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If you google “market timing”, a lot of people will tell you it is useless to time the market.  I can not agree with that kind of statement.  In my opinion, timing is the most important element in trading.  Of course, timing is just another phrase for your technical skills. That is why I think you can short anything that moves if your timing is right.  It is the same for going long. Let me use STEC as an example.

In our almighty hindsight, we know that STEC has been a strong stock recently. Very few stocks can run like that, which is shooting up with no corrections.  There are close to 20k stocks out there and your chance to hit one like that is what?  You could close your eyes and chase it. You might make some money by sheer luck.  Or you could get slaughtered by the recent drop.  Or you could wait for a correction and then buy it.  I prefer the latter strategy.   Of course that is not my favorite.   My favorite is to short it intra day.  The stronger a stock is, the more I like to short it intra day. The first “strategy” is stupidity because it is gambling.  Any betting without a clearly defined edge is gambling.   The second is speculation or betting with an edge, which is “follow the trend”.  The third is also speculation because I am 100% sure that STEC (any stock that has moved up so much) will come down at one point.  So for me, timing the drop in STEC is all it mattes.   Let’s take a look at  its beautiful drop today.    

Click on the image to have a better view

Today’s drop was caused by its secondary offering of 9 million shares.  The public obviously did not like it.  Having said all this, I did not short it.  You must ask why.  After all, I was hell bent to short the living fish out of it a few days ago.  I do not know why it is “fish”.  Perhaps it is healthier than meat?  Anyway, the reason is that I was afraid of being whipsawed since my numerous past attempts to short STEC did not result in any tangible profits.   If I had tired to short it today, I could have been more likely to catch a good move (2-4%) since there were 3 big moves today.   I caught some small fish today though, which somewhat alleviated my pain of not catching STEC.