Today confirms what we’ve all suspected: this market is headed for much lower prices. Traditionally, the market is “let go” during the month’s of April through July. I see no reason to believe 2013 will be any different.
Volatility is back and so are treasuries. As you can see, TLT and VXX are heading up again.
My preferred form of short is HDGE, however. I am not looking to make a fortune on my shorts, just stem the flow of blood from leaving my body. I do not feel comfortable initiating short positions into the teeth of a decline–because based on recent history, shorting the market has been a losing endeavor.
So, my position is simple: 55% cash position and another 20% in HDGE to pair alongside my depreciating longs should allow me to remain in control of my destiny, at least for now. I am very eager to make back recent losses, but know the fastest way to accomplish this task is to bide my time and wait for my trade, not acting out of desperation like a dog fetching a scrap of food.
The Devil is net short too, but has a special situation that comprises all of his efforts at the moment. Hopefully this downward tape will allow me to buy some. However, it’s been very stubborn and extremely strong.