Explaining the hedge trade SPXU and GLD

Posted on May 01, 2010 by in Letters, Uncategorized

Friday we put on a partial hedge as an inept response to the present market.  We'll probably get egg on our face and be proven impatient again.  But here is why.  As you see from the Indu chart here there is a broken short term trend line.  Now, in all likelihood this is the beginning of a sideways pattern and the thing for long term traders is just to sit and grin and bear it.  Always itchy we looked at 12 ETFs tha we follow on a regular basis and found not one buyable at this time and all of them with broken short term trendlines.  The nearest to buying was the IWM, the Russell 2000, and we wouldn't even buy it at this point.  (We should have bought it long ago.)

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