Today is a weird day, no question about it. Ken Lay dies, North Korea is center stage, Texas tea is back above $75, the post from this morning was muted out by the ADP report and I was hoping to watch the World Cup match that starts soon.
It doesn't feel like there is a lot fear being expressed but the VIX is up 10%. Adam Warner doesn't seem too concerned but does not dismiss it completely either.
The market has felt heavy for a while and today does not help. I have been urging caution and advocating a relatively defense posture for a while now, without an extreme cash position. For now most accounts are still 75%-80% invested in equities, keep in mind the market is only down a little so far and may never go down a lot.
The trades on my radar have been on my radar for a while without any action taken yet are to add a food stock with a high yield, add one of the currency ETFs, perhaps the TIP ETF while reducing a little more industrial exposure. If things get really bad I would be comfortable with reducing net equity exposure a lot with a double short fund. We are not there yet. I think another rally like in late April/early May where people seem to forget the concerns that exist would be a catalyst to add the double short fund in a significant way.
Wikinvest Wire
1 comments:
I read this blog and had a thought about a defensive position. If we are looking to play defense against a falling market does the casual link works like this:
rising oil = inflation = rising rates = faltering stock market
If the above holds then I would think a defensive position should be in oil companies with proven reserves.
Post a Comment