Well, after last weeks abject failure of EP 7.0, I would not expect too many of you to give my current thoughts much credence. I wouldn't blame you, as I am quite perplexed at the moment myself. I simply have a very hard time comprehending why the leaders of the free world are seemingly just sitting on their collective hands as Rome burns.
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Perfectly Split
I think at this point one of two things will happen next:
(a) we will crash based on some major event, swiftly taking us to 1050 (which, ironically, will really irk me, since I won't be in a position to take advantage); or
(b) we will get a lift up to somewhere around 1170 or 1175 on the ES, and then continue an orderly plunge from there.
I am positioned the best for situation (b). I have a precise 50/50 split in my portfolio – a 38% commitment (62% cash) with exactly 25 long and 25 short positions.
If (a) happens, well, I'll lose on all my longs and will basically make nothing with the exception of any excess drops on my shorts. So it'll be a wash (and a disappointing one!), little better than being wholly flat.
If (b) happens, I'll sell my longs at a nice profit once we finish the push higher, then I'll augment my existing shorts with new positions and go 100% bearish again. And you won't see anything about a 38% commitment, either.
So at this point, I'm market-neutral, although I'm banking on a rise first and then a drop later in the week.
