Wheeeee, what a ride!
This is why we use hedges – they kept us from stopping out of our long positions during the dip and, since our long positions pay off in a flat or up market, anything not down is VERY profitable for our Long-Term positions, which outnumber our bearish Short-Term hedges by 10:1 in our Income Portfolio and Long-Term Portfolio.
Markets do, indeed go up AND down on a pretty regular basis and we've made a lot of bottom calls this week, adding more long positions as we got a nice pullback. Now we have the bounces we predicted and we'll just have to wait and see if our strong bounce lines hold up for the week. Yesterday morning, before the Market, our 5% Rule™ predicted we'd see:
- Dow 17,100 (weak) and 17,150 (strong) – Now 17,210
- S&P 1,990 (weak) and 1,995 (strong) – Now 1,998
- Nasdaq 4,525 (weak) and 4,550 (strong) – Now 4,555
- NYSE 10,875 (weak) and 10,950 (strong) – Now 10,885
- Russell 1,125 (weak) and 1,135 (strong) – Now 1,128
So we have 3 greens and two in-betweens and that's certainly enough to get us to stop being bearish but not quite enough to turn us bullish yet. If we are holding the Strong Bounce lines on the Dow, S&P and Nasdaq, however, we could go long on the Russell, with the /TF Futures…