All rallies come to an end. Sometime they end dramatically, like we saw today. From July the market was in rally mode with little pullbacks or correction , so a correction is not a bad thing. If you have made money in last 8 months, the trick is to not give up much of your profit.
Now the next game plan is more important. Again the question is what will maximise profit for a given time frame. To short also you need to find right stocks to short. The stocks likely to go down the most are best shorts. Finding them is much difficult task than finding longs. Because things do not work the same way on short side. Anyone who tells you to do reverse of what you do for long for short has no idea of what he or she is talking about.
So if this correction has legs on downside, you will have opportunities to find low risk high probability opportunities. First and fundamental thing is capital protection. For long term traders better opportunities will show up in few days.
Total 4% plus bullish breakouts=24
Total 4% plus bearish breakouts=1404
65 day bullish/bearish ratio= 656/281
Stocks up 50% or more in a month=8
Stocks up 25% or more in a month=65
Number of stocks with 100% plus move =294
Number of stocks up 200% or more = 69
4% plus signals for 100plus universe=2
4% plus signals for 200plus universe=1
Select stocks which had 100% plus move in last 260 days from the low and which are up more than 4% on higher volume. Today's minimum volume is above 100000. To understand how to trade this see my earlier post "How to find a stock which makes 1500% move in a year"
SGN,Signalife Inc (Google Yahoo Earnings Chart)
TATTF,Tat Technol Ltd (Google Yahoo Earnings Chart)
Now in the midst of this carnage Radioshack managed to make a 12% move. What was the catalyst- earnings announcement. In January it had a high volume day after raising earnings guidance , since then it has gone up about 50%.
Keep a close watch on companies announcing earnings acceleration even during this sell off. That will convince you of the power of earnings as a catalyst.