Ugh, sorry folks. If you have been following along this year, you can count the number of days that have been really unpleasant on one hand. However, today was one of those days. Every adjustment yesterday was proven wrong. But let's back up to those other times.
1/4-5 positioned long USA stocks expecting open above all pivots in 2016 on all main indexes to get massive slam on gap. Didn't take 12/31/2015 seriously enough on IWM for hedge.
Result - cut USA stock longs 1/4-7, shorted SPY under YP, shifted into TLT both 1/6. Short term unpleasantness, longer term success.
Late February after already having started longs 2/12-16 on DIA, oil and emerging markets EEM, RSX, EWZ, played bounce with DIA and SPY above FebP; the next day looked close to rejection so went back to mostly bearish; shuffled again to bullish the next day. Frustrating but shifting was correct. Again short term frustration, longer term success.
This week: Added some defensive trades 4/1, TLT long above all pivots and EWJ short below all pivots, then this week small EWG short. I suggested XLF as additional short for the bears. 4/5 said cut EEM long 4/5 and oil runners, then 4/6 back in long again. On 4/6 XLF looked like hold of AprP so said cut short, also cut EWG short based on jump from AprP. Everything looked bullish, volume healthy enough and no reason to nix, and a variety of VIX vehicles confirmed rally.
Today, the bullish adjustments have been proven wrong. Have to say today one of the most frustrating days of the year but reminding myself of the other times this has happened and making decisions based on pivots. "Go with the flow and think about r/r."
First things to cut - whatever setup is no longer valid. So, EEM long has to go. I don't know about you but reverse short tough thing to do on a down portfolio day with index -2% and now almost between AprP resistance and Q2P possible support. So just cut the long. I still want to hold DIA market leader and SOXX positions long, as long as SOXX holds AprP. But if that breaks, will just take the gains on SOXX. Oil and XLE are holding by a thread, so hold we must. EWG / EWJ extremely frustrating today, as USDJPY blamed for the drop and EWJ somehow is -.5% and EWG cut yesterday is down -2.2%. I guess combo of DAX and EWG would have been better idea, because that would have stayed in the short trade. Then GLD/GDX, reduced last week based on rejection from YR1 level today jumping above. ARGH!
GLD is just on its AprP but not above, so tougher to re-enter long on that, at least today. GDX maybe as above its YR1 and its AprP and no other resistance in the way. EWG very tough to re-short but below all pivots. Usual daily chart really not ideal set-up, keep 1 unit small for now.
Again sharing larger thought process for the time being even though this page is 'SPY daily." At some point it may revert to that, ie comments on SPY only and strategy is up to you or other clients.
Out of 20 units, each unit representing 5% of portfolio, ability to go to 25 or 125% on margin:
8 DIA longs 2/12 to 3/11 entries, still very healthy gains
2 SOXX entry 3/1, some gains
2 TLT entry 4/1 some gains
2 GLD/GDX late January entry great gains
2 EWJ short entry 4/1 short small gains
2 Oil / XLE long entry 4/6 hanging on
1 EEM long entry 4/6 cut today for loss
1 GDX long today added back = 19 units
1 EWG short today added back = 20 units
2 PIN short new position today below all pivots, valid below Q2P, daily MA & BB chart less concern than EWG = 22 units
Current total = 12 longs, 10 shorts / safe havens, 110% portfolio exposure
If oil/XLE any lower that will be cut.
If XLF any lower it will break Q2P and be below all pivots probably best USA short, although already below daily BB not ideal setup.
If IWM breaks AprP and VIX remains above AprP then looks good for hedging USA position.
TLT remains the strongest trend in the market and already jumping above AprR1 and looks on its way to test the high. Apr1 was easy to buy, much tougher up here outside the upper daily BB and hourly chart overbought (OB).
VIX vehicles (VIX VXN VXD VRX VXEEM) jumped above AprPs today which is bearish, even though SPY QQQ DIA IWM and even NYA all holding their AprPs. ACWI broke though, so that means more bearish for global markets ex-USA. Together the AprPs across the board (USA mains and VIX vehicles) are the levels to watch from here. If you want to shift more defensive, then take gains on some longs and rotate more into safe havens or shorts.