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Any old timers who shorted Nasdaq in 2000?

  1. With the tax plan being priced into the market for the umpteenth time, it'll be interesting to see how much farther the parabolic rise is going to last...just waiting for Gartman to announce he's "going long 1 unit," any day now.

    For the old pros who shorted Nasdaq in 2000, any stories to share? How did u maximize your gains? What would u have done differently, in retrospect?

    Looking thru the charts this weekend, Nasdaq had a 80% drawdown starting in March 2000 to October 2002, almost mirroring the parabolic rise on the downside. Guess the cash burn rate of no-profit companies on flimsy business models eventually comes to the forefront in a rising rate environment, like last time.
     
  2. I shorted corresponding to 40% of my capital at the time. If Bitcoin crosses into the 20 thousands and IB have opened up for short positions, I will place a short with maximum 5% of my capital (which incidentally is much more than the 40% short Nasdaq in 2000).

    Never go all in on a short position. Never go all in on any position. That's my advice.
     
  3. how close to the top tick were u?
     
  4. "Don't sell yourself short" <- what does this old saying mean?
     
  5. I wasn't close to the top. I entered gradually on the way down. As I remember it, the majority of the position during late fall 2000.
     
  6. It’s ET man, everybody got the top tick.
     
  7. Heck yeah! I can recall having gone long on top tic a couple of times.
     
  8. I guess you caught the bug early.....get it? :)
     
  9. I guess you caught the bug early.....get it? :)
     
  10. ??
     
  11. Tick...bug..??
     
  12. Kudos :thumbsup:
     
  13. %%
    Thats not really an anti polar bear trend statement, Eu9. But as a practical matter if i did it over again i would glance @ an indicator, not that its the key to ft Knox, but helpful like 50 dma.....

    I know many use discretion , but short systems hardly ever make the money long systems do, even though short systems.... can make money faster[daytraders like 'em].Continue to keep paper charts QQQ went fromm $120 area to under $20, about 80 % JNPR went down also.... LOL [Delayed edit note, QQQ same as QQQQ+it felt like JNPR would never go down+ with 20/20 hindsight i would have done QCOM, Excellera.com LOL...LOL.By the way the red coke can ,with the 3 polar bears on it comes out about OCT or SEPT-strange but true.:caution::strong::cool:
     
  14. lol, is that a fancy metaphor, sea of "red" / "bear" raid / sell in may and go away
     
  15. Not an old pro just an amateur mom and pop retail lived through 2000 and 2008.

    Even for us, those days were like having your own personal money printing machine, all the way to March 2000, then it all came crushing down. No one I know shorted Nasdaq and many of the pros that shorted Nasdaq did it way too early or too late.

    In today's market and especially with bitcoin many say this time it is different. For some of us retails with scar tissues from 2000 and 2008, we know better. We constantly take money off the table in the current bull market, instead of trying to time and short Nasdaq or tech stock or bitcoin. Because we are not smart enough to know when they will crush.
     
  16. Your premise of a "parabolic rise" in NA equity markets has no validity at this point.
     
  17. There is something devilishly delightful about making $ at a time when the bewildered herd is getting wiped out. As a trader everyone will hate you in a bear market. So here's a few tips U asked for:

    * wait for clear evidence the market is weak. step aside for the first down leg & wait for the counter rally - it will typically retrace half to two-thirds of the down leg before rolling over.
    look for weak trend lines at lower angles with volume constricting -. these bear flags will appear over and over and are the fulcrum from where rallies turn into another big free fall - the ideal spot to short - it helps to learn the measured moves since it seems to somewhat reliable with bear flags.

    * expect big rallies in the morning with bigger sell off in the afternoons.

    * if you swing or trend trade hang on until price closes above a previous days high - it is easy to bail to early out a great short that is carving out new lows week after week.

    * be careful when the market flattens out - this is where liquidity will vanish & what kicked my ass., nothing but whipsaws. this is the big lull to wipe out the last of the traders before a new bull market emerges.

    * at some point consider also going long on the rallies - these brief but powerful rallies can tack on 50% gains onto beat up tech stocks.

    * it is said the market takes the stairs up and the elevator down. trading a bear is a lot of fun - just be ready for a furious pace. I recall one day when a bear rally had the QQQ up over 11% on the day. It pays to play both sides as long as you make shorting your primary focus. good luck
     
  18. good stuff, must be seriously awesome trading that kind of market on both sides
     
  19. %%
    Strange but true pineboltz;
    + yahoo Mountain DeW has a green [pine tree green]mountain, on can-cant make this stuff UP LOL:caution::D
     
  20. %%
    Repeating pattern, 80%,160%.......
    Actually i was party right, figuring some stocks could win even in a polar bear market 2000-2001-2002; but JPNR was NOT one of them LOL-LOL. By the way the QQQ [QQQQ same thing] 52 week run up was; i checked it again, about $50 to $120/+[ NOT exact number, but close] . Thats QQQ is closer to Up 150%; + 80% downtrend/polar bear trend.
    Seems like QQQ is an obvious short , in 2ooo MAR + is- in hindsight; but really that was what BigTrends .com book called a ''elephant trunk sell signal'' , on monthly chart And when it did go up some, again after peak in hindsight, from $1oo, QQQ monthly charts, @ the time it looked like the bull run was still healthy =elephant up trend.
    I like shorts, PineB,[when it is main trend] ,actually shorts easier with ETFs, cant squeeze you that way; but shorts tend to make + take profits faster, make profits fine But take profits faster not so fine LOL. I dont think we had ETFs/inverse shorts if i remember right; but could short QQQ .
    I have some polar bear 2000-2001-2002 QQQ charts @30.00/+..... Cool, LOL:cool:
     
  21. JNPR remains to this day the only time I received a margin call from being short into earnings. At the close of April 4,2000 I knew the top was in because the trading dynamics had changed. 2000-2002 were fun times to short but you had to be nimble because the short covering bounces were brutal, especially when the Fed was incorporating surprise rate cuts into the mix.
     
  22. %%
    And it was a smaller bear move, but finding something like TGT to target, not so wild as a wolverine LOL. Good thing about being over 30 years old, comissions are more reasonable, so we dont have to put up with a wolverine, meanest member of bear family; or buy TGT- LOL.:caution::cool:
     
  23. While it's a good idea to plan for the next bear market, it is more difficult to short the market over a long time horizon, e.g. to hold your short for a month or so is quite dangerous for your net-worth. Most of the mutual funds (the biggest players) are long only investors and their mandate require them to be in the market all the time, which can push up market very violently. But there are many short term opportunities to go to short in a bear market.
     

  24. Do you seriously recommend holding a short position "for a month or so" when a market is rising? Is this what you actually do?