I’m continuing to sit out the market.
music selection: “Shattered Dreams” — Johnny Hates Jazz
weigh-in: 215.0 +2.0
Volatility and fear continue to rule the markets. The circuit breakers tripped at open again despite (or perhaps because of) the Fed’s emergency action to cut rates to zero. I’m not seeing anything that has an attractive chart on the long side. The short side could see a rapid reversion to mean on good news or even “less bad” news. Therefore, I’m sitting out another week.
I have been preaching for years that if you want to trade for a living you need to have enough passive income to sit on your hands for an extended period of time. If you “reach” you get burned. Right now, I feel strongly that the best trade is NO TRADE.
I continue to have over 90% of my baseline budget covered with passive distributions, dividends, and interest. I also have 14,000 dollars in long dated puts in troubled companies with heavy debt burdens as hedges. Those are really coming in handy right now. This is a matter of personal preference but you might also want to consider owning some physical gold and/or silver. I hold only a small amount of precious metals and do not plan to add to my holdings.
Devour your prey raptors!