Just a heads up:
After selling TLT at 137.62 $ I bought them back yesterday at 118.88, 30% of my port.
The reflation trade seems to be over, so I am glad to hedge again with TLT.
Regards
Andreas
is that a judgement call for you, or do you have a rule you follow?
its a judgement call…
Good luck
Sounds good. I spent the past week unwinding half of my discretionary trades and raising my SDS position.
Any reason why ?
The market is feeling weird to me. If I need an excuse, I’ll point to the failure of the Republicans to pass their own health care reform. It belies a lack of cooperation and common ground within the GOP that may torpedo tax reform and infrastructure spending. I’m leaning towards the Trump rally fizzling out.
EDIT: And the market could use a healthy 6% correction.
Walter and Andreas,
thanks for your comments.
Political developments usually have short lived consequences for the stock market. It is usually shrugged off by market participants after a few days. There are exceptions, as always, but this is the general rule.
I also have some reservations about this market but prefer to look more objective measures like inflation rate, unemployment, TED-spread and a few others.
They do correspond with your opinion (and Andreas’) though. The market is not in super good health and I have reduced my equity position about 33% for cash. Ready to further lighten up if indicators deteriorate.
Werner
I agree 100%. But I think one has to concede that the Trump rally is not based on concrete, measurable data but hopeful expectations and is therefore ephemeral. A 6% correction will take the market back to pre-election day levels.
After the spectacular HC defeat, I expect the GOP will take its time to build support for tax reform and new infrastructure spending. It can’t afford another fail. Once the market realizes that those issues are a year (or more) away from a vote, it’s back to reality - a long in the tooth expansion in a deflationary world economy.
Walter
My Composite Timer moved from stocks to bonds on Mar-20, mainly because the Unemployment Rate is now higher than what it was 3 months ago. Only 2 of the 6 component timers are still in stocks.
http://imarketsignals.com/2016/composite-market-timing-increases-returns-and-reduces-drawdown/
