The big selloff today following
a decent rally on Wednesday’s showed that action was just an oversold bounce
and the short term trend is down. Should this pullback follow the pattern of
the three corrections we have had this year (late January-February, April and late
July-August), it probably won’t stop until the S&P 500 gets to its 100-day
moving average which is currently at 1954.
We could get an
intraday bounce Friday, but today’s steep decline in the morning caught many
investors by surprise. It will probably keep many buyers on the sideline until
there is a clear signal of a bottom.
I have not been active
in the Alpha One Model as indicted in my previous posting. No sense chasing
ghosts into the quarter’s end. However,
that is not to be read as though I have been on the sidelines playing golf or
reading good books, to the contrary I have been trading both Put’s and Call’s
on the SPY each day to hedge the year-to-date portfolio gains.
Last evening after the
Close the short term market models were all in a Sell mode while the
recommended Asset Allocation level had decreased to 25% Long – 75% Cash. Caution is the word of the day.
No comments:
Post a Comment