When the market goes up steadily for 12 months in a row with only one small hiccup (February), I knew that the next move would be sudden as I’ve mentioned in past articles.
Not sure what happens tomorrow but interesting points to take away from today:
1. As the Euro currency and region gets pounded, the dollar and Yen are rising as safe havens. Both will have their day in the dark, but for now, they’re considered safe. As an aside, I was short the Yen for a few makes but took profits once I got the first clue that the Yen would rise on weak market days. Since my overall view was that a correction was imminent, I didn’t want to be in the Yen. I’m sure this trade will come up later.
2. Interestingly, gold has been rising the past few days as the dollar has been rising. In the bull market up til 2007, and in correction of 08/09, we had stocks up, gold up, stocks down gold down. Now it appears gold may be going its own way. That has yet to be proven though. I do think massive buying by Europeans is adding to demand.
Let’ s see what happens. I have noticed that shorting the retail sector has been a good hedge to a diversified portfolio since the retail sector has risen much higher than the market indices this year.
note: just watched the market (DJIA) fall over 1,000 points then pop back up. Apparently an erroneous trade entry caused a blip in trading which scared the poop out of a lot of people. It was an interesting day.
disclosure: Currently long XRT puts