The last few days there have been signs that the bears are on the prowl. Wednesday in the last hour of trading (which is when the bears come out to play) the Dow dropped like it had stepped into an elevator shaft. Today a promising rally (as we write this at 11am San Francisco time) was turned into another bear raid. As readers will readily recall we have expecting the flush for a week or so.
Here is the daily pattern in the SPY, as is obvious a downtrend.
About three thousand times we have said that attempting to trade these minor waves is a fool’s errand. So to prove it we are putting on a minor hedge so that we can lose money on both sides.
More sensible readers can lead a more relaxed life by not doing anything until this turns out to be a trend changing wave, which at present doesn’t appear likely.
Remember, do as we say, not as we do.