What I’m Looking For

For the record, I prefer to be a bull to a bear. My stock screener for companies trading above their 52-week high search normally gives me anywhere from 30 to 60 companies. Sorting through I can look for the ones I like. This week I have seen the number of stocks returned in the screener get smaller and smaller. Until today when it reached 4.

One of them is an IPO that started selling today. This is not as meaningful to have a 52 week high on your first day of trading!). I also went back and found that all of the stocks I’ve marked over the past 4 weeks are all down off of their highs. And down substantially for the week.

Bear In a China Shop?

In this scenario, I become a bear in a china shop. Normally when I’ve made these lists I’m looking for the two or three companies that have hit highs and keep trending higher. Alongside the few that keep trending up are many that fall right down after passing that high. My contributions to this week’s Friday Pick’em is two of the four companies from my screener with the expectation that they will be pulling back from their current highs. With that in mind, I’m suggesting two ETF’s if you are into the bear mentality and want to position yourself against the S&P500.

The two ETF funds that I watch and utilize when I want to bet against the market are SPXU and SPXS. They are run by different companies but they both essentially work the same. They go up when the S&P500 goes down. I honestly don’t know the exact mechanism they are using to short the market but whatever they do it works. S&P500 goes up, these ETF’s go down. With everything volatile at the moment and finding so few companies on my list, I’ve moved my positions into the bear funds.

Happy trading, and if the market isn’t going your way remember to ask it nicely to stop!