Today, the 9th of September 2024, went precisely as I hoped, which is to say the market was up across the board. By lightening up on Friday, I avoided taking as much heat on my shorts, and by waiting for a big bounce, I was able to re-enter more shorts at better prices.
One good example is EFA, against which I owned November puts that I sold at a good profit on Friday. I re-entered this position today by way of January 2024 $82 puts, and ideally prices will not push above the dashed red line I’ve drawn.
In fact, although most folks don’t even follow the EFA, I think it is every bit as important as the SPY or QQQ these days to get a feel as to where the market is going. This wedge is nearly a year in size, and a trip down to the supporting trendline seems in order.
Since EFA covers global equities (sans North America), weakness in Brazil would be of aid to this cause. We can see here the Brazil fund nicely poised, by way of a price gap, to make its own move lower. Much of this, of course, is at the mercy of a very U.S. event, which is the CPI pre-market on Wednesday and the FOMC theatre a week later.
Tech stocks bounced today as well, undoing a portion of Friday’s big sell-off. I’ve tinted my best guess as the short-term reversal and, by virtue of the rounded top, the level of resistance.
A similar pattern can be seen on the S&P 500 ETF.
My triumvirate of “bearish equities/bullish bonds/bullish gold” is still holding up nicely. For bonds, the strength from the bullish base continues to hum along, and this may be in full breakout mode in the coming days, as the Fed begins what I believe will be a long series of (ultimately pointless) rate cuts.
Lastly, energy companies have been in a relentless free-fall. I have been participating in this indirectly by way of CLF and SLB puts.
