by Jeff Clark
Casey Research
In early February, I noted to my readers that the S&P 500 just experienced “four straight days of ‘rip your face off’ rallies” – a move of at least 1% higher each day.
This, of course, was happening as the coronavirus pandemic was raging in China, and was just starting to appear in the U.S. I wrote at the time:
Stocks seem to be moving higher just about every day. Investors, ignoring overbought conditions and multiple warning signs, are chasing stocks higher. They’re more afraid of missing out on gains than of suffering through a decline. And, the financial television talking heads are bathing in smugness, once again.
So, I figured it was time to take a contrarian stance. At that time, traders were not rushing to sell out of long positions, or to add exposure to the short side. So, the way I decided to do it was to short the tech sector using the Invesco QQQ Trust (QQQ) – an exchange-traded fund (ETF) that tracks a basket of tech stocks.