypical for investors to take a pause to start off a new week after last week’s record-setting rally.

But, smart traders are keeping a close eye on the overall markets especially when we are at all time highs. It’s unlikely that this slight pullback will be indicative of bigger moves to the downside.

Although, even if we do push to higher all time highs, you generally will see some type of retracement before that happens.

With that said, we have several items worth watching today…

Entry Points for 2 New Buys

First up, we have Albertsons Companies, Inc. (ACI) reporting earnings before market open tomorrow, January 12. We are seeing a 7.5% implied move in the options right now, which is more than what we typically see (a 5.6% historical move).

We are looking for a nice entry point here if we can get it — just below the $16 level. ACI opened up this morning at $16.82 and is down to $16.23 as I write.

Another we have been talking about recently is Micron Technology, Inc. (MU).

After MU reported earnings, we saw a big move to the downside, from $84 a share down to about $77. If we could see MU at the $69 level, this could be a great entry point on this stock.

And lastly, because I have been getting a lot of questions from followers who believe this market is overextended, I want to talk more with you about positioning yourself to make money once the market starts going down.

Some of you want to make money on bearish plays, but you don’t want to use options contracts to do it, nor do you want to short stocks.

There are other ways!

If you are looking to buy into a security, in order to make money when the market comes down again…

The Simplest Way to “Short” the Market

One way to do it is by buying…

ProShares Short S&P500 (SH)

SH is a security that is a short fund. It is basically the inverse of the S&P 500.

Watch today’s video for a full explanation of how SH works and how you can buy into it to profit on the market’s downside moves.

That’s it for today!

Have a great, safe trading day.

We’ll talk more tomorrow.


Scott Stewart

Scott Stewart
Editor, Rude Awakening

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