I would call a short on the Semiconductor Index ($SMH) or any semi stock this year "The Impossible Short". These stocks have been on a one way highway ripping up all year long. I have tried to short them a few times this year with limited sucess. It has been the toughest trade of 2016 no doubt. I do believe that will change in 2017. Likely in January 2017, there will be significant profit taking. I hope to take advantage of that on the short side by buying $SOXS (3X Bear Semi ETF).



For safe investors who want a high percentage trade, I have one for you. Notice on the stock chart below that the semi ETF $SMH has been in a tight channel since July 2016. If you want a near perfect stock trade, wait for the semi's to break below the lower channel trend line before pulling the trigger on a short. Once that trend line breaks, the flood gates will open and the sellers will hit it hard. Quickly, the downside target of $60 will be achieved. By waiting for the lower channel trend line to break, investors can be as close to 100% sure as possible, a break down is happening. Anything prior can be an educated guess but that is all.