It has been a rough road recently for my style of trading. Many of the indicators that I utilize became extreme in November and correctly guided me through the November pullback in the market. In mid-December sentiment became extreme again and has stayed that way.
Since mid December I have been fully hedged and at times leaning slightly short. Luckily, I have been hedging through cheap options and my loss on my hedges is smaller than the loss would have been if I shorted the index. Up until last week my core longs and trades were outperforming the losses on my hedges so I was able to block and tackle my way to positive performance. Last week, both my longs and hedges went against me and took away most of that performance.
While I am not happy with the outcome, every style of trading and investing will have its ups and downs. I don't know many successful investors that change their styles depending on which way the wind is blowing. If I can make it through these types of periods with minimal damage and make hay when the sun is shining for my strategy than I should do well over time. That said, is it over yet?