This afternoon on CNBC’s Fast Money Halftime Report, Dennis Gartman (producer of the respected The Gartman Letter and former futures analyst for A.G. & Becker) and I seemed to dissent about how to play GS.  We didn’t.  Let’s discuss.

About a week ago, I advocated shorting GS at 150 with a stop at 151.17 and a target of 140. For anyone who followed this trade, it worked out very well – GS trended down to just below 140 intraday yesterday and I closed my position (as it reversed and closed above 140). As a short term trader, I love trades like this with a risk to reward ratio of 10 to 1.

On the show today, I talked about this trade and said that I would look to short GS again if it re-tests 150 (assuming SPY is under 95.50) or holds below 140 (assuming SPY is under 90). Dennis curtly remarked that he wouldn’t short GS and instead advocated shorting something like BRK-B, a stock that has already been going down. In a joking tone, I mentioned that I wouldn’t bet against Warren Buffet.  It made for good television.

The reason for which I appeared to disagree with Dennis is as follows: I am a short term technical trader, Dennis is not. The reason for which I get long or short a stock is based mainly on technical analysis, and the price action of a stock, and not overwhelmingly fundamental analysis. Dennis believes that fundamentally, GS is strong and I do not disagree with this. However, I see significant resistance at 150 and some support at 140. A break of the 140 support level and favorable market conditions (SPY below 90) would offer another good risk to reward short. I will continue to monitor GS and if it offers a good set up, then I will short it once again.

I am a trader not an investor.  I am a short term trader not a long term fundamental trader.  I offer trades that offer an excellent risk/reward- with a win rate of 60plus percent, a downside of 1 and an upside of 5.  There are many ways to make money as a trader.  This is my system.

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JToma