I’ve seen this movie too many times.
The market’s been ripping. Then you spot a stock that looks stretched… maybe even begging for a short.
The indicators line up. The chart looks heavy. The urge kicks in.
But me? I stay the hell away.
Here’s the simple rule I live by:
If SPY, QQQ, and DIA are all above their 20, 50 and 200 day trendlines, I’m not shorting anything.
Not a single stock.
Because I’ve been there. I’ve seen what happens when you try to fight the tape just because something “feels overbought.”
And when the market’s trending up, even garbage stocks can grind higher and burn shorts alive.
Now don’t get me wrong — I’m not flying blind.
I hedge.
I protect my portfolio.
I’ve talked about it before when I explained how I buy protective puts.
What I don’t do is get cute trying to call a top just to say I was right.
Because when the wind’s at your back, you don’t step in front of traffic.
“But Jack, what if the reversal is coming?”
Sure, it might be.
But it’s not here yet.
And I’d rather be a little late than totally wrong.
Stick with the trend. Protect your downside. And stop trying to be the hero who calls the top.
That’s how I’ve stayed in the game since the 80s.
And remember to keep collecting cash while other folks blow up their accounts trying to prove a point.
Trade Well,
Jack Carter
Jack Carter Trading
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