Should you be long the Dow? Yes. No. should you be hedged now? Yes. No. Maybe. Have you noticed it’s October?

091002induThis is written during market hours, so it may be completely cockeyed by the close.  But we hedged our long Q and DIA positions.

Why is it we get jumpy in October?  Is it all those fond memories of 1987 etc?  (Actually we made a killing in 1987 in the market — unfortunately the market made a killing too — it killed the company we were running.)

A 2% powerbar down in the Dow always gets our attention.  In fact if you remember we have tried to short this rally a couple of times on those powerbars.

But the pattern is inescapable.  It is a valid uptrend and will be until at least one, and maybe two Basing Points are taken out.

Now look at the wave pattern the last two months.  Surge up, drift sideways and powerbar down, surge up, drift sideways, powerbar down.

Dump and run.

This hedge may last only over the weekend — but remember.  Monday is when they panic after sitting around over the weekend saying, is this it?  Is this it?  It’s almost Halloween maybe we should get a jump on it.

And also, the guys a Goldman are sitting around wondering where they are going to make their next billion.  Maybe short?

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