Educational and Training Services Are An Excellent Short Opportunity

by: Richard Gorton posted on: July 20, 2008 | about stocks: EDU    

Now that the Fannie Mae (FNM) and Freddie Mac (FRE) rally is ending as stock options expire on Friday, and the glowing reports are being posted, it's time to go short the leading component, that is the Education and Training Services of the consumer discretionary, XLY, sector as seen in this comparative chart of EDU and XLY.

Motley Fool Kristin Graham hypes up New Oriental, (EDU), so now it's a terrific and opportune time to go short this stock.

It's like I recommended yesterday in my article, Yen Carry Traders Sell Oil And Buy Bank Stocks, one should now short the Education Providers Google Finance comparative chart of EDU, GPX, COCO, ESI . The chart of EDU shows a bearish dragonfly candlestick that crys out sell me.

It's all part of "sell the sizzle".

My investment maxim is simple: in a bull market be a bull; in a bear market be a bear. In a bull market, one buys on dips; in a bear market, one sells into strength.

Research indicates that the stock market has transitioned from bull to bear; so one should be selling pops like this one seen in education providers.

Yes, now is a great time to go short, as the chart of overall stock market, VTI, is manifesting a lollipop hanging man candlestick pop of 62.91 at strong resistance of 63; it's chart shows the pop at the edge of a terrifically bearish downward channel.

Having said all of that, I really recommend investing in gold, as interest rate inflation, producer price inflation, and consumer product price inflation is on the way and that is a gold thriller, and a stock and bond killer. Gold (GLD) is currently trading unchanged, at 94.40; it's in a bull market run with chart objective of 100, so it's a buy.

Another reason for investing in gold is that the USD/JPY Making Rounding Top, this suggests a fall lower; and in as much as gold trades inversely of the US Dollar, $USD, Gold, $Gold, will be going higher.

This article has 4 comments! Add yours below...

Richard Gorton

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This article has 4 comments:

  •  
    calvino
    Jul 22 01:35 AM
    Good stuff Richard.
  •  
    doodler
    Jul 22 12:22 PM
    What is a dragonfly candlestick?
  •  
    Knowsbetter
    Jul 22 03:50 PM
    To limit your thinking to this philosophy is to completely miss the counter-cyclical behavior of education stocks as it relates to the economy and unemployment. Education is the antidote to rising unemployment and a shift in the economy (from manufacturing to service) and historically, education stocks have flourished in a down economy and periods of increased layoffs and rising unemployment.
  •  
    phinsuntanni
    ng
    Aug 01 05:06 PM
    My Website
    Knowsbetter, you are the man, buy APOL
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