Short and damn proud of it

I won't lie, I have been seeing my ass trying to short this market.

Having said that it looks like I am in a short on the JSE Top40 (J200) which might have some legs.

I bailed on my AngloGold long position this morning as my stop of R320 was broken and so far it looks like the right decision with ANG looking to re-test the R300 mark.

I'm reading an excellent piece in The Privateer, which I'll post a piece from once I've absorbed it all but maybe if I can throw out some motivation for being short on the Top40 in the short-term.

A) Since the third of March 2009, J200 has rallied from 16400 to 23350 - the rate of appreciation was unsustainable

B) The South African Rand has strengthened heavily in the last few weeks as the US Dollar has weakened. If the appreciation is sustained or continues further then invariably you are going to have some earnings downgrades on the resource counters as the brokers adjust their forecasts.

C) The biggest short-term driver - there is a mountain of paper about to be issued by the likes of RBS in the coming weeks. There has to be questions asked about whether or not the market can adjust for this influx

D) The signs of economic powerhouses adopting protectionist policies are on the up and the decision by Obama to up the tariffs on the tyres imported from China is setting the wrong tone. Unemployment is rising, money in pocket decreasing ... and now you want the consumers to fork out higher prices for the imported goods? Protectionist policies will hurt export based economies hard.

E) Hows this for an interesting stat - for the month of August 2009 there are US$31 of insider stock sales for every US$1 of buys - can you say NO CONFIDENCE?

I am certainly not one of those Uber-Bears predicting the end of the world as we know it, but from every vantage point it would appear things have run too far, too fast. There might be a bit of window-dressing at the end of the September quarter but the enthusiasm to make a real assault on the Dow 10000 mark doesn't seem to be there.

We live in interesting times!