In 2013 alone we are up 135.25 points or about 10%. Q2 is over and its a new quarter. The question everyone is asking themselves is whether the run up can continue or is the market getting tired and ready for a nice corrective and consolidation move?
I honestly don't know how you can commit any new capital to the longside at all time highs. Will the seasonal sell in May go away provide the needed environment to bring this market in? Only time will tell, in the meantime I will continue to remain negative delta.
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Closed right up near the all time highs again today. This market has been very impressive. I understand that interest rates are effectively zero and investors are clinging for anything with yield. But at this point the risk/reward from my perspective just does not make sense. I feel like buying at these levels is risking 4 to make 1. Or put another way, maybe there is another 5% of upside with a 20% downside.
ReplyDeleteBut that is just my opinion. Even I have to be cognizant of the fact that the market can continue higher. That is why I spread off my upside risk.
I exited the ZB short trade 18 months ago at the largest loss I've ever experienced and things have only gotten worse since then. I learned long ago that the market doesn't care what I think, but I still think you have to play the odds. So I'm in the same boat and have just yet to spread off my risk.
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