Hey traders,
Yesterday I did something I almost never do in a bullish market: I shorted a stock.
I can’t even remember the last time I put on a straight short — maybe back in 2022, which was a banner year for downside trades.
My Normal Rulebook
As you know if you’ve been following me for even a short time, normally, my approach is market-driven.
That means I read the big three indexes — SPY, DIA, QQQ — using my three Trend Points (20-day short term, 50-day intermediate term, 200-day long term).
- If all three indexes are above all three Trend Points, the market’s bullish and I stick to bullish strategies.
- If they’re between the Trend Points, I can go long or short depending on the stock.
- If they’re below all three, I focus on downside income trades like bear call spreads.
Right now the market is still bullish by that rulebook.
So Why Short Anyway?
Every now and then you get a one-off: a stock that’s run too far, too fast on no earnings.
When I’m shorting, I’ll glance at the fundamentals: no profits, no price/earnings ratio, and a hot story that’s way ahead of reality.
The stock I shorted, Rigetti Computing (RGTI), checks those boxes.
It’s also a high-beta name (around 1.6), which means it swings more than the broad market — great for options, but risky if you’re late to the party.
And the chart? Parabolic. Just look at it:
Angles like that don’t tend to sustain, especially when the business has no real revenue.
A Quick History Lesson
Back in 2022, the first stocks to get crushed were the higher-priced names with zero earnings — no price-to-earnings (P/E) ratio, because there’s no earnings.
That’s the pattern I’ve got in the back of my mind with this short.
Hype vs. Reality
People say there’s an AI bubble. I don’t buy that across the board.
But I do see pockets of bubble behavior — AI “energy” plays and especially quantum computing stories that are mostly hype.
If someone truly cracks quantum computer at scale, it’ll likely be a major name like IBM or Google, not a tiny shop with no earnings and no commercial traction.
The Trade
I shorted the stock at $57.04. It flushed to about $50.50, and as I’m talking now it’s around $52.23.
Earnings land November 11th, so the clock is ticking. I’m not telling anyone to copy me — I’ve got four decades of scar tissue and a high risk tolerance.
I’m just showing you how I think on this particular trade, which is far from what I normally do.
Managing It (And Letting the Audience Vote)
On my daily Market Masters show (11:30 a.m. ET), I asked the audience: cover, short more, or let it ride?
Most voted let it ride, so that’s what I’m doing — for now.
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What Would Make Me Change Course
- A sharp reclaim of the parabolic breakdown with real volume.
- A surprise earnings print or guidance that changes the story.
- Broader market weakness turning into strength for this pocket of “story stocks.”
Until then, I’ll respect my risk, keep it sized right, and let price action tell me when I’m wrong.
Trade well,
Jack Carter
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