As I write the S&P 500 futures are sitting over 40 points lower than where they started the week. While buying at these levels is certainly better than where we started the week, I would caution that today is only day three of the decline and is still not a low risk entry point from an intermediate term point of view.
Three days is not even enough to make the market oversold, let alone get rid of months of built up complacency. However, we are getting oversold on an extremely short term basis and are approaching the turn of the month, which has been very strong. Even if the market is not done with this correction there should be bounces along the way. I believe we will see a bounce some time in the next few days coincident with the turn of the month.
While I came into the week fully hedged, I started picking away at the long side yesterday looking for a very short term bounce. I sold some covered calls late in the day once we bounced but we did not get as much of a bounce as I was hoping for so I remain slightly net long. I will look to delicately continue adding to my longs into further carnage, looking to play a bounce next week.