I am Pleased to Announce a New Newsletter Focused Exclusively on Prospective Short-Sales of Individual Stocks and ETFs
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I am pleased to announce a new newsletter focused exclusively on prospective short-sales of individual stocks and ETFs:
Wade’s Short-Sale Watchlist
This is a very unique newsletter as there is a dearth of high-quality, short-focused newsletters and expert strategy information accessible to the public.
I decided to start this new newsletter because while I have many short recommendations and short-sale trades as part of the Wade’s Market Insight’s newsletter service, this new exclusively short-focused newsletter will provide even more high-quality short-sale prospects to watch and monitor. And it will enable readers to pick and choose from the prospective shorts that they find the most compelling based on their own trading experience, portfolio allocations, risk-tolerance and time frames.
Also, not all of my Wade’s Market Insights Newsletter subscribers short individual stocks or ETFs, and I wanted to bifurcate some of the short-selling commentary and analysis.
Shorting is hard, and it’s not for everybody, but it has been a forte of mine for a very long time. I entered the money management business in the Fall of 1992 after graduating from law school. I gradually and steadily started developing a knack for shorting stocks & markets. A lot of success in shorting during the 1997 Asian Financial Crisis (the “Asian Contagion”), led to me running my first hedge fund in 1998, and having a very fruitful first year during big market declines spurred by the Long-Term Capital Management crisis. Are those market events ringing any bells for anyone?
I shut down my Money Management firm a handful of years ago, and I do this because I enjoy the education and mentoring process. At some time, I’ll elaborate more on all of this and what it was like during the tech fund bubble bust (2000-2022) and the credit/housing bubble bust (2008-2009). It was fun.
I am not remotely a permabear, but I will get aggressively short during significant risk-off periods. I trade the trend and the market breadth, be it up or down. But stocks that are breaking down during substantive risk-off periods will often drop quickly and quite sharply, providing opportunity for a lot of alpha (outperformance). As the old stock market adage goes, “Escalator up, elevator down.”
This newsletter will provide very timely prospective short-sales to monitor as the stocks or ETFs are on the cusp of triggering a short entry (per my work).
My short selection process, in a nutshell:
This is a very “short version” of my analysis process. I’ll elaborate further on it in the near future.
My short picks are selected using a combination of technicals, macro & company fundamentals, sector selection and tape reading. For individual stocks, my short picks will usually be focused on underperforming stocks in underperforming sectors, using technical analysis and tape reading to determine the timing of the short entry and exit. A high percentage of my shorts will be stocks that relatively recently had disappointing news or earnings reports/guidance, and are now breaking down through key support levels. Stocks that are “laggards” are laggards for a reason.
I marry all of these factors and variables to constantly narrow down potential additions to the short-sale watchlist, and the timing of when they go on to the watchlist. You will often see a stock or ETF added to the watchlist break down very soon after I post it, often within 1 to 3 trading days — especially in “risk-off” environments.
There are market environments where shorting stocks can be very fruitful, but in healthy/bull market environments it should only be used very selectively. Don’t fight the tape. During risk-off market environments (they come in widely varying degrees), I will sometimes have a fairly large number of stocks/ETFs on the short-sale watchlist. During strong market environments, I will have far fewer stocks/ETFs on the watchlist. The key is to be able to adeptly identify such environments, and to be disciplined to only trade with the trend and the tape.
Stocks and charts on the watchlist come with a concise summary (concise so that I can quickly and efficiently get them sent out in a new newsletter), an entry trigger price, stop-loss, and initial or swing trade price targets. Price targets can always change depending on the market environment. Post any questions you may have in the comments section of the newsletter.
You can read my Wade’s Market Insight’s (WMI) newsletter to get more detail on my current market views, as well subscribe to gain access to my long & short focus watchlists therein, access to my private Twitter (X) feed, and trade alerts via WhatsApp and Twitter.
My first short-sale watchlist will be going out soon. Feel free to post any questions you may have in the comments section below.