When I wrote this post back on January 10th, I did so tongue-in-cheek, but it seems that the pattern has indeed played out as feared. We are only about 1% away from the target as I'm typing this.
Slope of Hope Blog Posts
Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.
Tribulation over Summation
Probably the most troubling chart I've seen recently in the NYSE summation index. Over the past several weeks, what one would have expected would have been a cycle down in equities (take note of past instances, marked with arrows). Instead, the market has flipped the bird to all bears and pushed to levels not seen for years.
Now that the down-cycle is nearing completion and about to swoop higher, I wonder if this will only serve to supercharge the market further. Over the past year, the NYSE summation index has only been our friend a couple of times but has helped out the bulls almost without fail. I guess a few tens of trillions of dollars in new liquidity can have magical powers over what were once comprehensible markets.
Giving Up the Ghost
Back to the Hybrid Model
Well, this morning was the final straw for me. Everything was looking ship-shape for a nice tumble today, and then ol' Ben came out and said whatever he needed to say to crash the dollar and goose equities again. The GDX, shown below on a minute bar chart, nicely expresses how a very clean breakdown was turned around 180 degrees.
I have gone long sixteen carefully-chosen equities. I am still keeping a big chunk of my portfolio in cash (a little over 50% right now), and I've got a 30/70 split between long/short. So, effectively, I'm only 20% short the market.
In any case, I cannot depend on the market going down in order to turn any sort of profit, so I've got a hybrid portfolio again. The cleanness of the NASDAQ breakout is simply too evident in order to not have a single long position.
