For Those that Literally Want a Short to go for Broke, I present one AGAIN, JEF

I have made mention of Jefferies many times recently comparing them with the next MF Global. JEF stock is under attack and no matter how many explanations they give about their exposure or reduced exposure to European debt, the market is either not buying it or has set a bear raid upon JEF. While Lehman was in bad financial shape, it wasn't fundamentally in bankrupt shape until the market decided to go after them and at that point it didn't matter what they did, the market had spoken and Lehaman was going down.

I have recently compared the environment now to that of the beginning of the end in 2008, MFG being the Bear Streans of 2011 (of sorts) and JEF being the Lehamn of 2011 (of sorts).

For those of you who can take the volatility, JEF may be the go for broke trade as things are quickly unwinding over there.

A 62% loss since the new year with 50% of that coming since July 15th shows events are moving much faster now and perhaps out of JEF's ability to control them (damage control).

 Here JEF was able to do some short term damage control, but it quickly failed as distribution of the highs shows the market is out to take JEF down. There's a chance for a bounce and that is what I would want to see to lessen risk in entering a short here.

 Intraday, JEF has made some gains today in to the green, once again they are being sold.

Looking from a longer term perspective, my crossover screen has JEF as a short, many times it has bounced to the blue 22 day moving average which is around $12 right now, that is where I would prefer to enter JEF, although they also could be entered on a phased in basis of maybe 25% at a time until the full 100% position size is filled out, just in case they don't make it to the 22 day average.

THIS IS NOT A TECHNICAL TRADE, THIS IS A CRISIS OF CONFIDENCE TRADE AND IT IS WHAT MARKS THE CURRENT ENVIRONMENT AS ENTERING THAT POINT OF NOT RETURN.  Wall Street smells blood and whether JEF deserves it or not fundamentally, I would be very surprised if we go into the first month of the new year with JEF still being a viable company.

A pure equity short like this can profit more then 100%, which would be JEF hitting $0, as profits from a true short are added to your account for immediate use (unlike long position profits which cannot be used until you sell the position), this allows you to pyramid the position and you can absolutely make more then 100% on the trade if you do that.

If you want, at my free site, www.Trade-Guild.net, on the left side about midway down there's a section called, "Resources and Concepts" with a lot of links to articles I have written over the years. Look for "Making more then 100% on a short". If you have trouble finding it, email me and I will send you the link.