Selling Stocks Short; December 12, 2007

Selling Stocks Short; December 12, 2007

I'm a student of contrary thinking. One of the best indicators in my arsenal is what's on magazine covers. If the cover says to do “X”, I look to do “Y”. In fact, the bolder the cover, the stronger my position will be.

Last week, The Economist made a major statement on its cover, this time about the US Dollar. There’s a picture of George Washington with a pilot’s goggles on in a plane that's going down in flames.

Look at the byline above. If you take the cover at face value, you’d be selling the dollar and buying other currencies.

I spend a lot of time writing articles and such. One thing I know for sure is that magazine editors aren’t traders. They are journalists. When something catches their attention, it’s because the prevailing trend or whatever has tongues wagging.

Is it time to sell the dollar?

I think everyone who was thinking about selling or shorting the dollar has done so. This isn’t new stuff. Anyone coming to the party today is a tad late – this trend has been in place for quite some time.

This isn’t an exact science by any means, but the indicator is pretty reliable one.

It’s time to do some homework and see if a trade presents itself. If I'm right, the dollar will bottom and we'll get a decent trading bounce.

With that said, I'm looking to get "long" the greenback in pretty short order. How you play it is up to you. I'll keep you posted.

RAC
The Stock Trading Advisor