Well, slip me into a pink taffeta dress and call me Peaches. The market is collapsing, and I’m not NEARLY short enough. Not even close.
Let’s back up a bit. I’ve been feeling rather jerked around by the market this week. So much so that I trimmed the sails quite a bit. Among the four accounts I trade, the allocation levels I’m at are 40%, 56%, 60%, and 65% allocated to live positions. In other words, I’m at about 50% cash.
That was a comforting thought to me when the Prezident lumbered out to the podium and stated that there would be a 10% “baseline” to tariffs, which sent markets around the world exploding higher. After a little while, though, he clumsily pulled out a big poster board like those a kid would use for a science project and which displayed the much, much higher than 10% tariffs, and the markets absolutely vomited all over themselves. My adoration of that 50% cash vanished INSTANTLY. Jesus H. Christ, man!
It’s much more severe with the /NQ, which as of this moment is down almost 5%. I mean, yeah, I’ve got 16 bearish positions and 0 bullish ones, so cry me a river, but come on, folks, let’s ‘fess up, bear moves are RARE and I want to make the most of them! Gawd!!
The above two charts are minute bars, just to show the absolute head-fake that happened. The /RTY, below, is a daily chart, and you can see it continues to be in a free-fall following its picture-perfect head and shoulders top.
One KIND of good thing I did was short the EFA (which I’ve mentioned on my tasty show), and that is getting torched. In that account, it’s my only position, but with 40% cash on the sidelines, I’m still grumbling. Tempting as it might be to augment these trades, no thank you, I’m not going to chase this market lower. As the saying goes, cash is a position, too. Just sometimes it’s not a great one.
While all this is going on, of course, the /VX is ripping sky-high, moving from about 19 to nearly 24 in a matter of minutes. I’ve been trading for almost 40 years, and seriously, this afternoon is one of the craziest things I’ve ever seen.
Thursday morning is going to be AWFULLY interesting. I would hasten to remind you that Friday morning, the jobs report comes out, and that will also be quite a market-mover. Anyway, thank you for letting me weep, bitch, and moan a bit. If I had an ounce of sense, I’d be grateful that we’re not +90 on the /ES like before, but you know me well enough to know that I’m never, ever happy. Sniff.
