On short selling

Selling borrowed stocks serves as a balance to buying stocks with borrowed money.

Careless leveraging will always cause greater evil than any size of short selling.

Short selling reduces volatility, cuts the bid/ask spread, makes the market more predictable.

Short selling provides healthier, higher quality market.

IPHS update

In a typical bull market, stock like IPHS would gap up significantly on earnings (as it did) and from there it would continue to rise. Not in this non-trending environment, where most earnings’ breakouts don’t see an immediate follow through and correct. 13% of IPHS float has been shorted. Now, the stock being close to its all time high, most shorts are under water. That should have added more fuel to the upside momentum. Unfortunately, market doesn’t always agree with my analysis. This is why stop losses and position sizing were invented.

I have said it many times before, that during bearish markets and during non-trending periods is not a wise idea to buy a stock after it gaps up 20%, disregarding how good the earnings were. In many cases, such big move is partially faded away, giving savvy traders a very low risk opportunity to enter and make a quick profit.